Panama Remains an Attractive Country for Investors

Panama remains an attractive country for investment, but its competitive advantage faces limits, according to the National Competitiveness Center (CNC).  According to the organization, the country must adapt to a more competitive global environment.  The CNC suggests improving the quality of investment, reducing internal frictions, and strengthening the foundations that allow attracting more foreign investment with a greater productive impact and capable of boosting more local investment. 

It highlights that, despite the complex environment, the reported investment outlook remains favorable.  “In the next 12 months, 39% of companies plan to increase their investment, 50% expect to maintain it, and only 11% estimate reducing it,” the CNC reported.  He added that the planned investment will continue to be based primarily on reinvestment of profits (69%), compared to 31% fresh capital.  According to the Competitiveness Center, investors expect their operations in Panama to consolidate, primarily as a regional headquarters (50%) and logistics hub (28%), as well as an innovation center (11%) and export platform (11%).    

On the other hand, there are advantages that the country maintains and that attract investors such as international connectivity, use of the US dollar, macroeconomic stability, legal security and quality of life.  However, the CNC warns that there are operational obstacles that need to be corrected, such as delays in administrative procedures (33%), high energy costs (17%), corruption (17%), deficiencies in transport infrastructure (17%) and a shortage of specialized talent (17%).  These are in addition to external risks associated with global financial volatility (41%), geopolitical instability (27%) and regulatory changes in partner countries (23%).  Foreign Direct Investment (FDI) in 2024 was $2,454 million or 2.8% of GDP.

One billion dollars in investments was reached in 2018, the highest figure.  74%.  According to the Competitiveness Center, most of the investment in the last decade has been local.