Business in Panama Canal. Investing Set-up Foreign direct investment

Course summary (Doing business in Panama)

Panama City is the country's capital and the principal commercial center. Colon, the country's second largest city, is located on the Caribbean Coast. Its economy is dependent on traffic through the Panama Canal and on business activity in the Colon Free trade Zone, the largest duty-free zone in the Americas.

The Panama Canal is approximately 80 kilometers long between the Atlantic and Pacific Oceans. This waterway was cut through one of narrowest saddles of the isthmus that joins North and South America.
The Canal uses a system of locks -compartments with entrance and exit gates. The locks function as water lifts: they raise ships from sea level (the Pacific or the Atlantic) to the level of Gatun Lake (26 meters above sea level); ships then sail the channel through the Continental Divide. The Canal itself is undergoing a modernization and maintenance program of up to $1 billion. A ship takes an average of 8 to 10 hours to transit the Panama Canal. At the end of fiscal year 2006, 943,042 vessels had used the waterway since its opening on August 15, 1914.

The Colon Free Zone (C.F.Z. Zona Franca de Colón) is the world’s second largest Duty Free Trade Zone. The Colon Free Zone actually, has 450 hectares, divided into two (2) commercial areas: the first one is the commercial area of showrooms in Colon (old city limits) and the other, commercial warehouse and storage area in France Field. There are approximately 2,500 companies established, generating 27,347 permanent employments. Its annual commercial transactions or commercial movements generates $16,160 thousands millions US dollars in imports and re-exports.

Exports of Panama: 821 million USD. Main export products, with salmon/tuna as the largest dollar amount, followed by beef, watermelon, shrimp, and pineapples.

Export partners (as a percentage of total export value in 2009): United States 42%, China (P.R.C.) and Taiwan 5.3%, Costa Rica 7.3%, Sweden 5.4%, Netherlands 6.5%, Spain 6.2%.

Import partners (2009): United states 29%, Costa Rica 5.2%, Mexico 4.5%, China 4.2%, and Japan 3.6%.

Major industries in Panama: Banking, construction, petroleum refining, brewing, tourism, cement and other construction materials, sugar milling, shipping and agriculture.

Panama has bilateral free trade agreements (FTAs) with United States FTA, Chile, El Salvador, Taiwan, Singapore - Panama (PSFTA), Guatemala, Honduras, Nicaragua, and Costa Rica. Panama signed an FTA with Canada in May 2010. Panama is exploring free trade negotiations with Mexico, Colombia, Mercosur, Andean Community, European Union (EU - Central America Association Agreement) and CARICOM.

The United States and Panama signed a Trade Promotion Agreement (TPA) in June 2007. Once implemented, the agreement will promote economic opportunity by eliminating tariffs to trade of goods and services.

International Economic Relations. Panama is member of: Central American integration system (SICA), Association of Caribbean States (ACS), Latin American and Caribbean economic System (SELA), Mesoamerica project, Inter-American Development Bank (IDB), Economic Commission for Latin America (ECLAC), Forum for East Asia-Latin America Cooperation (FEALAC), Organization of American States (OEA), World Bank, Andean Community (Observer), International Monetary Fund, World Trade Organization (WTO), United Nations, ALADI (observer) ...

The population of Panama is approximately 2.8 million, about 52 percent of which is urban. Spanish is the Official language of the country

Business in Panama, Investing, Set-up, Canal, company, foreign, Direct, Investment, Legal, framework, FDI, Master, international business