Republic of Panama - an Overview

Panama is located on the southeastern end of the isthmus or land bridge between North and South America.  Situated between two oceans, Panama was first recognized by Spain in the 1500's as being the epicenter of its empire in the New World.  Gold and silver were brought by ship from South America and taken across this land bridge to ships waiting to set sail for Spain. In 1914, the United States completed the Panama Canal, which stretches 52 miles and connects the Atlantic to the Pacific oceans. 

Panama won its independence in 1903, has a representative democracy with three branches of government and an independent judiciary.  The official and most commonly spoken language is Spanish. English is a common second language spoken by many, including the business and professional communities. Approximately 56% of the population is between the ages of 15-59. The literacy rate in Panama is over 90% and its citizens have the highest GDP per capita in Central America. 

Panama is one of the most developed countries in Central America and boasts one of the most stable economies in the Americas.  It has several bilateral free trade agreements signed with other Latin American countries, as well as Taiwan and Singapore.  It also boasts membership in the WTO (World Trade Organization), the World Bank, the Inter-American Development bank and the IMF (International Monetary Fund).  Panama is also a member of the Organization of American States and was a founding member of the Rio Group.

Panama is unique in its exclusive right to use the US Dollar as its par-value currency.   In addition to a US dollar-based economy, Panama offers no foreign exchange risk as well as an absence of exchange controls.  

Working in Panama

Panama has long provided important incentives for foreign investors including:

• Supportive mining legislation
• Equal treatment of foreign and local citizens
• One of the most flexible company laws in the world
• No restrictions on 100 per cent foreign-owned companies
• No restrictions on mergers, acquisitions or joint ventures
• Excellent tax holidays for specific investments in sectors such as tourism, maritime, real estate, mining
• Strategic location for shipping of materials by water globally with ports on both the East and West coasts

Panama has been ranked first in the region for low cost of living, operational cost and index of labor by the Tripartite Committee, which consists of the Economic Commission for Latin America and the Caribbean (ECLAC), the Organization of American States (OAS) and the Interamerican Development Bank (IDB). Panama has full coverage from OPIC, MIGA, IDB and other multilateral entities. Political Risk Services (PRS) placed Panama in the top three countries of the hemisphere with the best risk-investment qualifications. Moody's and Standard & Poors have both granted high ranking to Panamanian bonds.

Panama has seven indigenous peoples groups.   Of the four groups that live in the Western portion of the country are the Ngöbé, with whom Dominion has a signed agreement on the Cerro Chorcha project. The Cerro Chorcha project is a large concession in the Comarca (area of entitlement to the Ngöbé indigenous people of Panama).

Mining in Panama

Panama is rich in natural resources with copper and gold ranking in the top three.  Located atop the "other copper belt", Panama offers many opportunities for mining exploration and development, particularly in copper and gold.  Although Panama has 80% of its GDP generated from the service sector, Panama's favorable mining laws are designed to encourage more foreign direct investment into this sector in order to tap into the country's potential wealth. Currently mining represents approximately 1% of the total GDP for Panama. The country is also strategically located for ease of shipping anywhere in the world.