Panama - A Sustainable Investment Hub

This year Panama signed a landmark agreement to accelerate its plan to become one of the planet’s leading sustainable investment destinations. The country’s trade and investment agency, PROPANAMA signed an agreement with Bcorps to promote sustainability in the business and entrepreneurial sector. The deal promotes responsible and sustainable practices and implements social and environmental impact measurement tools for Panamanian companies. Bcorps is working to raise awareness of the role of companies in building prosperous societies by promoting business models with econo­mic, social, and environmental impact.

Competitive advantages

This agreement reinforces all the added value that Panama has to offer the world, including its exceptional geographical location; excellent logistical, digital, and communication connections; a favourable business climate; a growing economy; political stability; and tax incentives. These DNA-defining characteristics, as well as its status as one of the first three carbon negative countries in the world, are making Panama a centre for sustainable investment in key sectors such as logistics, digital technology, agriculture, energy, and tourism. To support this transformation, PROPANAMA organized the first Panama Sustainable lnvestment Forum to present and discuss opportunities in various sectors and highlight the advantages of investing in each of these areas.

Panama's interoceanic centrality makes it one of the most important global trade routes. Its efficient logistics system, including the Canal, ports, airports, and the interoceanic railway, makes the country a world-class logistics hub, with innovations in distribution services and value-added global connectivity activities. Panama has developed 17 private free zones as a new model of multimodal logistics integration. lt is also working to increase local investment and attract new investors with legislation that facilitates the establishment of special economic zones.

Panama hopes to become a world-class logistics hub, with innovations in distribution services and value-added activities as well as global connectivity.

Panama's four-pillared, ten-year Digital Hub strategy aims to position the country as a digital innovation hub led by an executive committee with representatives from the public, private, and academic sectors. The plan will create infrastructure, foster a favourable legal environment, and promote foreign investment with the goal of making Panama a competitive digital innovation centre, boosting economic growth, and promoting entrepreneurship. Dana Al Salem, co-founder of Yahoo Europe and CEO of FanFactory, highlighted the fact that "Panama has many options for investors in the digital sector given its unlimited connections."

Sustainable Panama

And because Panama promotes the use of renewable energy, the country has been able to reduce its dependence on hydro­carbons. More than 85% of its energy matrix comes from renewable sources, including wind, solar, and hydroelectric power. The country is also promoting the production of green hydrogen. Plans for the future include expanding the renewable energy generation parks, creating infrastructure for electric mobility, and establishing clear hydrocarbon policies. Sustainable building regulations are also being implemented to promote energy efficiency measures.

Much of its energy matrix comes from renewable sources, including wind, solar, and hydroelectric power. The country is also promoting the production of green hydrogen.

And then there's Panama's food industry, which exports a wide variety of traditional agricultural products to many countries. New agricultural products that meet export requirements are also being developed, leading to the creation of new agricultural companies. At the same time, Panama's Law 196 establishes a special plan to create agroparks, giving producers access to financing through the National Bank of Panama (BNP) and offering investing companies a 50% reduction in income tax over a period of five years.

And, last but not least, there is the tourism sector. Condé  Nast Traveler magazine chose Panama as one of the 22 best places to visit in 2022, positioning the country as a prime location for retirees, second homes, and investment migration. This position is bolstered by important tax incentives and the country's position as a meeting point for local and international businesses. Among its attractions are its two cruise terminals - one in the Pacific and another in the Caribbean - and its medical, adventure, culinary, and convention tourism (with the region's largest convention centre). And don't forget the Copa Airlines stopover program, which allows in-transit passengers to extend their stay free of charge for up to seven nights.