Working in Panama?
Key Business Areas in Panama
After a general economic overview, let’s look at some of Panama’s key business areas – both in geographic terms and in terms of investment and business opportunities for expats.
Panama’s CFZ and EPZs
In addition to Special Tourism Zones, Panama has several Free Trade and Export Processing Zones, plus the Panama Pacifico Special Economic Area offering tax and migratory incentives.
The Colón Free Zone (CFZ), located near the Atlantic entrance to the Panama Canal, is the second largest duty-free zone in the world after Hong Kong and the largest free trade zone in the Western Hemisphere. It is undoubtedly one of the biggest driving forces of the economy of the entire country, with several thousand companies operating in the zone. Companies in the CFZ are exempt from income taxes.
Export Processing Zones (EPZs) are particularly popular with manufacturers due to tax-free benefits and exemptions from license and custom duties. Outside these zones, tax incentives in the form of Industrial Promotion Certificates are also available to investors in manufacturing, agro-industrial concerns, and marine resource transformation, among others.
The Ciudad del Saber (City of Knowledge), another special zone on former Canal Zone territory, is a center for innovation and knowledge exchange combining business, research and studies. It attracts international companies through income tax exemptions and other benefits. The City of Knowledge website is also an excellent place to look for jobs with companies in the area.
Expat Destination Panama City
Panama City, the capital and largest city of the Republic of Panama, naturally attracts most foreigners moving to Panama. The City of Panama has a population of just under one million, with a metropolitan area population of 1.6 million.
The city is located at the Pacific entrance of the Panama Canal and is thus a hub for commerce, trade and shipping activities, but also for tourism and international banking. The banking sector is fairly stable; some even consider Panama the largest international banking center outside of Switzerland. With most of Panama’s businesses and commercial premises located in the city and its metropolitan area, Panama City generates more than half the country’s GDP.
Panama City is connected to the rest of the world through the Tocumen International Airport, the largest and busiest airport in Central America. The nearest port facilities are in Balboa.
Colón and David
Panama’s second and third largest cities respectively are located in different corners of the country. Colón is a seaport on the Caribbean coast, at the other end of the Panama Canal opposite Panama City. Its borders include the former Canal Zone towns of Cristobal, Rainbow City, Margarita, and Coco Solo. Colón’s main attraction for expats and foreign investors is the Colón Free Zone. The city itself suffers from high unemployment, poverty and crime rates as a result of serious economic and social decline brought about by the military dictatorship between 1968 and 1989.
David, on the western Atlantic coast near the Puerto Rican border, is a relatively affluent city with a population of less than 100,000 in 2011. It is the agricultural supplier for the country and serves as a commercial and financial hub for the province of Chiriquí. Most national banks and some international banks such as HSBC have offices here.
As one of the most industrialized cities in the country, David is also a center of manufacturing and heavy industry. It is served by the Enrique Malek International Airport and attracts significant numbers of tourists thanks to its nightlife and entertainment, an excellent cuisine and good shopping facilities.
Business Opportunities in Panama
The 5.3+ billion USD Canal expansion provides various business opportunities for foreign investors and managers in the area. We have listed a few areas of interest below:
- procurement related to the daily operations of the Canal, such as provisions, equipment, material, construction, consulting, etc.
- concessionaire services to the ports (materials, maintenance, repair, power, water, fuel, food, banking, telecommunications)
- ship owner’s services (ship and container repair and maintenance, servicing of vessels)
- logistics and cargo industries
- security consultants, trainers, providers
- financial consulting
In addition to these opportunities arising in the maritime sector, Panama’s economy has potential in various other sectors, such as:
- information and telecommunication technology
- chemicals and pharmaceuticals
- power and renewable energy
- electricity generation, transmission and distribution
- food and drink
- construction and infrastructure
We do our best to keep this article up to date. However, we cannot guarantee that the information provided is always current or complete.