Panama is one of the prime locations for setting up companies and businesses in Latin America. A sound political and economic stability, a favorable tax regime and a friendly business climate are some of the reasons this small country is a leading country in the Americas.

The post-pandemic world is facing cataclysmic changes and shifts in global trends. Panama is expected to continue leading the region thanks to its resilient financial sector and extraordinary economic and geographic conditions.

So on, if you are an investor looking to expand to the Americas, Panama must be on the top of your list when it comes to looking for outstanding business opportunities. In this article, in Mundo we will help you to be updated on Panama.

We will give you top financial headlines so you can be updated about the Panamanian economic situation.

Panama Goes Legal: Congress Approves Medical Cannabis Bill

The Panamanian National Assembly approved a bill last August 30th that would regulate the use of medical cannabis. The bill now waits for the signature of President Laurencio Cortizo.

The bill was voted unanimously by 44 lawmakers of the Panamanian Congress, making it the first Central-American country to do so.

The approval of medical cannabis would create extraordinary business opportunities in this small country. For example, the government may grant licenses that would allow Panamanian companies to export sowing-seeds, cannabis plants or derivatives of this product.

Authorized patients will have the right to acquire medical cannabis products through licensed pharmacies across the country, which will be responsible for the distribution of the medical products.

Just a month after the approval of the bill, the first signs of new commercial ties have arisen. The Flora Growth Corp (a.k.a. Flora), a leading all-outdoor cultivator of global cannabis products, announced that it had entered into a non-binding Letter of Intent with a Panamanian company to supply its cannabis derivative products. 

The agreement would allow Flora to expand its operation in Latin America. Their approach balances economic returns and the mitigation of environmental impact, something really important in Latam, one of the most biodiverse regions worldwide.

The regulation of medical use for Cannabis continues to strengthen commercial ties between Panama and the rest of the world. Yet, it is also another sign of the liberal and progressive values of the Panamanian people, keeping them at the forefront of the region and other emergent economies.

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The World Bank Moves its Regional HQ to Panama

The World Bank will move its Central American Headquarter from Washington DC to Panama City, the institution announced last August 9th in a press release.

“With a wider physical presence in Panama, we will strengthen our relationship with Panama, Central America and the Dominican Republic,” said Carlos Felipe Jaramillo, the newly designated World Bank Vicepresident for Latam and the Caribbean, in his first visit to Panama.

The World Bank has a long-standing relationship with Panama. In fact, the WB lended Panama $300 million USD last December, aiming at fostering an inclusive post-pandemic economic recovery.

The new office will have a staff composed by more than 30 experts in sustainable development, economic policies and project management. The staff will handle a portfolio of 49 investment projects that account for almost five billion USD that will foster the development of the Central American region.

The WB portfolio accounts for four projects in Panama that account $460 million aimed at strengthening social protection, supporting the COVID-19 response and inclusion of the indigenous people.

Even though the COVID-19 pandemic caused the Panamanian economy to collapse by 17.9% in 2020, the WB expects that the GDP will expand 9.9 per cent in 2021. 

The inauguration of a regional office in Panama is another sign of the bright future of this small nation, which promises to lead the post-pandemic recovery in Central America.

Panama Wins Best Destination Award

Last October 1st, the Newsweek magazine awarded Panama as the best destination country in the Future of Travel Awards. 

The award was highlighted by Panamanian authorities and many businesses in the tourism sector. The Central American nation beated the other three finalists: Bhutan, Rwanda and Slovenia. Newsweek aims to honor innovative and sustainable approaches for the world tourism industry. 

It is an accolade for the Panamanian tourism sector, one of the main economic activities in the country. In fact, tourism apported 2,6 billion USD in 2014 to Panama’s GDP, more than the Panama Channel (1,9 billion USD) or the Colon Free Trade Zone (1,6 million USD), according to the Tourism Authority.

Recent investigations from the World Bank have concluded that the tourism industry has large multiplicative effects in the Panamanian economy, meaning its benefits can have wide positive effects in other sectors of the economy.

Panamanian authorities know this. That’s why they launched a Master Plan to rebuild the country’s image in order to boost tourism and the number of visitors from overseas. Their goal is to place local communities and the environment as the center of the tourism industry. Panama expects to invest more than 300 million USD in the next year in the plan.

Panamanian Exports Reach Record Highs

Panama exported 1.94 billion USD in the first semester of 2021, a rise of almost 120% compared to the same period of 2020, announced a government agency last September 11th in a press release.

The exports were mostly copper concentrate, which represented 78,5% of the exports and accounted for 1,52 billion USD. Non-mineral exports registered $417.6 million USD, a rise of 7.6% compared to 2020. The main destinations for the Panamanian non-mineral exports were Europe, Asia and the United States. 

The extraordinary bounce of exports is another sign of the thriving economic recovery that Panama is facing. In fact, the World Bank expects that Panama’s GDP will rise 9,9% in 2021.

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