Panama - Market ChallengesPanama-Market-Challenges
Panama’s inflexible labor laws are a source of concern for prospective investors. Firing practices are excessively regulated, reducing labor mobility and inhibiting hiring. While inexpensive in global terms, Panama's minimum wage is relatively high in a Central American context with annual increases depending on the sector. In addition, competent technical employees fluent in English can be difficult to find. These labor issues, coupled with relatively high costs for electricity, result in higher-than-average unit production costs in Panama.
Instances of questionable government practices have affected U.S. investors in Panama. These include bidding procedures, contract obligations, and a slow and imperfect judicial system. The Cortizo administration has promised to fight corruption, energize the economy, and combat inequality. Panama’s real GDP annual growth in 2018 was 3.6 percent and the IMF estimates overall growth in 2019 will be 4.3 percent – still high for regional standards but much lower than boom years Panama experienced in the early 2000s.
International indexes generally rate Panama as one of the best countries in Latin America for business and investment. At the same time, however, U.S. and other international investors have voiced concerns about corruption and inconsistent treatment, as well as late payments on government contracts. For these reasons, we encourage U.S. companies interested in investing in Panama to read our report on investing in Panama thoroughly and to contact the U.S. Commercial Service in Panama for guidance. We also recommend that U.S. citizens interested in purchasing property in Panama consult with the Embassy’s American Citizens Services section. Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.
Instances of questionable government practices have affected U.S. investors in Panama. These include bidding procedures, contract obligations, and a slow and imperfect judicial system. The Cortizo administration has promised to fight corruption, energize the economy, and combat inequality. Panama’s real GDP annual growth in 2018 was 3.6 percent and the IMF estimates overall growth in 2019 will be 4.3 percent – still high for regional standards but much lower than boom years Panama experienced in the early 2000s.
International indexes generally rate Panama as one of the best countries in Latin America for business and investment. At the same time, however, U.S. and other international investors have voiced concerns about corruption and inconsistent treatment, as well as late payments on government contracts. For these reasons, we encourage U.S. companies interested in investing in Panama to read our report on investing in Panama thoroughly and to contact the U.S. Commercial Service in Panama for guidance. We also recommend that U.S. citizens interested in purchasing property in Panama consult with the Embassy’s American Citizens Services section. Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.