PANAMA: Building a global businessplatform to serve the world. Ricardo Quijano Minister of Trade and Industry June 2012
Panama is known for its high rate of economic growth• The country’s sterling economic success is based on a strong macro- economic policy and excellent management of the Panama Canal and associated transportation services.• The Government of Panama has promoted economic growth over the last decade through open market policies and encouraging trade.
Openness to Foreign Investment • Key Panamanian strengths are considered to be cross border trading and access to financial services. • Local and foreign investment is treated under the same terms and conditions, pursuant to non- discrimination principles. • Panama became the fifth country in Latin America to obtain investment grade rating. • The three (3) major credit rating agencies have confidence that the Government of Panama has the willingness and ability to manage its debt obligations.
Investment Grade and International Economic Achievements • Doing Business Report (2011 – 2012) – World Fitch Ratings Bank (June 2011) Ranked 61 of 183 economies • Competitiveness Report (2011 – 2012) – International Economic Forum Ranked 49 out of 142 countries, increasing four places compared to the Standard & previous year Poor’s (July 2011) • Business Destination- Forbes Magazine Ranked 60 out of 134 countries as a recommended destination for business • Panama, among the 10 least expensive cities Moody s to live in the world, according to The (2011) Economist Intelligence Unit The cheapest city to live in America
Panama: Connecting TradeExpanding trade and our international alliances Free Trade Agreements– FTAs In order to promote competitiveness and increase exports of our private sector to the U.S., Canada, European Union and countries of Central and South America: Panama has recently signed bilateral investment treaties, conventions for the avoidance of double taxation 8 implemented FTAs 6 FTAs in the process of implementation 7 FTAs currently under negotiation 4 Partial Scope Agreements
Foreign Direct Investment (FDI) A pillar in economic growth• Foreign direct investment increased by 19%, with a total of $ 2.8 million in FDI.• Nearly 70 Multinational Enterprises have been established to benefit the legal framework that provides incentives for investment.• The Investment Stability Law guarantees all foreign and domestic investors equal rights in terms of their investment and business practices. It also provides a 10-year stability in terms of legality, and it will remain identical to that in force at the time of registration.
Regulatory framework to attract investment and promotedevelopment of technologies • Panama is an attractive jurisdiction for the establishment of offshore corporations, enterprises and industries. • Flexibility of the incorporation law and only income generated within Panama is taxable. • There are special tax and incentives for manufacturers to locate in an export-processing zone. • There are no legal requirements such as minimum export percentages or the obligation to invest in local companies or purchase goods from local vendors.
Free Trade Zone/ Industrial Parks• Free Zones are zones of free enterprise, specifically delimited, for the establishment of enterprises from all over the world whose activities are the production of goods and services.• Panama currently has 14 Free Zones, with 95 companies registered.• Enterprises Permitted within the Free Zones: Manufacturing, Assembly Enterprises. Finished or Semi-Elaborated Processing Products Enterprises. Export Services Enterprises. Cutting edge technology, scientific research, higher education. Logistics services, environmental services, health, and general services.
Panama-Pacifico La posición de Panamá permite a las empresas aprovechar los sistemas logísticosThe Panama Pacifico Special Economic Area is an area assigned for theproduction of goods and services with high added value and technology.
Logistic sector headquarters in PanamaRegional headquarters of Multinational Companies • Judicial stability facilitates trade and provides investment incentives. • One of the most competitive legislations in the region. • Laws specifically aimed at multinational companies complement the incentives offered by special zones.
City of Knowledge• The City of Knowledge is a scientific, technological and entrepreneurial park located by the Panama Canal.• It offers special labor and immigration provisions.• All benefits awarded have a duration of 25 renewable years, which is more than any other incentive law.
The Colon Free Zone• Registered 40% growth; reaching 30 billion in merchandise.• The largest free zone in the Americas and the second largest in the world.• The CFZ is an imposing area that does business with every major country one can imagine.
LogisticsInterconnection infrastructureThe Creation of a Logistics Cabinet • Logistics Cabinet is made up of public and private sector representatives. • Created in order to benefit from Panama’s geographical position as well as from the vast variety of business opportunities that will permeate after the increase of traffic through the expanded Interoceanic Canal, expected to be completed by 2014. • Its main objective is to integrate programs and goals for the elaboration of a master plan promoting Panama as a logistics and commercial center with a global vision.
Multimodal Logistics Center for the Americas • An infrastructure network created because of the country’s strategic geographic position. • Network of highways and roads to connect the main centers of production. • A railway connecting the two oceans in 1 hour, transports more than 350 thousand containers per year • A port system with state of the art technology, facilitating global trade in the Atlantic and Pacific
The Panama Canal delivers record amountof over 1,000 million dollars • In 2011, the Canal gave the country a record intake of 1,043 (one thousand 43) million dollars. • The increase in contributions is the result of record high tonnage through the Canal. • Direct contributions from the Canal under panamanian administration total 6,576 million dollars.
The Panama Canal Expansion • Estimated Cost investment of U.S.$ 5.250 million. • Will increase the benefits for our country and enhance ESCLUSAS ACTUALES international maritime commerce. • Shipping companies are designing and TERCER JUEGO DE ESCLUSAS building post-Panamax vessels to supply the growing demand.
Trans-Isthmic Railroad Transshipment from port to port Pacific Atlantic • The railway is considered a "dry canal" because it allows the transfer of goods from one ocean to another, without customs clearance. • This service currently operates at its maximum capacity.
Panama is the country with the largest maritime connectivity in Latin America and the Caribbean• The Panama Canal connects more than 144 shipping routes, enabling the country to offer a wide range of logistics services.• Its advantageous geographical position makes it the country with the largest maritime connectivity, according to the United Nations Conference on Trade and Development (UNCTAD).
Innovative Port Facilities in Latin America • Port activity showed a 20% increase in the Atlantic side and a 17% increase in the Pacific side. • Panamanian ports generate 24% of GDP. • Panama has also been the main cruise terminal facility in Latin America.
Public Works - Road Infrastructure • 3 billion dollar investment in infrastructure. • Construction and road reorganization through the expansion and creation of new infrastructure, including 23 points of the city. • Construction of the Cinta Costera III in Casco Viejo is necessary for the road map of the city and will bring great economic benefits to the country.
Integrated Transportation System Metro Bus Transporte Colectivo Nueva flota de buses cómodos y con aire acondicionado, que ofrece a los pasajeros mayor rapidez y calidad en sus viajes por la ciudad. Metro BusInvestment of US$ 1,200 million. Completion and estimated delivery byDecember 2013. Its operation begins in 2014.
Air Connectivity • Panama has the largest air connectivity in Latin America, according to the International Air Transport Association (IATA). • Tocumen International Airport has become the main hub of the region. • Tocumen International Airport offers 16 daily flights to the United States of America. • The creation of the Muelle Norte,64 Destinations consisting of 12 new gates, will29 Countries increase passenger transit from six to nine million, annually. • Panama has become the site in Latin America for air transportation training because of our flight In June 4 new destinations simulators.
Airport investment exceeding US$ 225 Million1. International Airport Enrique Malek - Chiriquí 2. International Airport Río Hato, Coclé 3. International Airport Panamá Pacífico, Panamá 4. International Airport Marcos A. Gelabert - Panamá 5. International Airport of Tocumen - Panamá 6. International Airport Enrique A. Jiménez - Colón 6 4 5 3 1 2
The Panamanian banking center is the most modern andsuccessful in Latin America • Free movement of U.S. Dollar and free movement of capital, without a Central Bank. • Financial System with a solid and diverse International Banking Sector, whose assets increased by 15.2%. • In the insurance sector, premiums grew by 14.6%, surpassing the barrier of 1 billion written premiums. • New Law on Insurance and Reinsurance.
Panama seeks to stay ahead of the curve of commerce andtelecomHotel and Real Estate Offer in “Cadena de Frío”Panama. Telecom 9 Centers for collections. Panama became one of theReal estate is one of the mostdynamic, up 24%. 8 Public markets. first countries in the world Refrigerated transport system to offer free wirelessPanama currently offers Investment US$297 Million broadband access25,000 hotel rooms with nationwide, reaching 80%renown hotel brands from of the population.around the world.
Panama: the best destination to visit in 2012• The New York Times highlighted Panama in its January 2012 edition, using the slogan “Go for the Canal. Stay for everything else”.• Listed in The Economist Intelligence Unit, as the least expensive city to live in America and the sixth in the world.• Strategic site for meetings, conventions and regional events. The February 2012 issue of Forbes Magazine, recognized Panama as an excellent place to invest.
Final Remarks • Panamas economic growth is driven by the dynamism of the public sector, seeking to increase productivity through its investment programs. • Logistics in the country has led to significant improvements in levels of competitiveness, which have been recognized by international organizations, business magazines and financial newspapers worldwide. • Growth rates will be maintained in the coming years characterized by the diversification in the economy, providing the basis of both growth and sustainability of development. Thank You