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Business Profile
Economy: Panama has a relatively prosperous economy based on agriculture, light industry, revenues from the Panama Canal and the service sector. Over half the land area is given over to agriculture: the main cash crops are sugar cane, coffee and bananas, while the main food crops are rice, maize and beans. Commercial cattle-raising is also prominent. The country has significant reserves of timber, particularly mahogany, and good fishing stocks, shrimp being a major and valuable export earner. Local industries include food processing, clothing, paper and building materials. Panama also exports petroleum refined from imported crude oil. Further revenue is obtained from tolls levied on ships passing through the Panama Canal (which came under full Panamanian control in 2000) and from registration fees for a plethora of ‘offshore’ companies exploiting Panama’s strict banking and commercial secrecy laws (although the Government has recently instituted measures to permit disclosure in suspected cases of money-laundering).
Other important sources of revenue include the Colon Free Trade Zone established near the Canal through which 30 per cent of all Panamanian trade passes, an ‘open’ shipping registry (ie a flag of convenience) and a rapidly growing tourist industry now worth more than US$500 million annually. A major reform programme undertaken during the 1990s saw the privatisation of many state enterprises, reform of the tax and social security systems, and the removal of price controls and import tariffs. The economy was stagnant during 2002 with annual GDP growth and inflation both around one per cent, although there are signs of a pick-up. Panama is a member of the Inter-American Development Bank. About 40 per cent of two-way trade is with the USA and Japan; Costa Rica and Germany are the country’s other important trading partners. Panama is also attracting growing interest from Hong Kong-based commercial concerns.
Business: Punctuality is appreciated and the exchange of business cards is normal. Suits are necessary for business meetings. Office hours: Mon-Fri 0800-1700, Mon-Fri 0730-1630 (government offices).
Commercial Information: The following organisation can offer advice: Cámara de Comercio, Industrias y Agricultura de Panamá (Chamber of Commerce), Apartado 74, Avenida Cuba y Ecuador, Calle 34, Panamá 1 (tel: 227 1233; fax: 227 4186; e-mail: infocciap@panacamara.com; website: www.panacamara.com).
Copyright © 2003 Columbus Publishing Ltd.
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