News

International investment is flowing into Panama at unprecedented levels, according to the latest government data. Foreign Direct Investment (FDI) into Panama grew 17 percent in 2015, as more companies established or expanded their operations, the government reports.

So far this year the pace of investment is continuing, with steady investment in-flow from Canada, Colombia and the U.S., Minister of Economy and Finance Dulcidio de La Guardia told reporters.

Not coincidentally, these countries are also among the biggest buyers and renters of property in Panama City. FDI is one of the key barometers of international activity in the city, directly translating into more executives and their families moving to Panama.

In part, the growth in FDI reflects the government’s commitment to several key infrastructure projects. The Ministry of Economy and Finances said this week the government will spend $5.2 billion dollars between 2016 and 2019 on a menu of large scale projects, La Prensa reports. Major projects include Line Two of the metro, the fourth bridge over the Panama Canal, development in Colon and the second terminal of the Tocumen International Airport.

Foreign investment also has been bolstered by the growth of logistics hubs and corporate centers in Panama, as Panama City grows in its role as the regional business hub. Projects have also been fueled by the expansion of the Panama Canal, which appears set to open in June. Panama leads the regions in port infrastructure, availability of financial services, banking strength, FDI and technology transfer, officials note.

The growth in FDI came despite struggles with the growth of the Colon Duty Free Zone, which actually saw a drop in investment. But Colon’s status may be aided by the recent move to remove Panama from the banking world’s international “gray list,” after the government took steps to meet international financial reporting standards.

Duncan McGowan is president of Punta Pacifica Realty, a Panama real estate agency focused on Punta Pacifica, the exclusive neighborhood of 18 towers perched on the edge of the Pacific Ocean.