The recent announcements by global corporations to close operations in Costa Rica have generated widespread concern among the country’s business community. These multinational companies, which include Intel, Qorvo, and Pfizer, are citing structural challenges as the main reason for their decision to scale back operations, move production to Asia, and lay off hundreds of employees.

The departures have raised concerns in the private sector, with business leaders calling for a renewed focus on competitiveness and the creation of a more attractive investment climate to reverse the trend. Costa Rican business leaders are speaking out, and their views are striking a chord. Calls for more competitive wages and cost structures, reductions in social charges, labor flexibility, and cheaper energy are becoming increasingly louder.

The Impact of Major Corporate Departures

The sudden departure of Intel from Costa Rica, announced on November 1, 2023, sent shockwaves through the business community. The decision of the American multinational company to close its Costa Rican operations, which manufactures microchips for global use, has been seen by Costa Rican business leaders as a major blow to the country’s economy.

The Intel exit from Costa Rica, the latest in a string of corporate closures and relocations to Asia, with companies also including Qorvo and Pfizer, has prompted business leaders to question the competitiveness of Costa Rica’s business environment. In response to the recent announcements, Costa Rican business leaders are calling for the government to take a more proactive approach in addressing these structural issues and promoting an environment that is more conducive to foreign direct investment.

AZOFRAS Calls for Action to Avoid Further Capital Flight

The Association of Free Trade Zone Companies (AZOFRAS), which represents numerous multinational corporations that have established operations under Costa Rica’s free trade zone regime, has also called for action to address these concerns. The head of AZOFRAS, Ronald Lachner, has urged authorities to address what he called a “serious wake-up call” sent by the companies that have recently left Costa Rica.

“The departure of multinational companies not only leads to the loss of quality jobs, but it also affects Costa Rica’s image and ranking as a place for investment in Central America. Costa Rica can no longer afford to minimize, underestimate, or, even worse, ignore the obvious and wait passively until more companies follow this trend, without being proactive in analyzing its competitiveness and reformulating strategies to improve it,” declared Lachner in a recent interview.

Costa Rican business leaders have specifically cited high social security charges, lack of a 4-day 3-day workweek, and high electricity rates as major structural challenges that must be addressed if the country is to retain and attract high-value investment.

The 4×3 Workweek: A Key Labor Reform for Competitiveness

One of the most significant proposals by Costa Rican business leaders in this regard is the implementation of a 4/3 work schedule, which consists of four days of work followed by three days of rest. The 4×3 workweek model, also known as a compressed workweek, is a labor system that has been widely adopted in other competitive manufacturing destinations.

Costa Rican business leaders argue that the 4×3 model would increase productivity, provide workers with a better work-life balance, and make the country more attractive to foreign investors looking for labor flexibility. The current labor code in Costa Rica makes it difficult for industries that require 24/7 production capacity, such as advanced manufacturing and the life sciences, to operate effectively.

The rigidity of the labor code and the requirement to pay extra for shift work and night work make it more expensive for companies to operate in Costa Rica. By adopting a 4×3 model, Costa Rica would be able to position itself as a more attractive destination for companies seeking to relocate production from Asia to the Americas.

Business leaders also emphasize the importance of reforms to Costa Rica’s social charges. Social charges are the mandatory contributions employers make to Costa Rica’s social security system, which provide Costa Rican workers with access to healthcare, pensions, and other social benefits. While Costa Rican business leaders recognize the value of these social benefits, they also argue that the current system places an excessive burden on employers, particularly those in labor-intensive industries.

Calls for Reduction in Social Charges

Business leaders and executives in Costa Rica have been vocal in their calls for a reduction in social charges, citing their impact on the country’s competitiveness and the cost of doing business. In addition to labor flexibility and social charges, Costa Rican business leaders are also calling for reforms to the country’s energy sector.

Electricity rates in Costa Rica are among the highest in the region, despite the country’s leadership in generating renewable energy. Costa Rican business leaders have called for reforms that would open the energy sector to greater private sector participation and introduce more efficient pricing mechanisms that better reflect production costs and lower the cost of electricity for businesses.

In addition to these issues, Costa Rican business leaders have also identified the need for improved logistics and transportation infrastructure, better digital connectivity, and enhanced investment in human capital development. Delays in customs clearance, limited port capacity, and a lack of integrated digital systems for trade and commerce add to the cost and complexity of doing business in Costa Rica.

Costa Rican business leaders have urged the government to address these issues in order to improve the country’s competitiveness and attract more investment. With the rise of nearshoring, Costa Rica has a unique opportunity to become a regional hub for high-tech and advanced manufacturing. However, this will require targeted investments, policy reforms, and a commitment to making the country more competitive.

In a rapidly changing global economic landscape, where countries are competing fiercely for investment dollars, Costa Rica cannot afford to be complacent. The recent corporate exits have exposed vulnerabilities in the country’s competitiveness, but they also offer an opportunity to reset and reposition Costa Rica for the future.

Human Capital Development and Investment in Bilingualism, STEM Education

Costa Rican business leaders have also emphasized the importance of investing in human capital development to attract and retain investment. While Costa Rica has a relatively well-educated workforce, compared to other countries in the region, Costa Rican business leaders have noted the need to better align technical and vocational education with the skills required in emerging sectors such as semiconductors, advanced manufacturing, and the life sciences.

The government and the business community can work together to promote bilingual education, STEM learning, and advanced technical certifications in the workforce. Programs that encourage collaboration between universities and technical institutes can help to ensure that the country is producing the talent needed to support the industries of the future.

Calls for Maintaining Exchange Rate Stability

Calls for the government to ensure exchange rate stability have also become louder. While Costa Rica does not have a fixed exchange rate regime, the currency has seen some volatility in recent months. Fluctuations in the exchange rate can have a significant impact on the financial planning and profitability of multinational companies that generate significant revenues in foreign currencies or are dependent on imported inputs.

Maintaining a stable exchange rate can provide predictability for investors and make Costa Rica a more attractive destination for long-term investment. In light of recent announcements, business leaders have recognized the need for a coordinated and urgent response to address Costa Rica’s competitiveness and reverse the trend of capital flight.

The government has responded to some of the business community’s concerns, including lowering social security contributions for employers, and it remains to be seen whether further action will be taken on other pressing issues.

But the message from Costa Rican business leaders is clear. Inaction is no longer an option, and the time for debate and discussion is over. The government must take concrete steps to address the concerns of the business community, improve the country’s competitiveness, and ensure that Costa Rica remains an attractive destination for investment.

The private sector is a vital partner in this process, and government agencies must work closely with business leaders to understand their concerns and develop solutions that work for everyone. The stakes are high, and the future of Costa Rica’s economy and thousands of jobs are at risk. It is up to the government and the business community to act decisively and work together to turn the crisis into an opportunity.

The Legislative Assembly is currently reviewing the “Special Regime to Incentivize and Facilitate High-Value Investments in El Salvador,” a legislative framework that would grant tax incentives, administrative and legal advantages to multibillion-dollar investments.

Presented by the Ministry of Finance on July 22, 2025, the proposed special regime is part of the Government of El Salvador’s (GSE) strategy to attract and compete for foreign direct investment (FDI). The country has been a competitive player for a number of high-impact investment projects, and this framework is expected to help facilitate and advance negotiations with prospective investors.

A Vision to Grow the Economy

While growth in international investment has not met expectations during President Nayib Bukele’s term, economic diversification, modernization, and productivity have remained top priorities. Bukele’s government was proactive about passing legislative frameworks to improve the ease of doing business and push macroeconomic reforms that would make El Salvador more competitive and resilient.

The Special Regime to Incentivize and Facilitate High-Value Investments in El Salvador (hereinafter the “Special Regime”) is a natural progression of that approach. It is a proposal that incentivizes foreign investment in large-scale projects that can change El Salvador’s productive model and bring it to a new level of capital intensity and sophistication.

For the purpose of the Special Regime, high-value investments are defined as those with a commitment to invest directly in El Salvador or transfer capital or assets worth $2 billion or more. Presented by Finance Minister Jerson Rogelio Posada Molina, the Special Regime opens a window for foreign capital to access El Salvador on a preferential basis and receive financial and administrative incentives to pursue large-scale business.

Incentives Package for Large-Scale Investors

The Special Regime offers a package of targeted benefits for large-scale investors. The most notable of these are:

• Tax Incentives: Corporate income tax , import duties, and value-added tax (VAT) exemptions or discounts.
• Administrative Privileges: Expedited processing and approval of business permits, registrations, and other administrative requirements.
• Legal Certainty: Stability and predictability in terms of adherence to the law.

El Salvador is currently among the top recipients of FDI in Central America, which has helped make up for low national savings, domestic investment levels, and productivity rates in the economy. The Central America Free Trade Agreement (CAFTA-DR) is also advantageous for investors as it gives El Salvador preferential access to the US market.

However, neighboring countries are competing for the same slice of international capital, which has become highly price sensitive due to factors like geopolitical risks, higher interest rates, and the global economic slowdown.

By offering financial and administrative incentives, as well as legal certainty for foreign investments, the Special Regime aims to position El Salvador as an attractive and reliable destination for FDI for projects of a particular size and nature. In addition to the traditional financial sector, this initiative will likely focus on a select number of strategic sectors, including:

• Technology & Innovation: Data centers, R&D centers, software development companies
• Infrastructure: Public or private infrastructure projects, such as highways, ports, airports, water or power plants, etc.
• Energy: Solar power, geothermal, wind energy, hydrogen, etc.
• Manufacturing: High-tech or precision manufacturing companies to set up operations in the industrial parks.
• Logistics and Supply Chains: Given its geographic position, El Salvador could become a logistics hub in the region, offering services to landlocked countries.
• Services: Business process outsourcing (BPO), financial services, call centers, etc.

It should be noted that, regardless of whether the Special Regime becomes law, none of these sectors would be “off-limits” for foreign capital or large-scale domestic investment.

Towards a Comprehensive Legal Framework

El Salvador has made significant strides in recent years in reforming its economy and polity. Dollarization, a stable macroeconomic framework, and improvements in physical and digital infrastructure have all been positive developments.

With its Special Regime, the Government of El Salvador is seeking to push these reforms further by creating a highly predictable environment for very large-scale investments. Legislative support for the Special Regime seems high as President Bukele’s Nuevas Ideas party holds a majority in the Legislative Assembly. The Special Regime is likely to be approved and passed into law relatively soon after its approval by the Assembly.

If so, it will help change the investment narrative for El Salvador, which has traditionally been focused on apparel and other low-value and low-productivity sectors. A focus on high-value investments in El Salvador should serve to direct more capital into the economy and spur economic growth and development.

Transformative Investments with Large Impact

Projects of this magnitude do not come by very often, but when they do, the local economic impacts can be significant. Infrastructure projects, advanced manufacturing facilities, or high-tech platforms for technology development and innovation are long-term investments. They can have an extensive and long-lasting impact on the country’s economic activity. Attracting one of these projects is therefore always a game-changer.

According to a study by a regional economic development agency, each new job created by a high-value FDI project can have a multiplier effect and generate additional employment both directly (through demand for additional capital and labor) and indirectly (demand for goods and services).

A $2 billion+ investment project would almost by definition require thousands of direct jobs, as well as several multiples of indirect jobs. The latter would depend on the nature of the investment (energy, manufacturing, etc.) but could reach or exceed tens of thousands, especially in the construction and infrastructure phase.

By extension, these new jobs will boost domestic demand and fuel growth in consumption, gross domestic product (GDP), and output. The more an FDI project requires local capital and labor, the higher its positive contribution to the economy.

No to Regulatory Arbitrage

Administrative bottlenecks and unpredictable business regulation are common obstacles to investment in developing markets. In this way, the Special Regime also serves as a signal to high-value investors that they can expect a very stable legal and business climate to develop their businesses.

The Special Regime offers legal stability clauses that protect investors from retroactive changes to tax and financial conditions, for example. They can also expect to work with a “one-stop shop” of government agencies to receive administrative support and guidance. Any disputes will be resolved in accordance with international best practices.

Predictable Regulatory Environment

Boosting El Salvador’s business climate ranking is yet another potential effect of this initiative. By eliminating what high-value investors see as impediments to business, El Salvador could receive a better rating in global ease-of-doing-business reports, as well as in investment climate surveys. This should also make it easier for the country to attract FDI in the long run, as El Salvador will no longer be seen as an outlier in terms of business regulation and related requirements.

In the medium term, one would also expect positive effects from large-scale, high-value investments on domestic education, vocational training, and human capital development. High-impact investments require a skilled workforce to carry out capital-intensive and high-value-added activities. In this way, these investments can benefit the country’s broader human development objectives.

El Salvador as an Investment Destination

While security, infrastructure, and institutional capacity have been long-standing issues for El Salvador, the Special Regime is an attempt to close the investment climate gap with its neighbors. El Salvador has other notable advantages, including preferential access to the US market, owing to CAFTA-DR. In that way, the Special Regime is both a necessary and complementary component of a comprehensive effort to draw large-scale FDI into the country.

To address and overcome existing barriers to foreign investment in El Salvador, the Special Regime is a crucial piece of that puzzle. It may well represent the difference between winning or losing the bid for foreign capital and therefore FDI for some of these large-scale projects.

Success for El Salvador

The proposal for a Special Regime to Incentivize and Facilitate High-Value Investments in El Salvador is a noteworthy development in the country’s efforts to attract foreign investment. It reflects the government’s proactive approach in creating an enabling environment for large-scale investments that can drive economic growth and diversification.

Although the Special Regime has the potential to increase FDI in El Salvador, its long-term success will likely depend on broader developments in the national economy and polity. Issues like security, crime, public administration capacity, and infrastructure may also have to be addressed to truly reap the full benefits of this framework.

In that way, the Special Regime can become a powerful instrument that will not only help El Salvador close the investment climate gap with its regional neighbors, but it can also become a tool to help overcome security, crime, and other structural barriers to investment and economic development.

Attracting a high-value investment in El Salvador has significant benefits for the country, from GDP growth to employment and exports. In this way, the Special Regime could become a key factor in opening El Salvador to transformative FDI and the transformative investments it brings with it.

The relationship between Uruguay and India has gained renewed momentum in recent years, driven by an increase in bilateral trade, investments in key sectors, and an active diplomatic agenda. According to a report published by Uruguay XXI in July 2025, the bond between the two countries is built on a foundation of shared history, technological cooperation, and a steadily expanding economic horizon.

In the context of global transformation, where geopolitics and trade flows are being reshaped, India is emerging as a key partner for Latin America. Uruguay, with its institutional stability and open trade policies, aims to establish itself as a reliable platform for Indian investment and as a strategic supplier of raw materials and agricultural goods.

During the recent BRICS Summit held in Rio de Janeiro, Uruguayan President Yamandú Orsi held a bilateral meeting with Indian Prime Minister Narendra Modi, reaffirming the mutual interest between Uruguay and India in strengthening political and economic ties.

Diplomatic relations between the two countries were formally established in 1948. Still, it was in the 2000s that the relationship took on a more strategic character—particularly after Tata Consultancy Services (TCS) established operations in Uruguay in 2002. Since then, Indian investments have extended to sectors such as information technology, pharmaceuticals, manufacturing, and logistics, consolidating India as one of Uruguay’s key Asian partners.

India: A Rising Economy and a Key Trade Partner

India has transformed into a major player in global trade. Despite the impacts of the 2020 pandemic, its economy rebounded strongly and reached historic highs in both exports and imports in 2022—evidence of its deepening integration into the global economy. This sustained expansion has made India a strategic source of industrial goods and an increasingly attractive destination for exporters worldwide.

For Uruguay, India represents a gateway to a market of over 1.45 billion consumers with increasingly diversified demand. In recent years, Uruguayan exports to India have grown significantly, reaching $93 million in 2024—more than six times the pre-pandemic level.

Approximately 79% of these exports consisted of forest products, primarily wood. The remainder included barley, wool, textiles, and, to a lesser extent, chemicals and leather. India’s growing demand for barley, linked to the post-pandemic development of its brewing industry, has created a new opportunity for Uruguay’s agricultural sector.

On the other hand, Uruguay imported goods worth $230 million from India in 2024. The majority of these imports were concentrated in mineral fuels (30%), vehicles and auto parts (17%), organic chemicals (11%), and industrial and electronic machinery. The textile sector also stood out, with over $7 million in imports of garments and fabrics.

Productive Complementarity and Growth in Trade

The trade landscape reveals a high degree of complementarity between the economies of Uruguay and India. India serves as a key supplier of industrialized goods, while Uruguay provides raw materials, agri-industrial products, and wood—essential components for India’s construction, energy, and food sectors.

However, the relationship still faces challenges. There is an asymmetry in the trade balance that could be addressed through greater export diversification by Uruguay, as well as through agreements that reduce tariff barriers and promote value-added trade.

Existing Agreements and the Path Toward a Trade Deal

• Currently, the legal framework governing bilateral relations includes three main agreements:
• The Bilateral Investment Agreement was signed in 2008 and is currently being updated.
• The Double Taxation Avoidance Agreement has been in force since 2011.
• The Preferential Trade Agreement between Mercosur and India, implemented in 2009, provides for tariff reductions ranging from 10% to 100% on select products, including pharmaceuticals, machinery, processed foods, and textiles.

Despite these advances, the agreements remain limited in scope. Both Montevideo and New Delhi have expressed interest in moving toward a Free Trade Agreement (FTA). According to the Uruguay XXI report, India does not require prior approval from Mercosur to negotiate a bilateral FTA—creating a real opportunity for Uruguay to expand its international integration independently.

Indian Investment in Uruguay: Technology, Services, and Energy

Indian investment in Uruguay has made a significant impact, especially in Zonamerica, where TCS established one of its main regional technology service centers. Other notable companies such as Infogain Latam, Deciral, and Oliva Garden have also expanded India’s presence in areas like IT services, pharmaceuticals, and textile manufacturing.

There has also been investment in renewable energy, through Suzlon Wind Energy, and in maritime transport, with the Avvashya Group. These investments align with the global expansion strategies of Indian multinationals, which in 2024 increased their foreign direct investment stock to $260 billion—10% more than the previous year.

Uruguay’s selection as a gateway to Latin America is no coincidence. Its reliable legal framework, investment incentives, and political stability make it an ideal destination for companies looking to establish regional operations.

Tariffs: A Structural Barrier Limiting Potential

One of the main obstacles to expanding Uruguayan exports to India is the varying level of tariffs applied, which differ significantly depending on the product. While some sectors face moderate rates, others are hindered by peak tariffs that reach up to 300%—particularly on agricultural goods.

For example:

• Pepper and rice face tariffs ranging from 70% to 100%;
• Powdered milk, corn, and nuts: 50% to 70%;
• Fruits such as grapes, apples, oranges, and pears: 30-40%.

In 2023, Uruguay paid $3.9 million in tariffs on exports to India—mostly on wood ($3.2 million) and seafood ($252,000). These figures contrast with the more than $387 million Uruguay paid in global tariffs that year, indicating that while India represents a relatively small portion, there is strong growth potential if preferential agreements can be secured.

The Uruguay XXI report also identifies untapped export potential in products like scoured wool, semiprecious stones, and soybeans—sectors that could scale up if more aggressive commercial strategies are pursued and improved access conditions are negotiated.

A Bilateral Trade Relationship with Room to Grow

Bilateral trade between Uruguay and India already exceeds $320 million annually, but analysts agree this is just the beginning. There are numerous opportunities to deepen the relationship in areas such as:

• Export of value-added food products;
• Attraction of investment in technology and logistics;
• Integration into pharmaceutical value chains;

Tapping into opportunities in the education and scientific sectors, where India also has a strong offering.

The main challenge is to diversify Uruguay’s export portfolio, which is currently heavily reliant on wood, and to move toward a more balanced and sustainable partnership. Diplomatic cooperation, investment agreements, and an active trade policy will be essential for both countries to capitalize on their economic complementarity.

A 75-Year Relationship with a Forward-Looking Vision

Seventy-five years after establishing diplomatic relations, Uruguay and India now share a mature agenda that includes historical, commercial, and strategic components. The interest of both governments in deepening bilateral ties reflects a commitment to a development model based on openness, innovation, and market integration.

In an era of geopolitical transformation, strengthening relationships like this enables countries such as Uruguay to diversify their trade partners and reduce reliance on traditional markets. For India, establishing stable alliances in Latin America is crucial to its global outreach strategy.

In recent years, there has been a notable trend in Panama, one of the world’s leading countries for global wealth migration. The country has gained increasing popularity among the high-net-worth individual (HNWI) community, as more and more millionaires are migrating to Panama. In fact, Panama has emerged as a leading destination for global capital, not only in the Latin American region but worldwide. The new wave of capital inflow into Panama is driven by the wealthiest individuals from other countries, with the United States of America, Canada, China, and European countries making up the largest share.

This blog post will discuss the top reasons millionaires are migrating to Panama and the benefits of Panama as a global wealth destination. The analysis will be based on data from the latest Millionaire Migration Report from Henley & Partners and New World Wealth.

Record Capital Inflow to Panama

It is no surprise that Panama is one of the world’s leading destinations for global wealth migration. The recent Millionaire Migration Report from Henley & Partners, a global citizenship by investment company, in partnership with New World Wealth, an expert on world wealth data, found that Panama is among the 10 fastest-growing markets for attracting millionaires’ wealth in the world.

According to the report, it is expected that the number of millionaires who relocated to Panama by the end of 2025 will reach around 300. On the other hand, countries like Brazil, Mexico, Colombia, and Argentina are losing the most millionaires, with around 1,200 millionaires leaving Brazil only this year.

What are the Millionaires Moving to Panama?

Millionaires migrating to Panama are mainly from the highest-income countries, including the U.S. and Canada. The largest part of HNWI relocating to Panama each year is over 60%. The other share comes mainly from Asian countries like China and Japan, and from European countries. A relatively small proportion comes from the countries that are now in a state of social and political instability and sometimes economic unpredictability.

The main reason that many of the wealthy from other countries choose Panama is the safety of their assets. The other significant factor is the ability to choose where and when to move, which means that the relocation option is not immediate but instead taken by people who are more likely to plan their finances for the long term.

The other considerations include the fear of fiscal overreach or even expropriation and the need for peace of mind for their wealth and its intergenerational transfer. For the wealthy from other countries,  migrating to Panama is especially attractive due to:

Tax Considerations

The main consideration for millionaires when it comes to their relocation decision is the tax situation in the destination country. In this respect, Panama stands out as it has no inheritance or estate taxes, as opposed to many other jurisdictions around the world.

The lack of these taxes is especially important for older millionaires who want to leave their wealth to their children. In addition to these tax advantages, Panama also has one of the lowest rates of capital gains taxes in the world, which is another factor to consider in terms of optimizing and preserving wealth.

Financial Sector Sophistication

Panama is also a country with a well-developed financial services sector, which includes:

– a well-developed banking system;

– services in trust and estate planning;

– legal services for international clients;

– a mature and stable insurance sector.

For these reasons, the country is an especially attractive destination for the relocation of HNWIs as well as their intergenerational transfer of wealth.

Opportunities for Luxury Living

The other key factor in choosing the best global wealth destination is the lifestyle, especially for those millionaires who are used to first-class living in urban environments. Panama City offers luxurious and modern residences and condominiums, upscale neighborhoods, including Punta Pacifica and Costa del Este, private golf courses, upscale shopping centers, and fine dining options. At the same time, there is a cosmopolitan feel to the city and country in general, as well as beautiful beaches.

The country is also rich in biodiversity, with a tropical climate and eco-tourism options. These aspects of Panama make it a very attractive destination for a variety of millionaires, including those with a lifestyle that has a connection to outdoor living.

Improved Legal and Regulatory Environment

The other notable factor that contributed to the favorable change in Panama’s reputation among global millionaires is the country’s recent efforts to improve its regulatory and legal environment, including, for example, the country being removed from multiple international gray lists related to money laundering and other financial irregularities. The reasons that this change in the perception of Panama can help the country attract and retain global capital include:

– increased confidence of international investors who are more sensitive to these issues, such as legitimacy, long-term stability, and the law;

– efforts by Panama’s government to increase the country’s transparency and improve its institutions, as evidenced by the judicial system’s increased aggressiveness in some high-profile corruption cases.

Another element that can help Panama attract more and retain global capital is the country’s strategic position in the Central American region. The country, and its capital Panama City in particular, offer direct and nonstop flights to most major cities in the U.S. as well as Europe and many other places in Latin America via Tocumen International Airport, often referred to as the “Hub of the Americas.”

The other factor, which, of course, is the Panama Canal, is one of the world’s busiest shipping lanes. The high degree of connectivity and transport infrastructure makes it much easier for the relocated millionaires to manage their other international interests and frequent travel. At the same time, other aspects of Panama’s infrastructure, such as telecommunications, time zone, and the power grid, are also very suitable for highly mobile entrepreneurs and investors, contributing to Panama’s status as one of the leading global wealth destinations for many high-net-worth individuals.

Stability of Panama’s Institutions

It is no secret that many countries in the Latin American region, including some of the wealthiest in the area, like Argentina, Colombia, Brazil, and Mexico, are currently facing challenges in their governance, rule of law, and macroeconomic policy. Panama has found a way to deal with that. While Panama’s government may not be perfect, the government and political system do not have to deal with the significant structural challenges that many other Latin American countries must deal with.

One of the most prominent illustrations of Panama’s institutional strength, at least when compared to its regional peers, is the fact that it does not have a standing army. While this fact often comes as a surprise to many foreigners and visitors to the country, the reality is that this has been one of the most notable factors of Panama’s ability to concentrate on building the capacity and efficiency of its civilian institutions, which now serve the millions of residents of the country, including the newly arrived millionaires and their families.

Panama Attracts $2.4 Billion in Global Wealth

As many high-net-worth individuals from other countries are migrating to Panama, this brings in about $2.4 billion of capital. The reasons that Panama is a global wealth destination include:

– a direct injection of money into the country’s real estate, finance, tourism, and luxury goods markets, which in turn supports local employment and demand for high-end products;

– the capital, tax, and regulatory environment, as well as the ability to facilitate international connections via the Panama Canal and its airports, are often reasons that the wealthiest individuals choose to relocate to Panama.

Panama is the Tenth Growing Destination for Global Millionaire Wealth in the World

There are two countries in Central America that Panama can now be mentioned alongside, including Costa Rica, as leading global wealth havens, which represent an opportunity not only for many local people but also for the region as a whole.

While Costa Rica has a comparative advantage in terms of ecological sustainability and higher quality of life, which works exceptionally well for retirees, Panama is a different type of country. Panama has a strong financial sector infrastructure, a tax environment that is especially beneficial for wealth optimization and its intergenerational transfer, as well as the advantage of great international connectivity. These aspects have already made Panama a global wealth destination for many high-net-worth individuals and is likely only to continue attracting global capital in the years to come.

This is a very strong position for any country to be in, and to have now become one of the world’s leading global wealth havens. Panama City is a magnet for attracting global wealth, and there is every reason to believe that this trend is going to continue in the foreseeable future. This means that the country is likely to remain among the most attractive global wealth havens as more and more HNWIs continue to migrate to Panama for an increased tax optimization potential, as well as for peace of mind for the safety of their wealth and the well-being of their families.

Key Takeaways

– Exports from the free trade zone sector in the Dominican Republic hit a record US$4.2799 billion in the first half of 2025 and represent the highest-performing source of foreign exchange.

– In June, shipments abroad from the free trade sector reached $771.96 million, a 2.8% increase over the same month in 2024.

– The top export categories from the DR’s free trade zones are medical/pharmaceutical manufacturing, electronics/electrical equipment, and tobacco and cigar production.

Free Trade Zone Sector in the Dominican Republic Is National Export Leader

The free trade zone sector in the Dominican Republic is one of the country’s most productive, innovative, and globally integrated commercial sectors. During the first six months of 2025, exports under the free zone regime reached a record $4.2799 billion. This is further evidence of its growing importance in the country’s foreign exchange earnings. The free trade sector in the Dominican Republic is also a consistent national export leader. June 2025 exports from free trade zones were $771.96 million, 2.8% above the same month in 2024. The first half of 2025 represents one of the strongest export performances on record.

In recent years, government policies and incentives have also focused on improving the sector’s competitiveness, attracting investment, and diversifying access to international markets.

Dominican Republic’s Free Trade Zone Exports: Composition

The fastest-growing and highest-value export categories from the free trade sector in the Dominican Republic are medical and pharmaceutical products. These items represent a plurality of the total value of DR free zone exports. Other leading export categories from the Dominican Republic’s free trade sector include electrical and electronic equipment, textiles, and agribusiness products.

With a wide range of export products now meeting quality standards and production requirements from the U.S. and EU, DR free trade exports are among the most diversified of any nation in the Caribbean.

Main Countries of Destination for DR Free Trade Exports

In addition to a diversified basket of export products, the free trade zone sector in the Dominican Republic is also regionally and globally integrated. For decades, the United States has been the country’s leading trade partner for Dominican exports and a destination for foreign direct investment. This historical relationship has deepened with trade agreements such as the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR), which eliminated tariffs and simplified customs rules on a variety of goods.

Puerto Rico, the Netherlands, and Haiti are other leading destinations for exports from the free trade sector in the Dominican Republic.

Sector Impact and Government Programs

The Dominican government has invested heavily in creating an enabling environment for export growth in the free trade zone sector. Víctor “Ito” Bisonó, the country’s minister of industry, commerce, and MSMEs, called the DR’s free trade sector a “key generator of foreign exchange and employment.”

He noted that the high volume of exports during the first half of 2025 is “proof of the resilience and productivity of the Dominican manufacturing sector and the success of the public policies implemented to attract investment, enhance competitiveness, and increase access to new markets in the international arena.”

The government’s efforts to attract investment and expand free trade exports are not limited to new economic incentives. In addition to new or updated free trade parks near major ports, airports, and highways, the administration has also emphasized creating a modern infrastructure with the latest in green energy, smart manufacturing, and ESG-compliant operations.

Key Export-Driven Subsectors

Free trade zones in the Dominican Republic are now active in more than 750 companies and across all major export sectors. The most productive subsectors include apparel and textiles, agribusiness and food processing, electrical and electronic components, medical devices and pharmaceuticals, BPO, and information technology services.

Employment and Industrial Zones

Direct employment across the free trade sector in the Dominican Republic is also above 192,000 workers as of the second quarter of 2025. Free trade parks are spread across the entire country and account for over half of the country’s total number of licensed industrial parks.

Industrial and Logistics Hubs

The government’s focus on attracting logistics and manufacturing investment to the Dominican Republic continues with infrastructure upgrades. Industrial parks now in the initial stages of development are near ports, airports, and highways and have high connectivity with companies focused on nearshoring, just-in-time manufacturing, and frequent manufacturing or container shipments.

The Dominican Republic’s seaports, particularly Caucedo and Haina, are among the most modern in the Caribbean. Modernization of Las Américas International Airport and the Northern Corridor are also in progress, providing greater incentives for investors who value streamlined transportation and logistics networks.

Industrial Park Features and Technologies

Industrial park operators have also invested heavily in upgrades to existing sites and the construction of new zones. Sustainable energy sources, smart manufacturing technology, and certified clean-production operations are becoming standard in modern free trade parks to meet global ESG standards.

In addition, new facilities and updated programs in industrial parks are offering more space and resources for R&D, business incubators, vertical farming, and precision agriculture.

Market Challenges and Opportunities

The free trade zone and export sector face several challenges on the national and global stage. International economic contraction, geopolitical risk, and supply chain challenges still have a high degree of uncertainty, and the Dominican Republic’s export-driven sectors must adjust and adapt to the new environment.

Nearshoring to and from the U.S., digital manufacturing, e-commerce fulfillment, and clean tech represent major emerging opportunities for which the Dominican Republic is well-positioned. Geographic proximity to the United States, a modern logistics infrastructure, and a commitment to economic diversification all provide incentives for investors to consider the country as they reassess production and supply chain footprints.

Dominican Republic’s Strategic Vision and Opportunities for Growth

The free trade sector in the Dominican Republic will be one of the cornerstones of the administration’s long-term economic vision. Bisonó has stated that it is part of the country’s industrial, manufacturing, and logistical transformation.

Beyond their current role in generating exports, these industrial parks are expected to become anchors for the country’s efforts to attract high-tech industries and strengthen regional supply chains. Programs like Zona Franca 4.0 are integrating digital technology into free trade operations to ensure competitiveness for the coming phase of global industrialization.

Conclusion: Opportunities in Dominican Republic Free Trade Zone Exports

The performance of the free trade sector in the Dominican Republic during the first half of 2025 and its continued success as the country’s highest-value source of foreign exchange is a reflection of several factors. Improvements in the investment climate, greater international and regional integration of export sectors, and targeted government programs to support this critical sector have contributed to high levels of sustained growth.

Exports from the DR’s free trade zones are also a bellwether for future economic development. The country is on track to strengthen its position as a regional logistics and industrial hub, attract new and existing investors, and drive the next phase of job creation.