The National Center for Competitiveness’ (CNC) 2025 Foreign Direct Investment Pulse points out that Panama maintains strategic factors for foreign direct investment (FDI), but the country is going through a process of internal frictions that generate a series of frustrations related to bureaucracy, costs of doing business (energy), and specialized talent. The study also suggests that it is necessary to work on consolidating regulatory certainty, expediting the digital transformation of the state, and training human capital to strengthen the country’s investment dynamism and recover the trend before the pandemic, as well as consolidate Panama as a regional hub for innovation, logistics, and sustainability.
The report concludes that it is a matter of time to work hard on reinforcing confidence in Panama foreign direct investment.
Panama maintains a solid competitive attractiveness for foreign direct investment (FDI), sustained by international connectivity, macroeconomic stability, and special economic regimes. Despite this, frictions continue to be observed in attracting new projects to the country. Among the internal factors that affect competitiveness are government bureaucracy, high operating costs (energy), and lack of specialized talent, according to the CNC’s 2025 Foreign Direct Investment Pulse. In this way, the study notes that solving these structural tensions will be key to maintaining the ability to attract Panama foreign direct investment over the long term.
It is recommended to work on prioritizing regulatory certainty, promoting the development of qualified talent, advancing in the digitalization of the state and towards a more aggressive strategy to promote Panama in the international market. This, with the idea that these measures would allow recovery of the previous dynamism, prior to the impact of the pandemic, and give strength to the position of the country as a regional hub for innovation, sustainability, and business.
Recent Panama foreign direct investment performance: partial recovery and cyclical factors
In 2024, FDI reached USD 2.832 billion (equivalent to 3.3% of nominal GDP), up 28.9% over 2023. The performance is explained mainly by reinvested earnings, according to CNC data based on information from the National Institute of Statistics and Census (INEC).
However, in the first half of 2025, net outflows were USD 361.0 million, compared to the USD 1.701 billion posted in the same period in the previous year. This was due to a strong movement of international-license banks by portfolio and bank reorganization, as well as divestments.
In this way, the period recorded positive figures in key segments such as general-license banking (USD 493.6 million), the Colón Free Zone (USD 302.6 million), and other companies (USD 479.9 million), which suggests that the negative result is due to a transitory effect and not to a structural deterioration of the country’s competitiveness.
This has not been a hindrance for Minister of Economy and Finance Felipe Chapman to remain optimistic about the progress of infrastructure works, measures, and management by the government of President José Raúl Mulino aimed at strengthening investor confidence in Panama foreign direct investment.
“I believe that as we start to see concrete results from the plans that this government is carrying out, foreign investment will begin to accelerate, and we will have an interesting increase in investment in the country. In addition to that, with a renewed reinvestment of profits by companies already established in the country,” Chapman recently said.
The Minister also added that “Panama is already in a race to attract direct and financial investments” with examples such as the acquisition of the Canal railway by an autonomous division of Maersk and the purchase of Cemex’s Panamanian operation by Grupo Estrella. APM Terminals acquired the PCRC for USD 600 million, while Grupo Estrella acquired the Cemex plant for USD 200 million. “With these two operations alone, we are already talking about an amount close to USD 1 billion. That is significant. Close to more than 1% of GDP. It is a very important percentage derived from private investment. Remember that in Panama, the flow of dollars to the country basically comes through the Canal’s export of services, through tourism, logistics, and banking services, all of which are growing,” Chapman added.
Sector concentration and main sources of capital
FDI was concentrated mainly in the following activities, according to data from CNC:
- Commerce (42%)
- Financial and insurance activities (18%)
- Manufacturing (11%)
- Information and communications (10%)
In that year, commerce and manufacturing were able to recover, while financial activities and information and communications registered negative variations.
FDI stock closed at USD 64.769 billion in 2023, an increase of 3.5% over 2022. The 10 leading countries account for 75.9% of the total (USD 49.165 billion). They include:
- United States (19.6%)
- Colombia (17.3%)
- Barbados (10.3%)
They are followed by Switzerland (7.1%) and the United Kingdom (4.2%). All of them increased their participation above that of 2022, except Spain, which reported a 2.2% decrease. The Netherlands recorded the highest growth, with 15.3%.
Business climate: positive expectations and operational frictions
According to the CNC, 83% of companies state that Panama meets expectations, although a series of frictions continue to be experienced, such as:
- Delays in procedures (33%)
- High energy costs (17%)
- Corruption (17%)
- Transportation problems (17%)
- Shortage of talent (17%)
The most frequently indicated internal risks were changes in regulations (26%), political uncertainty (19%), and bureaucratic burden (13%).
In the external environment, the most relevant risks are associated with global financial volatility (41%), geopolitical instability (27%), and regulatory changes in partner countries (23%).
Expectations for Panama foreign direct investment remain cautiously optimistic:
- 39% of companies stated that they plan to increase their investments
- 50% will maintain current levels
- 11% are considering reducing investment
In this sense, reinvested earnings continue to be the main source of FDI (69%). In this context, companies plan to invest more in human capital (32%), automation and digitalization (27%), new business lines (14%), and infrastructure and R&D (9%).
In the labor market, 44% of companies anticipate an increase in their workforce, mainly by 1 to 10 employees, given the growing demand for bilingual workers with technological skills. In total, only 17% of companies currently export from Panama, however this percentage represents a group that projects growth in external sales.
ESG and outlook for the future
The study also points out that 56% of companies have environmental, social, and governance (ESG) plans. Panama is perceived as a positive environment for advancing ESG processes due to its international positioning and the impulse towards sustainable innovation that it is currently being generated. The corporate priorities are oriented towards reducing carbon footprint, advancing inclusion and diversity, and strengthening gender equality.
Investors see the country’s future in the next five years by consolidating Panama as:
- Regional headquarters (50%)
- Logistics hub (28%)
- Innovation center (11%)
- Export platform (11%)
Foreign companies are mainly responsible for knowledge transfer (63%), corporate social responsibility (21%), and local innovation (13%). These figures provide an idea of the long-term strategic value of Panama foreign direct investment and its multiple contributions to advance the country’s competitiveness in different sectors.
Conclusion
In general, the CNC’s survey affirms that Panama remains a favorable destination for foreign capital, but it is urgent to apply the necessary reforms to unleash the country’s full potential. It is necessary to work on aspects such as streamlining bureaucracy, increasing the scope of the development of talent, and strengthening regulatory certainty, among others, so that Panama can reinforce its position as one of the most dynamic destinations for investment in the region.