Julio Moltó, the Minister of Commerce and Industries of Panama, recently emphasized the country’s continued appeal as an investment hub, especially in industries like technology and semiconductors. In an interview, Moltó discussed Panama’s ongoing economic development, the impact of strategic alliances such as MERCOSUR, and the growth fostered under the Special Regime for Multinational Enterprises in Panama (SEM). This special regime continues to draw foreign investment, promoting economic diversification and a favorable environment for multinational corporations.
MERCOSUR: A Golden Opportunity for Panama
In less than six months, Panama became an associate state of MERCOSUR. This significant development offers Panama strategic advantages in accessing the southern markets of Latin America. Moltó underscored that this integration places Panama in a prime position to leverage its benefits, particularly in logistics, trade, and investment. “MERCOSUR represents taking advantage of Panama’s strengths, such as its excellent port infrastructure, the Panama Canal, and its advanced air transportation network,” said Moltó.
This alliance is set to bolster Panama’s logistics and business center role, providing seamless connections to markets in Brazil, Argentina, Paraguay, and Uruguay, among others. This integration opens doors to new investments, especially in sectors such as logistics and ports, with the Special Regime for Multinational Enterprises in Panama as a catalyst for attracting multinational corporations interested in expanding into South America. Panama’s geographic position, robust infrastructure, and favorable business environment make it an ideal gateway to the rest of the continent.
Economic Reactivation and Pending Projects
One key component of Panama’s economic reactivation strategy has been the government’s focus on resurrecting important projects abandoned by previous administrations. Under the leadership of President José Raúl Mulino, Panama has launched several programs aimed at reinvigorating its economy through infrastructure projects. These include the long-awaited refurbishment of the Mariano Gula Stadium in Colón and various projects focused on improving healthcare and education infrastructure.
Moltó outlined that the government has identified 33 key projects critical to Panama’s economic recovery. Fourteen projects have already been announced; the remainder will be unveiled in the coming weeks. These efforts are designed to boost the economy and create significant employment opportunities. According to the minister, the ongoing projects will generate approximately 10,000 jobs, helping to stimulate economic activity across multiple sectors.
Moltó also highlighted the ongoing work to bolster sectors such as agriculture. He cited efforts to support the dairy and meat industries, which are expanding rapidly and exploring new export opportunities. This holistic approach to economic development, combining infrastructure investments and sector-specific growth, positions Panama for sustained growth in the coming years.
Special Regime for Multinational Enterprises (SEM)
An essential pillar of Panama’s economic strategy is the Special Regime for Multinational Enterprises in Panama (SEM). In 2024, this regime facilitated the entry of 12 new companies, attracting an impressive $24 million in foreign investment and creating 132 new jobs. Moltó emphasized that the SEM continues to play a vital role in Panama’s efforts to diversify its economy and enhance its competitiveness on the global stage.
The SEM is beautiful to multinational companies due to its tax incentives, simplified regulatory processes, and access to Panama’s highly skilled workforce. Companies in high-tech sectors, including semiconductor production, are increasingly drawn to Panama under this regime, benefiting from the country’s strategic location, stable economy, and modern infrastructure. According to Moltó, “Panama remains a highly attractive hub for foreign investment, particularly in emerging sectors such as technology, semiconductors, and logistics.”
In addition to the SEM, Panama offers other favorable investment regimes, including the free trade zones, which saw considerable investment in 2024. These zones attracted $163 million in investments, further solidifying Panama’s position as a key destination for international business.
Simplification of Procedures and Bureaucratic Reduction
A major initiative under the current government has been streamlining business processes and reducing bureaucratic inefficiencies. Moltó discussed the Ministry of Commerce and Industries’ ongoing work with the National Authority for Government Innovation (AIG) to implement digital platforms that allow businesses to communicate directly with government agencies, reducing delays and unnecessary administrative hurdles.
The goal is to create a more business-friendly environment, encouraging more foreign investment. Moltó noted that the government is focused on making it easier for investors to navigate the regulatory landscape in Panama, which could ultimately enhance the country’s appeal as a destination for multinational enterprises under the SEM. By fostering a more efficient regulatory environment, Panama hopes to position itself as the regional leader in attracting businesses looking to expand into Latin America.
The Future of Panama as an Air and Logistics Hub
Panama’s future as a significant logistics and air transport hub is also a central theme of Moltó’s economic vision. The country’s vast land availability, strategic location, and infrastructure assets, such as the Panama Canal and Tocumen International Airport, make it a prime candidate for becoming a critical node in the global supply chain. With continued investment in infrastructure and air transport capabilities, Panama’s major logistics hub role will likely grow in the coming years.
Moltó expressed optimism about the country’s potential to attract major international air transport companies. “The airport director is doing a great job, and in the coming weeks, we will participate in an event with major airlines. Our mission is to attract them to Panama to generate jobs,” he said. By expanding its role as an international air hub, Panama aims to create thousands of new jobs while strengthening its position as a key logistics and trade center for global and regional commerce.
Conclusion
In conclusion, Panama’s economic strategy is centered around leveraging its strategic location, robust infrastructure, and business-friendly regimes like the Special Regime for Multinational Enterprises in Panama. The SEM continues to attract foreign investment, especially in sectors like technology and logistics, creating new jobs and further diversifying the economy. Panama’s inclusion in MERCOSUR, its economic reactivation initiatives, and ongoing improvements in business processes underscore its commitment to becoming a leading hub for multinational companies in Latin America. Through these efforts, Panama positions itself as a key player in the global economy, offering a dynamic and attractive environment for business investment.