The Republic of Panama is the southernmost country in North and Central America as well as the northernmost country of South America. This Isthmus is also amongst the best destinations in the world for individuals looking for serious financial privacy and minimal taxation, both corporate and personal. Panama’s location at the center of dynamic Latin American economies makes it a natural base for regional and global business operations. Panama’s economic, financial, and political infrastructure is very advanced compared to most of its Central American neighbors. For instance, since 2015, the annual inflation in Panama has been below the universal benchmark of 2.0%. Likewise, Panama has a strategic trade advantage and source of national income: the Canal. According to the Panama Canal Authority, in 2001 it generated US$630 million in total revenues, the majority of which is destined for state coffers as well as maintenance and expansion of services within the Canal.
In Panama, the territory formerly known as the Canal Zone was owned and administered by the United States starting in 1903 until it was handed over to the Panamanian government in 1999. In fact, US Senator John S. McCain was born in the US-administered Panama Canal Zone. Currently, there are thousands of acres of land from former military installations, which represent prized real estate with an estimated value of US$4 billion. Admittedly, the distribution, sale, and privatization of the former US territory in Panama has been slow. Nevertheless, much of it has great development potential, including several airports and seaports as well as buildings and key infrastructure.
History and Strategic Characteristics of the Isthmus
Today, Panama has a total population of 3.8 million citizens with a median age of 29 years. In terms of trade, in 2015, Panama imported US$27.9 billion worth of goods and exported US$4.8 billion, resulting in a trade deficit of US$23.1 billion. Furthermore, that same year, Panama’s main export, representing 15.6% or US$741 million of the country’s total, were passenger and cargo ships. Similarly, the country’s main import, representing 26% or US$7.3 billion of all international purchases, were also passenger and cargo ships. Simultaneously, Panama has had a standing Free Trade Agreement (FTA) with the United States since 2012 and the country’s main trade partners are the United States, South Korea, Ecuador, Guatemala, Costa Rica, and China.
Lastly, in terms of weather, Panama is a tropical country, whose dry season runs from December to April and its rainy season from May until November. Along the 2.490 kilometers of coastal region, the country’s average daytime temperature is 32°C, which cools down to an average of 21°C at night. Meanwhile, Panama’s interior is somewhat cooler depending on the altitude. Similarly, Panama is the southernmost country of the Atlantic and Caribbean hurricane region, which means that tropical storms are rare in the country.
These key characteristics have drawn Farmfolio’s CEO J. Dax Cooke to consider offering a new project for investors to capitalize on the uniqueness of Panama’s agribusiness sector.