| As the world sinks farther into an economic crisis | | | | needed in Panama's banking system to maintain |
| investment in Panama is still doing well. The Colon Free | | | | investment and economic growth. |
| Zone is a prime example of Panama business and | | | | This decision to infuse capital into Panama's local bank |
| investment thriving in the face of global adversity. This | | | | system will help keep credit going for Panama's |
| tax exempt area increased its total business by | | | | investments, including investments of operators in the |
| nineteen percent in 2008. | | | | Zone. |
| The Colon Free Zone | | | | 2009 and Beyond |
| The Colon Free Zone is the world's second largest | | | | An issue for the Colon Free Zone is protectionism. As |
| duty free zone next to Hong Kong. Located in Colon, | | | | other countries move to protect their economies it |
| Panama near the Caribbean end of the Panama | | | | affects the Colon Free Zone. An example is Ecuador |
| Canal it takes advantage of shipping from the | | | | which moved in early 2008 to reduce imports by |
| Americas, Europe and Asia to buy and sell materials | | | | raising tariffs and imposing quoted on imported goods. |
| from the entire world duty free. | | | | In response several exporters in the Colon Free Zone |
| Investment in the Zone started shortly after World | | | | have stopped doing business with Ecuador. However, |
| War II as a distribution point for materials coming in and | | | | officials of the Colon Free Zone are negotiating with |
| out of Latin America. They prospered for years selling | | | | Ecuador in this matter. Ecuador remains the Zone's |
| duty free goods to Latin Americans especially. | | | | biggest trading partner behind Colombia and |
| Changes in 2008 | | | | Venezuela. |
| While the United States was sinking into recession in | | | | Investment in Panama will also benefit from the free |
| 2008 the Colon Free Zone was doing more business. | | | | trade agreements that Panama has completed or is |
| According to figures they did $2.4 billion USD worth of | | | | working on. The countries involved include Canada, the |
| business in November of 2008 which was a fifty | | | | USA, Nicaragua, Guatemala, Costa Rica, Honduras, |
| percent increase over November of 2007. Total | | | | and Singapore. More trade will benefit investment in |
| business for 2008 through the end of November was | | | | and around the Colon Free Zone. |
| $18 billion USD which was a 19% increase over the | | | | Overall the Panama gross domestic product is |
| same period for 2007. | | | | expected to grow between 7% and 7.5% according |
| 2009 Update | | | | to the Ministry of Economy and Finance and 2008 will |
| Despite economic good times in the Colon Free Zone | | | | end with a 9% increase. Although these numbers are |
| no one is blind to the reduction in trade worldwide. The | | | | off from 2007's 11.5% increase in GDP they are |
| problem for importers and exporters in the Colon Free | | | | spectacular compared to those of recession ridden |
| Zone is to import enough goods to satisfy their | | | | economies around the globe. It would appear that |
| customers' needs and at the same time not make | | | | investment in Panama will continue to prosper while the |
| investment in excessive inventory. | | | | world works its way through its economic slump. |
| Another issue is getting credit. Panama announced on | | | | If you have questions regarding investment in Panama, |
| January 21, 2009, that there will be an injection of 1.11 | | | | especially in commercial real estate contact us at |
| billion USD into its banking system. Panama's banking | | | | ABPanama. We have over 23 years experience |
| system is solvent and not in need of a bailout. | | | | managing real estate portfolios and do business |
| However, a three month study of the world's credit | | | | throughout Panama. |
| crisis has convinced Panama that more ready cash is | | | | |