Jose Pacheco Tejeira Viceminister of Foreign Trade Ministry of Trade and Industry Panama
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PANAMA: Building a Global Business Platform
Jose Pacheco TejeiraViceminister of Foreign TradeMinistry of Trade and IndustryPanama
PANAMA: Building a Global Business Platform
Strategic Geographical Position
Connectivity through land, sea and air
Open Service Dollarized Economy
International Financial Center
World Class logistic Platform
Ideal Site for doing business
PANAMA PROFILE
PANAMA: Building a Global Business Platform
• GDP – Real growth rate (%):- Year 2010: 7.5- Year 2011: 10.6- March 2012: 10.6
• GDP per cápita: US$8,622 (2011)• GDP composition by sector (%):
- Agriculture: 4.1 - Industry: 16.7- Services: 79.2
• Inflation rate (%): 5.9 (2011)• Unemployment rate (%): 4.6 (March 2012)• Population: 3.5 millons• Life expectancy at birth: 77.9 years
- Male: 75.2 years- Female: 80.9 years
• Total area: 75,517 Km2
PANAMA: Building a Global Business Platform
Panama Trade PartnersPanama has pursued a policy of liberalization and free trade
USA
South Korea
EFTA (European Free Trade
Association,Iceland – Liechtenstein –
Norway - Switzerland)
SINGAPORE
ROC (Taiwan)
PERUEnforcedSigned (under implementation)Negotiating (4 agreements with 7 countries) and Integration process with SIECA (Central America)
Central AmericaCosta Rica, El Salvador Honduras,
Guatemala, Nicaragua
CANADAADA Association
Agreement between EU and Central
America (27 countries)
CHILE
RANKING OF IMPORTS BY COUNTRY
PANAMA: Building a Global Business Platform
No. PAIS IMP 1998 %
1 UNITED STATES 1,351.0 39.5%3 JAPAN 308.4 9.0%4 MEXICO 164.8 4.8%6 COSTA RICA 101.7 3.0%8 COREA 91.3 2.7%9 COLOMBIA 64.3 1.9%10 GUATEMALA 55.7 1.6%11 GERMANY 45.4 1.3%12 SPAIN 44.7 1.3%13 UNITED KINGDOM 40.3 1.2%15 FRANCE 32.2 0.9%16 TAIWAN 30.8 0.9%17 BRAZIL 27.8 0.8%18 CANADA 27.6 0.8%21 EL SALVADOR 23.8 0.7%24 CHILE 19.4 0.6%25 PERU 18.3 0.5%27 CHINA 12.7 0.4%29 HONDURAS 12.3 0.4%55 NICARAGUA 1.7 0.0%57 SINGAPORE 1.2 0.0%
No. PAIS IMP 2007 %1 UNITED STATES 2,079.6 30.3%
3 CURAZAO ISLAMD 489.2 7.1%
5 CHINA 358.7 5.2%6 JAPAN 328.9 4.8%7 COSTA RICA 326.2 4.7%8 COREA 267.7 3.9%9 MEXICO 212.0 3.1%
10 COLOMBIA 192.1 2.8%11 BRAZIL 140.7 2.0%12 GUATEMALA 107.4 1.6%13 SPAIN 107.0 1.6%14 GERMANY 87.3 1.3%16 EL SALVADOR 72.3 1.1%17 PERU 69.0 1.0%18 FRANCE 58.2 0.8%20 CANADA 50.6 0.7%23 ITALY 41.6 0.6%24 CHILE 40.8 0.6%26 TAIWAN 32.8 0.5%27 UNITED KINGDOM 32.6 0.5%54 SINGAPORE 3.3 0.1%
No PAIS IMP 2011 %
1 UNITED STATES 2,826.7 24.9%4 CHINA 689.7 6.1%5 COSTA RICA 509.8 4.5%6 COLOMBIA 469.6 4.1%7 MEXICO 445.3 3.9%8 COREA 303.8 2.7%9 SPAIN 294.4 2.6%
10 JAPAN 292.1 2.6%11 BRAZIL 217.4 1.9%12 GUATEMALA 196.5 1.7%13 GERMANY 166.1 1.5%16 EL SALVADOR 103.8 0.9%17 CANADA 86.3 0.8%18 ITALY 86.1 0.8%20 PERU 68.5 0.6%21 CHILE 67.1 0.6%22 FRANCE 52.2 0.5%25 TAIWAN 45.6 0.4%27 UNITED KINGDOM 37.1 0.3%43 NICARAGUA 15.5 0.1%44 SINGAPORE 13.1 0.1%
Ranking includes CFZ and Petroleum Processing Zones
IMPORTS 1998 IMPORTS 2007 IMPORTS 2011 (P)
Investment Grade + Foreign Investment + Sustained Growth
Fuente: FMI (2010).
– 2006: +10.1%– 2007: +12.2%– 2008: +10.7%– 2009: +3.2%
– 2010: +7.5%– 2011p: +7.0%
2005 2006 2007 2008 2009 2010 500.0
1,000.0
1,500.0
2,000.0
2,500.0
3,000.0
2,362.5 US
$ M
illio
ns+33%
BBB Positive
BBB Stable
Baa3 Positive
PANAMA: Building a Global Business Platform
Government Strategic PlanningFocusing on sectors with the greatest potential will generate more than 500,000 new jobs over the next decade.
• The development plan prioritizes the stabilization of public finances
• Panama aims to improve on its Investment Grade credit rating and will ensure that the level of public debt stays below 30% of GDP over the next 10 years.
• Significant investments in the education, health, public safety, and transportation sectors will increase the standard of living and benefit the residents of Panama.
• During the next five years, this investment will be primarily focused on infrastructure development that will generate jobs and stimulate growth on a path towards sustainable development.
Key Growth Drivers(Measured by their impact on incremental GDP
and job creation)
Logistics Tourism
Agriculture Financial Services
Science and Technology
PANAMA: Building a Global Business Platform
The Logistics Environment
PANAMA: Building a Global Business Platform
PORTS
AIRPORTS
PANAMA CANAL
RAILROADCOLON
FREE ZONE
SPECIAL ECONOMIC ZONES
ROADS NETWORK
CUSTOMS
LOGISTICS
CABINET
MAIN TASK Development of a Master Plan to promote Panama as a global logistic hub for world trade.
PANAMA: Building a Global Business Platform
Connectivity Panama dominates the region with more direct connectivity
Tourism Developing a new air logistics networkPanama’s new air connectivity development plan
The plan seeks to further develop air connectivity beyond the Panama City and Colon corridor.
Through the development of 6 new airports and the expansion and remodeling of another 6 existing terminals.
PANAMA: Building a Global Business Platform
The Panama CanalThe main international trade engine • Over 14,000 vessels
transit this waterway each year.
• 300 million tons through more than 120 routes.
• It’s complemented by Panama’s port infrastructure that handles an annual volume of more than 7 million TEUs.
PANAMA: Building a Global Business Platform
•Estimated investment of $5,250 Millions
Cost
13
FUTURE LOCKS
CURRENT LOCKS
Figure 1: Graphical image of the expansion project. PACIFIC OCEAN• The Canal expansion is on schedule and is $413.8 million under budget.
• Completion Year: 2014
PANAMA: Building a Global Business Platform
INFRASTRUCTUREThe Panama Canal Expansion The main international trade engine
SavannahYantian
Kwangyang
Hong Kong
Pusan
SavannahKeelung
WilmingtonPusan
NJ/NY
Rotterdam
Le Havre
Halifax
Felixstowe
Long BeachLos Angeles
Bremerhaven Rotterdam
Kaohsiung
Charleston
Nagoya Thamesport
Oakland
Seattle
Tokyo
Colombo
Shanghai
Yokohama
Newport News
Hakata Manzanillo (Mx)
Rotterdam
Kobe
Osaka Hamburg
Shimizu Port Said
Zeebrugge
Chabang
Tahiti
Auckland
Doniambo
BrisbaneSydney
Melbourne
Tanjung Priok
Singapore
Marseilles
La Spezia
Tilbury
Dunkerque
Qingdao
BuenaventuraGuayaquil
CallaoArica
Coquimbo
San AntonioSan Vicente
Puerto Limón
Iquique
Manta
AntofagastaValparaíso
.
Balboa
Antwerp
Itajai
SavannahBaltimore
New Orleans
ParanaguaSantos
Puerto Cabello
Veracruz ManzanilloColon
Cartagena
La GuairaGuanta
Maracaibo
Everglades
Kingston
Miami
Transit the CanalFeeder services that don´t transit the Canal
Boston
PANAMA: Building a Global Business Platform
Maritime ConnectivityInternational Ports Connected through the Panama Canal every Week
Source : ACP
Infrastructure ProjectsNational Road and Highway Network Improvements
15
• Reorganization of Panama City’s road network: includes new overpasses in 18 intersections in metropolitan area by 2014.
• Expansion of Highways: Corredor Sur will be widened to six lanes, while Corredor Norte will be extended until the Tocumen area .
• In addition, highway segment expansion outside Panama City have been competitively awarded.
The Ministry of Public Works has engaged in a major overhaul of Panama City’s internal road network, as well as the expansion of major national highway segments.
PANAMA: Building a Global Business Platform
Madden – Colon II: US$ 220 Million
Divisa – Chitre: US$ 112.1 Million
La Villa – Las Tablas: US$ 75.7 Million
David – Boquete: US$ 119.8 Million
Arraijan – La Chorrera: US$ 152.6 Million
Total: US$ 680.2 Million
Infrastructure ProjectsNational Road and Highway Network Improvements
PANAMA: Building a Global Business Platform
Integrated transportation systemPublic transportation system serving GPC will integrate the Metro and Metro Bus systems.
• An international bidding process was undertaken to select the operator of the MetroBus system.
• The winner was the Colombian group Fanalca.
• Panama’s MetroBus system will have 1,200 state of the art Volvo and Mercedes-Benz buses operating on 76 routes.
PANAMA: Building a Global Business Platform
ONE STOP SHOP Integrated Information System that allows the investors to easily identify all the instruments that the National Government has available for the Direct Foreign Investment.
CONCIERGE SERVICE in processes of due diligence. PROINVEX is also responsible of coordinating the international commercialization and the promotion of the exports of national products.
PANAMA: Building a Global Business Platform
PROINVEXPanama Trade and Investment Agency The shortest road of investing in Panama
Incentive Laws An attractive legal framework for investment as Multinational Headquarters (SEM)Every year, more multinational companies choose Panama• Judicial stability facilitates
trade and provides investment incentives.
• One of the most competitive legislations in the region.
• Laws specifically aimed at multinational companies complement the incentives offered by special zones.
• No Taxable income (Offshore Operations)
PANAMA: Building a Global Business Platform
Multinational Headquarters (SEM)Every year, more multinational companies choose Panama
PANAMA: Building a Global Business Platform
Special Economic ZoneThe Colon Free Zone The most important free trade zone in the western hemisphere
Operating since 1948. Currently houses over 3,042 operators.
The second largest free trade zone in the World after Hong Kong.
The Colón Free Zone is located a few kilometers from the Panama Canal in the Caribbean sector.
Goal for 2012 is to handle $30 billion in annual trade volume.
PANAMA: Building a Global Business Platform
Synergy
International Technopark
Non-governmental OrganizationsAcademic
Organizations
Florida State University, University of California-
Berkeley, Georgia Tech University
United Nations, Unicef, Red Cross,
World Food Programme
Research & DevelopmentFor Example: Information
Technology, Biomedical, Renewable Energy
PANAMA: Building a Global Business Platform
Special Economic ZoneCity of Knowlegde
1,400 hectare Special
Economic Zone adjacent to the Canal, Railway,
Ports and Panamá City.
Taxation, customs, labor,
immigration and special
business Regime
London & Regional
Panama as master
developer of the project.
Business and Commercial world class center with residential
areas of high level
Target activities will be exempt from taxes in
the Republic of Panama
Law No. 41 of July 2004.
PANAMA: Building a Global Business Platform
Special Economic ZonePanama Pacifico
Special Economic Zones Zones can be established anywhere in the country
PANAMA: Building a Global Business Platform
FISCAL : Tax Exemption No
Value Added Tax and no Income Tax.
MIGRATION: Permanent Resident Visa as Investor,
Special Resident Visas, Scientist Visas , Spouse
and Dependents
LABOR: Workers´s rotation, Negotiable vacation periods.
PANAMA: Building a Global Business Platform
Incentive Laws Film industry Incentives are granted for the development of the movie making and audiovisual industry
Fiscal, customs, labor and migratory incentives are granted to the industry.
Eliminates bureaucratization and guarantee prompt processes for the productions.
BENEFITS FOR THE FOREIGN PRODUCTION Sole “One-Stop-Shop” for the paperwork. Processing of Migratory and Labor Permits for the foreign personnel. Customs: Temporary custody of equipment without guarantee bond. Permits for public locations throughout the entire national territory. Link with producers, technicians, casting agencies and national personnel.
CLOSING FACTS
Panama: Where the World Meets
#1-for Financial Freedom In Latin America.
#1-for Port Facilities in the Western Hemisphere.
#1- in Latin America for Availability of Venture Capital.
#1-for Air Transport Facilities in Latin America.
#2-among Most Competitive Economies in Latin America.
#3-for Business Freedom in Latin America.
#3-in the World for Affordability of Financial Services.
PANAMA: Building a Global Business Platform
PANAMA: Building a Global Business Platform
Jose Pacheco TejeiraViceminister of Foreign TradeMinistry of Trade and IndustryPanama