This was stated in an interview with Efe by the Vice Minister of Foreign Trade, Juan Carlos Sosa, and announced that the US Government is helping to promote Panama "as a safe and quality destination" to attract manufacturing companies.

The economic reactivation has to come hand in hand with foreign capital. It will be a large part of this recovery, we will attract foreign investment so that the local economy reactivates, said Sosa.

After almost a year of pandemic, Panama is trying to activate its ailing economy by gradually reactivating businesses and lifting severe mobility restrictions, which, according to business sectors, hinder a true recovery.

Despite the fact that the World Bank and the Economic Commission for Latin America and the Caribbean (ECLAC) place the expansion of the Panamanian gross domestic product (GDP) at 5.1% and 5.5%, respectively, this year, there is a fall calculated by the first at 8.1% in 2020, a more optimistic figure than those managed in the country of between -9% and -14%.

However, the numbers that make clear the impact of the pandemic in Panama, with a GDP collapse of 20.4% until September and unemployment that climbed to 18.5% – the highest rate in 20 years – in last October.

MANUFACTURING AND RESIDENCE COMPANIES FOR QUALIFIED INVESTORS

Last August, in one of the most critical points of the pandemic, Parliament approved a regulation that seeks to attract multinational manufacturing companies under the name of "Special Regime for the Establishment and Operation of Multinational Companies for the Provision of Services Related to Manufacturing (EMMA)".

This measure allows multinationals to develop and carry out product manufacturing, product packaging services, machinery and equipment in different parts of the country.

Thus, an attempt is being made to make "Panama a competitive country in terms of manufacturing", and "one of the initiatives is being carried out with the US Government," added the deputy minister.

"We are talking and making an alliance (with the United States) to help us promote Panama as a safe and quality destination in operations that consist of attracting these manufacturing companies," he explained.

Sosa specified that "basically it is to lower the cost and time of freight to America. For example, bring merchandise from Asia to America and reduce the time in which the products reach their final markets."

Just three months later, in October, the Panamanian government created the "permanent residence program for economic reasons for qualified investors" to attract high net worth foreign investors and boost different sectors of the Panamanian economy such as real estate and construction, among those hardest hit by the pandemic.

They must invest a minimum of $ 300,000 in real estate during the first 24 months of the rule, and after this time, the amount rises to $ 500,000; buy papers on the Panama Stock Exchange for a minimum amount of $ 500,000 or bank time deposits for $ 750,000 forward.

In return, the Panamanian State streamlines immigration procedures "expeditiously" to acquire residency in the country.

"We are already promoting it as a package: reserve ownership while offering this residence to qualified investors," he said.

IMPROVED TAX BENEFITS FOR FILM PRODUCERS

Panama has already been the "set" of series and films from large international production companies and had certain tax incentives that were "high and limited the number of productions that could qualify for this benefit."

The recent "Culture Law", the most advanced in America, according to the Panamanian authorities, reformed this tax benefit: "Before, 15% of that expense was returned to all these companies that made investments in Panama from an expense of 3 million dollars, now that reimbursement has been raised to 25% and the limit has been lowered to 500,000," explained Sosa.

"This has been very well seen by the industry, even last year we grew considerably an investment of 6.7 million, versus 1.6 in 2019. We had some very important productions, one specifically from Warner Bros in Panama City and Colón," the Caribbean province with a high tourist interest but with a high crime rate, he added.

As the vice minister told Efe, they are trying to attract "location managers", because according to "curfews and quarantines are made more flexible," he has scheduled "two trips to bring those markets to Panama", although "there are already some projects underway, like reality shows, documentaries and movies".

2020, A "COMPLICATED" YEAR BUT WITH SOME "POSITIVE EFFECTS"

2020 was a complicated year, but there are positive effects: we grew in exports, when the contraction in Latin America was 20% on average, the same happens with multinational companies, which increased investments versus 2019, said the vice Minister.

Regarding exports, Panama obtained "very good results", because "until October a growth of 17.4% rose versus the previous year, in food it was 2% and exports were 1.45 billion dollars".

"We believe that we will close the year in a positive way. We envisioned sustained growth of 8 or 9% for 2020. They are considering attracting value-added manufacturing companies for agricultural products," he added.

Sosa assured that they are already in "talks with groups in Europe", specifically "a company" wants to set up a fruit processing plant that would give local products an added value that it does not have now. "

All this gave time "to create new regimes and tools that make Panama a more competitive country than it was before the pre-pandemic."