Doing Business in Panama

The Republic of Panama is a highly privileged nation because of its geographic-strategic location. Panama is a transit country and a melting pot for different ethnic groups and cultures and a net exporter of merchandise and services. It represents the bridge between North- and South America and between the two big oceans, the Pacific and the Atlantic.

Archaeological and anthropological research points out that Panama has been populated for more than 11,000 years. In the course of time, large migrations passed through the grounds of this country contributing this way to the population of the American continent. Many years before the Europeans discovered the «new world», Panama had already begun to play the role dictated by its geographical location: it served as mandatory passageway for the many civilizations.

In 1501, the Europeans «found» Panama’s coasts where they set the basis for the conquest of America. Panama City was the first European town on the Pacific coast of America; from there, Spaniards organized the conquests of the Incan empire in Peru, respectively.

Already in the 16th century, a first scientific expedition was arranged by Charles V intending to study the possibilities to connect the two oceans in Panama. With Portobelo on the Atlantic coast, the first big fair and exhibition centre of the «new world» was created.

In 1821, Panama declared its independence from Spain. As a result of the liberation fights in its South American colonies, the Spanish empire lost out. Panama’s annexation with Great Colombia was due to the charisma and leadership of Simon Bolivar, liberator and chief of the first government of the group of territories which were forming the nation. But this union did not yield the promised fruit: Panama made several attempts to separate from Colombia but the Colombian army impeded its success.

Since 1876 Ferdinance de Lesseps proposed building an interoceanic canal on Panama but France fails the canal construction. After the US-Spanish war of 1898, the United Stated marked the historical moment of becoming a global power. To accomplish this goal, they needed a waterway in order to better connect the East with the West parts of the country and to move their military fleet between the Atlantic and the Pacific. The most realistic place in Central America to build a canal was Panama. As South Carolina’s Senator Smith said 1912: «We have bought the Canal with our own money and constructed it at our own expense. Itis as much a domestic ditch as the Erie Canal and is essentially a part of our coast line».

Panama became independent from Colombia November 3rd, 1903 and signed the Panama Canal Treaty with the United States containing a perpetual clause (something forbidden in international public Law; therefore, this treaty has been considered an unequal and unfair treaty analogue to the treaties imposed to China by England in the middle of the 19th century). On the basis of this treaty, the US was able to build and control the Panama Canal including five miles of land on each side of the waterway.

After the violent unrests of 1964 resulting in the death of more than 20 Panamanians, the USA realized that negotiations for settling the conflict between both nations were necessary. In 1977, new treaties on the Panama Canal were signed by the Panamanian Leader Omar Torrijos and the US President Jimmy Carter. These treaties provided for a 20 years period to prepare Panama and the human resources of the canal for a complete transfer of the waterway to Panamanian control. On 31st December 1999, the last US troops left the country. For Panamanians, a new chapter of their history began as Panama was to exist for the first time as fully sovereign nation.

Those who have travelled to Central America mention above all one thing attracting their attention: the Panamanian modernism standing out of the more traditional societies of the isthmus. If they had to compare Panama with other countries, they would choose the example of Hong Kong because of the easiness Panamanians adapt themselves to business.

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Morgan & Morgan

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