How to Diversify Your Panama Investment Portfolio

Jun 28, 2019 | Investing in Panama

Have you been thinking about investing in Panama? Are you doing your due diligence right now to see if it’s right for you. If either of these are the case, you’ll have lots to consider before diving into the market, and many opportunities to weigh and consider. Panama has an incredibly diverse market, with investment potential in not just the services industry, but also in commodities, real estate, logistics, and even crypto-currencies. If you’re from outside of Panama, you may want to be a bit conservative with your initial investments. That’s OK, and completely within reason and understanding as a foreigner/outsider to the market. However, even if your investments are small, the best way to get a stable, good return is to diversify. Here’s why.

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Panama’s major growth industries

Right now, the strongest industries in Panama continue to be in the services sector. Within this sector, there’s a lot of investment opportunity in financial services, hospitality, hospitality consulting, shipping/trade logistics, and construction management. All of these industries have room for nominal investments as part of larger groups, and all show steady growth availability for the foreseeable future. Even small consulting firms are in high demand in Panama. Panama’s services sector relies heavily on outside consulting, management, and education, which means foreign investment has a greater demand than supply.

Spreading out your investments in this sector between tourism, commercial construction, and financial management allows you be a part of industries that feed off each other, giving you multiple sources of returns that may or may not rely on your actual other investments. In other words, your secondary investment target can benefit from your first, and vice versa.

Agriculture has much more potential than advertised

When you think of Panama, it’s rare that you think of it as an agricultural potential, but that doesn’t mean that on a small scale it isn’t. The agriculture sector makes up for around 20% of Panama’s total workforce, and has a growing demand for domestic production, as imports become less financially reachable by the local consumer market. Products like beer, coffee, and even hydroponic vegetables are in high demand, and seeing a sort of “micro boom” within the Panamanian agricultural market. Again, with imports pricing out many people in Panama, local agriculture has needed to become more versatile, creative, and productive. This presents a huge opportunity for foreign investment, and an even better opportunity to spread/diversify investments throughout various sectors of the agricultural field.

2019 and beyond

Much speculation, as always, goes into the changing of the financial year, and this year is no different in Panama. While 2019 has had a lot of ups and downs so far, the level of uncertainty for the future seems to be calming, albeit slowly. Financial scandals rocked Panama during the last administration, with a bit of a recovery year expected as we move into the new administration, and into 2020. Panama is also quickly becoming a principle investment destination for the Chinese, which means public and private development projects should start to boom again, much like they did during the 2010-2012 period under Martinelli.

The future looks good from where we sit now. If you plan your investments with enough care, and take the time to spread them out wisely, you should see not only steady returns, but steady growth, which is so rare and critical in the LatAm market.

POLS Attorneys Staff Writer

POLS Attorneys Staff Writer

As one of the leading Panama Law Firms, and one of the regions most reliable offshore service providers, POLS Attorneys brings a wide range of professional knowledge to our clients needs. Our staff is made up of professional offshore consultants, Panama attorneys and immigration specialists who are experienced in offshore business, understand international investment and asset protection strategies, and are experts in providing a seamless Panama immigration process.

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