The Panama Canal closed the 2018 fiscal year with a historic tonnage record, an increase of 9.5% over the previous year. This significantly exceeded the original forecasts for 2018. The revenues from the Panama Canal and the national currency, the USD, make the big difference between Panama and most other emerging market countries in terms of a country’s economic stability.

The expansion of the Panama Canal, which was completed in 2016, is paying off. The increase was driven in particular by liquid gas tankers (LNG & LPG), container ships, chemical tankers and vehicle transporters. LNG tankers could hardly use the original Panama Canal due to the draught of the ships. The following overview shows the sub-segments in the time before the extension of the canal (Panamax) and currently (Neopanamax).

62.8 percent of the cargo that crosses the canal comes from the United States or is destined for the United States. The main countries using the interoceanic route were: United States, China, Mexico, Chile and Japan. Panama is benefiting from economic growth in the USA. At the same time, however, Panama would also suffer from an intensified trade war between the USA and China.

The income from the Panama Canal is between USD 2 – 2.5 billion annually, which is a stable and high income for a small country like Panama with 4 million inhabitants. The country’s national debt, measured as a percentage of GDP, is around 39%, partly because of the revenues from the Panama Canal. This is low by international standards (EU 81%, USA 108%, Japan 235%).

The booming Panama Canal is an important component of the economy and promotes prosperity and the growing infrastructure in the country. These are important elements for the attractiveness of the investment location and the real estate in Panama.

FRAPAN-Invest

Klaus Happ’s company “FRAPAN-Invest” advises investors who want to invest in real estate in Panama. Furthermore, Klaus Happ will be happy to advise you personally on the subject of “Plan B in Panama”.

The real estate market in Panama is internationally one of the most interesting for investments. We would like to be your trusted local partner and assist you with the initial purchase. Additionally, we can take care of your real estate in Panama in a sustainable way.

Profitable, safe and beautiful:
Investments in Panama

Two years ago, the extension work on the Panama Canal was completed. Since then, the LNG (Liquid Natural Gas) giant tankers have been able to use the canal. Ships exporting natural gas and oil products from the USA are the fastest growing business for the Panama Canal, as annual revenue from passage fees has increased more than 20 times in the last two years.

For US energy companies, this means time and cost savings of over 30% on their way to their largest customers, the Asians and a large additional source of income for Panama.

LNG transports through the Panama Canal increased to six million tonnes last year and this year, according to Jorge Quijano, the canal’s manager, this figure is expected to almost double. In 2015 these were still at zero.

“It is a booming business that will continue to grow” said Mr. Quijano, “because Panama now handles about 45% of US LNG exports and 46% of LNG exports. These ships together account for about 10% of the canal revenue.

The fuel cost savings are one of the benefits of using the Panama Canal, which reduces shipping time from Asia to the US East Coast by more than 10 days compared to using the Suez Canal. “They consume less fuel but pay high tolls in Panama,” said Peter Sand, chief analyst at Bimco, a global shipping association. “The total cost may be the same, but the transport time saved is very significant.”

Mr. Quijano expects container traffic via the canal to increase by an average of 5% per year over the next few years. The channel also handles about 30% of US grain exports to Asia.

But he also warns of the danger of trade tariffs between the USA, China and Europe.

“We are just one link in the global supply chain (…)” said Mr Quijano. “I am confident that the US and others will approach world trade in a balanced way. World trade is good for everyone. The duties are not good for anyone.”

The booming Panama Canal is an important part of the economy and promotes the country’s prosperity and growing infrastructure. These are important elements for the attractiveness of the investment location and real estate in Panama.

FRAPAN-Invest

Klaus Happ’s company “FRAPAN-Invest” advises investors who want to invest in real estate in Panama. Furthermore, Klaus Happ will be happy to advise you personally on the subject of “Plan B in Panama”.

The real estate market in Panama is internationally one of the most interesting for investments. We would like to be your trusted local partner and assist you with the initial purchase. Additionally, we can take care of your real estate in Panama in a sustainable way.

Profitable, safe and beautiful:
Investments in Panama

About 80% of Panama’s economy is dominated by the service sector and benefits greatly from foreign direct investment. The country continues to develop its economic and political relations in order to bring tourism, capital and companies to Panama. This in turn leads to increased demand for real estate in Panama, both from buyers and tenants.

After Panama established diplomatic relations with China in June last year (Link) and since then has greatly expanded economic relations, Air China has been flying to Panama City twice a week since April 2018. Chinese investors are now arriving directly in Panama (link) due to the first easing of entry requirements for Chinese.

In February, the delegation led by President Varela visited the leader of Dubai. In addition to political and economic representatives, the management of the Dubai sovereign wealth fund were also present at the meeting in Dubai. Key topics were investments from the Arab region in the areas of infrastructure, real estate, trading and energy. Both countries are the logistics and trading centre (Panama as Hub of the Americas) on their respective continents and now want to bundle their geographical and strategic strengths.

In mid-May, the President of Panama, Juan Carlos Varela, met with British Prime Minister Theresa May. It was the first time in history that a Panamanian head of state met a British Prime Minister. The aim of the talks with Theresa May, other ministers, companies (including British Airways) and British investors was to further strengthen and expand economic, political and tourist relations.

After these summits, the Panama delegation continued its trip to Israel to discuss the same topics with Prime Minister Benjamin Netanyahu and economic representatives.

This progress in Panama’s economic and political relations is fundamentally very positive for the real estate market in Panama.

FRAPAN-Invest

Klaus Happ’s company “FRAPAN-Invest” advises investors who want to invest in real estate in Panama. Furthermore, Klaus Happ will be happy to advise you personally on the subject of “Plan B in Panama”.

The real estate market in Panama is internationally one of the most interesting for investments. We would like to be your trusted local partner and assist you with the initial purchase. Additionally, we can take care of your real estate in Panama in a sustainable way.

Profitable, safe and beautiful:
Investments in Panama

Klaus Happ supports with his business consulting for Panama those companies that want to become commercially active or expand their business in Panama. Due to his experience and contacts he supports to find interesting business opportunities and partners in Panama. As a business consultant for Panama he carries out together with a business law firm in Panama City, which is historically very well connected in the country (in business, politics and to the important families of the region).

Panama is the fastest growing country in the western world (GDP growth since 2002 approx. 8% p.a. / according to the IMF for the next four years at approx. 6% p.a.) and has the USD as its national currency. These are two important characteristics of a country in which growth and legal security provide a good basis for commercial activities. In this context, more than 130 multinational corporations have their headquarters for Central and South America in Panama and use the country as a “Hub of the Americas” due to its outstanding geographical location. Panama serves not only as a safe investment location, but also as a starting point for expanding business activities to other Latin American countries.

The following objectives are the goals of the business consulting Panama:

• Diversification of the business portfolio
• Panama as “Hub of the Americas” offers access to all of Latin America
• Participation in economic growth in Panama
• Investment security through Western structure and political stability with USD as currency

Our service

• Advising international companies on their planned business activities in Panama
• Business and delegation trips to Panama to discuss concrete project implementations with Panama’s decision-makers from business and government
• Presentation of interesting projects in Panama before they are put out to tender
• Mediation of potential joint venture partners in Panama
• Legal advice on the establishment of a company and the tendering process
• Networking and lobby work

(Event with ambassador Dr. Guido Spadadfora)

In particular, the following projects and topics in Panama are interesting for companies:

• Infrastructure and Logistic Projects
• Panama Canal Projects (industrial / logistics parks, container port, energy and water projects)
• International Airport Panama City (Planning & Construction of an Airport City, Industrial Park, etc.)
• Smart City & Intelligent Traffic and Parking Solutions
• Renewable Energies
• Recycling, environmental and water systems
• New copper mine
• Tourism

Klaus Happ
Klaus Happ is married to a Panameña, lives in Frankfurt and is in Panama every two months. Until 2017, he worked for 23 years as a capital market specialist at UBS and Dresdner Bank. Since 2017 his real estate company “FRAPAN-Invest, Corp.” has been operating in Panama and he is the Managing Director of the German real estate holding company “arsago Panama”. Since 2017 he has been advising German companies and has travelled to Panama for various delegations and entrepreneurs, including “Bayern International”. Together with the ambassador he was Panama’s representative at the “Central America Day of the German Economy in 2018” (Info-Link) and the same at the “Panama Business Forum in Hamburg 2019” (Info-Link) and in Frankfurt 2019 (Info-Link). Furthermore, he accompanies companies from Panama (e.g. Panama Pacifico) to expand their business in Germany.

Business Consulting Panama: We support you as a professional and experienced partner