Imagen panorámica de un tren futurista de alta velocidad con acentos en azul y dorado cruzando un puente moderno en Panamá. Al fondo, el horizonte de la ciudad se fusiona con gráficos financieros y elementos de la bandera de la UE, proyectando un futuro de inversión y asociación.

Panama and the European Union: Million-Dollar Investments, Fiscal Challenges, and Opportunities in 2025

In the dynamic global scenario, Panama continues to consolidate its position as a key player in international trade and finance. Its strategic location, dollarized economy, and constant growth make it an attractive destination for investment and for those seeking to establish their tax residency in Panama. Recently, the European Union’s (EU) interest in strengthening its economic presence in the country has made headlines, marking a fascinating duality: on one hand, a robust financial commitment, and on the other, Panama’s persistence on certain international lists. Understanding this complex relationship is fundamental for any entrepreneur or investor considering the opportunities that Panama offers.

The European Union’s Strategic Vision in Panama

The visit of the European Investment Bank (EIB) President, Nadia Calviño, to Panama, underscores the growing importance of this country for the European bloc. In a turbulent global economic environment, Panama emerges as a pillar of stability and a crucial strategic partner for the European Union.

The European Investment Bank (EIB) Makes a Strong Bet on Panama

The EIB’s decision to open a regional headquarters in Panama to serve the Latin American market is not trivial. It is a clear indicator of confidence in the country as a “good economic example and a logistical benchmark.” This strategic measure, announced by Calviño, reinforces Panama’s role as a regional hub. During her visit, it was highlighted:

  • $300 Million in Financing: Allocated to the Naturgy company to boost the national electricity grid and improve service for citizens.
  • Economic Achievements: Calviño praised the country’s resilience and economic development, reaffirming the EU’s interest in strengthening its presence in Panama.
  • Regional Benchmark: Panama’s selection as the EIB’s operational center for Latin America underscores its status as a leader in the region.

Mega-Projects and Investments Transforming the Country

The financial commitment of the European Union in Panama translates into support for large-scale infrastructure projects, essential for the country’s development and modernization. These projects not only benefit citizens but also create a more favorable environment for foreign investment and business growth. Among the mega-projects and investment areas mentioned, the following stand out:

  • Panama-David Train: An ambitious project seeking to improve connectivity and transportation throughout the country.
  • Electrical Interconnection with Colombia: Strengthening regional energy security and Panama’s electrical infrastructure.
  • Key Sectors: Projects in drinking water, transport, and energy, fundamental for social welfare and sustainable development.
  • Historic Investment: President José Raúl Mulino announced a budget of $11 billion for investments in 2026, focused on roads, production paths, bridges, and the rescue of social works such as hospitals.
  • Panama Metro Line 3: A crucial investment that will improve the quality of life for over 400,000 people.
  • Water and Waste Management: Government priorities, essential for public health and the environment.

“The key support that the EIB provided, along with other multilateral entities, to the Panama Canal expansion project, during a global financial crisis, demonstrates not only confidence in this country but also the strong ties and relationship between the European Union and Panama.” – Felipe Chapman, Minister of Economy and Finance.

Overcoming Challenges: Panama’s Commitment to Transparency

Despite the strong investment commitment of the European Union in Panama, the country still faces the challenge of being removed from certain international lists, which generates skepticism in some sectors. However, Panama’s significant progress in transparency and regulatory compliance is worth mentioning.

A Step Forward: Out of the FATF and AML/CFT Lists

A crucial achievement for Panama in 2025 has been its removal from the Financial Action Task Force (FATF) gray list in July, and subsequently from the EU’s discriminatory list of high-risk countries for its anti-money laundering and counter-terrorist financing regime. This success was described by Nadia Calviño as “a very important and powerful message to the international community.” This milestone demonstrates the country’s commitment and effective efforts to adapt to global standards in the prevention of financial crimes.

Pending Challenges: EU’s Tax and Fishing Lists

Currently, Panama remains on the EU’s “blacklist” of non-cooperative tax jurisdictions (Annex I) and on the “yellow” fishing list for combating illegal, unreported, and unregulated (IUU) fishing. The Ambassador of the European Union in Panama, Izabela Matusz, has emphasized constructive dialogue and progress, but also the need to comply with specific technical criteria.

The Tax List (Annex I)

To be removed from the EU’s tax list, Panama must meet two fundamental criteria:

  • Satisfactory OECD Rating: Obtain a technical review and a satisfactory rating in information exchange with the Organisation for Economic Co-operation and Development (OECD). The initiative for this review must come from Panama.
  • Adjustment of the Tax Regime: Modify its profit system and territorial tax regime to “avoid double non-taxation,” aligning with standards of transparency and economic substance. This directly impacts tax implications in Panama for foreigners and residents.

“The message is very clear: the ball is now in Panama’s court, we are making good progress, but there is still work and a path ahead.” – Nadia Calviño, EIB President.

The review of these lists by the European Union is carried out twice a year (February and October), and the decision depends on the effective fulfillment of these criteria. The EU Council updated its list on October 10, 2025, keeping Panama on it pending these reforms. You can consult the official EU list (here) for more information.

The Yellow Fishing List (IUU)

Regarding the fishing list, Panama also has an action plan agreed upon with the European Commission’s Directorate-General for Maritime Affairs and Fisheries and is working on the technical aspects. An audit from Brussels is expected to review compliance, although a specific date for 2025 seems unlikely. Obtaining the “green card” is crucial to comply with the “Green Deal” in agricultural exports.

Implications for International Investors and Residents

The complex relationship between Panama and the European Union, marked by investment flows and transparency challenges, sends a clear message to the international community. Panama is a country with a robust economy, a global logistics center, and a strong commitment to its development. Efforts to align with international standards, although still ongoing, demonstrate a positive direction and a desire to be a reliable partner.

For entrepreneurs and investors looking to establish a company in Panama or relocate their tax residency to Panama, this situation represents an opportunity. European investment in mega-projects, economic stability, and openness to international trade are attractive factors. At the same time, the process of compliance with EU lists indicates an evolution towards greater transparency and institutional solidity, which in the long term can generate greater confidence and legal certainty for investors.

Conclusion: A Future of Opportunities and Commitment for Panama

The relationship between Panama and the European Union is a testament to the duality that often characterizes developing nations: tremendous economic and strategic potential, combined with the need to adapt their regulatory frameworks to global expectations. Million-dollar investments and infrastructure plans in Panama demonstrate its undeniable appeal as a business center and living destination. Simultaneously, the path towards full transparency and compliance with international standards is an ongoing process that the country is addressing with determination. For those seeking a new horizon for their residency or investments, Panama offers a dynamic and constantly evolving environment, full of opportunities.

Are you considering Panama for your tax residency or to expand your business?
At Panamaway.com, we are experts in guiding international entrepreneurs and investors through the entire process of settling in this vibrant country. From tax residency in Panama to company formation and understanding the legal framework, we are here to advise you.

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