Panama Towards the OECD and Mercosur: What Does It Mean for Investors and Business Owners in 2025?
Panama’s economic and political landscape is constantly evolving, presenting new dynamics for those who consider the country a strategic destination for investment, business expansion, or relocating their tax residency. In 2025, two fundamental developments are at the center of the national debate: the potential accession to the Organization for Economic Co-operation and Development (OECD) and a strengthening of ties with the Southern Common Market (Mercosur). These initiatives are not mere diplomatic procedures; they represent a profound transformation with significant implications for international investors and business owners.
Understanding the scope of these integrations is crucial for making informed decisions. How will these movements translate into a more robust, transparent, and opportunity-rich business environment? Join us in this detailed analysis of the expectations and challenges that Panama’s convergence with the OECD and Mercosur portends for the economic future of the Isthmus.
Panama and the OECD: A Commitment to Transparency and Governance
Panama’s aspiration to join the OECD is a clear indicator of its commitment to international standards of transparency, institutionality, and good governance. The Panamanian Association of Business Executives (Apede) has emphasized that this step is a “transcendental state decision” that goes beyond a diplomatic achievement, demanding structural reforms and collective responsibility to raise the standard of living in Panama.
«Joining the OECD is not a diplomatic aspiration; it is a profound transformation that implies reviewing how we plan, how we spend, how we regulate, and how we account.»
— Giulia De Sanctis, President of Apede
For Panama, accession to the OECD implies the adoption and strengthening of public management tools that prioritize efficiency and accountability. This includes Regulatory Impact Analysis, ex-post policy evaluation, and Results-Based Budgeting. These measures, crucial for OECD member countries, seek to ensure that public policies are effective and that resources are used optimally, a vital aspect for the confidence of any international investor.
Challenges and Progress on the Road to the OECD
Despite notable progress, such as exiting the FATF Grey List in 2023 and being removed from the European high-risk list in 2025, Panama faces structural challenges. Public debt, a fragile institutional environment, and growing public distrust are points that must be addressed with determination. However, the aspiration to join the OECD itself can act as a “driver of reforms,” promoting improvements in the quality of public policies and strengthening democratic institutions.
The real challenge is not just achieving membership, but sustaining these advances and translating them into effective and lasting policies. Belonging to the OECD means demonstrating unwavering respect for the Rule of Law, institutional independence, and the implementation of evidence-based policies. For investors and business owners, this translates into a more predictable, secure, and transparent business environment, which reduces risks and fosters long-term investment.
These changes have a direct connection with Panama’s fiscal framework. The adoption of the OECD Multilateral Instrument against tax evasion is already an important step. To understand how these reforms might affect your obligations, we invite you to review our guide on Taxes in Panama for Expats and Tax Residents.
Panama’s commitment to the OECD is a powerful signal to the international community, consolidating the country’s reputation as a responsible actor in the global economic arena. More information about the OECD can be found on its official website.
The Strategic Alliance with Mercosur: Positioning Panama as a Regional Hub
Parallel to its rapprochement with the OECD, Panama is also exploring opportunities to strengthen its relationship with the Southern Common Market (Mercosur), an alliance that promises to transform the region’s commercial dynamics. The Chamber of Commerce, Industries, and Agriculture of Panama (Cciap) envisions Panama as a “great port” for Mercosur countries, facilitating their access to new global markets.
«Panama does not compete with Mercosur; it complements it. We offer agile access to strategic markets, global connectivity, and a stable, modern, and reliable business environment.»
— Juan Arias, President of Cciap
Panama’s geostrategic position, with the interoceanic Canal, the Colón Free Zone, and an extensive network of ports and airports, along with special regimes that encourage investment, makes it an ideal partner for the Mercosur bloc to expand its commercial presence. This synergy is an unparalleled window of opportunity for investors and business owners looking to establish a base to operate in Latin America and the Caribbean, using Panama as their logistical and distribution operations center.
Mutual Benefits and Negotiation Challenges
The alliance with Mercosur is strategic and not merely symbolic for Panama. The bloc represents an economy of over 270 million inhabitants, the fifth largest in the world, with trade exchanges with Panama already exceeding US$564 million annually. For business owners, this means an expanded market and new business opportunities, especially for those interested in starting a company in Panama with a regional or global focus.
The path toward deeper integration with Mercosur involves sitting down to negotiate bilateral agreements, building cooperation frameworks, and intelligently and strategically defining the exchange of goods, services, and investments. The Cciap has emphasized the importance of the private sector actively participating in these technical discussions to ensure that each negotiation defends national interests and enhances Panama’s opportunities. This alliance promises more jobs, more opportunities, and a more prosperous future for Panamanians, and by extension, for investors who bet on the country.
Key Implications for Investors and Business Owners in Panama in 2025
The convergence of these two processes—accession to the OECD and the deepening of the relationship with Mercosur—creates a unique environment for international investors and business owners looking at Panama. Below, we highlight the most relevant implications:
- Reinforced Stability and Confidence: Commitment to OECD standards augurs greater transparency, better governance, and a more robust Rule of Law. This translates into greater legal certainty and a reduction in perceived risk for investments, making Panama an even more attractive destination for foreign capital.
- Expanded Market Access: The alliance with Mercosur opens doors to a vast market of 270 million consumers, as well as new opportunities to export from Panama to the bloc and, through Panama, from Mercosur to the world. This is particularly advantageous for logistics, trade, and service companies.
- Improved Regulatory Environment: The reforms required by the OECD will drive greater efficiency and clarity in the Panamanian regulatory framework. This will simplify the processes for starting a company in Panama, obtaining permits, and complying with regulations, directly benefiting business owners.
- Consolidation as a Logistics and Financial Hub: Panama reaffirms its position as a global strategic center. These initiatives enhance its existing infrastructure and connectivity, attracting more investments in key sectors.
- Impact on Tax Residency and Quality of Life: A more dynamic and transparent economic environment, coupled with business opportunities, improves the quality of life and long-term prospects for those who choose Panama for their tax residency. Stability and economic growth are decisive factors in these decisions.
Conclusion: A Promising Future for Investors and Business Owners in Panama
Panama’s path towards accession to the OECD and its strategy of deepening ties with Mercosur mark a period of unprecedented transformation and growth. While both processes entail challenges in terms of internal reforms and strategic negotiations, the opportunities that open up for international investors and business owners are substantial.
A more transparent, efficient, and regionally and globally connected Panama is consolidating its position as a top-tier destination for investment and business development. These strategic moves not only seek to strengthen the Panamanian economy but also to ensure a more predictable and beneficial environment for all stakeholders contributing to its development.
If you are considering relocating your tax residency, establishing a new company, or exploring investment opportunities in this dynamic country, the time is right. At Panamaway.com, we are experts in guiding business owners and investors through the relocation and establishment processes in Panama. Contact us today to receive personalized advice and start planning your future in this global strategic hub.