Its central location on the narrowest isthmus of the American Continent has given Panama its character as a country open to international commerce and to its complementary activities.

The Canal and the interoceanic highway and railway, which join the Pacific and Atlantic oceans on strip of land of 80 kilometers in width, have facilitated the development of certain activities which have turned Panama into an important center for banking activities, insurance and reinsurance facilities, maritime services, free zones, and legal, management and accounting services, among others.

With a monetary system based on the U.S. dollar, free transfer of funds to and from foreign sources, freedom from income taxation on offshore activities and a flexible system for the incorporation and operation of corporations, Panama is from the beginnings of the century a strategically ideal jurisdiction to provide a base for international activities.

Its democratic system of government, its respect for private property and for private foreign investments and for the real independence of the Judicial Branch, are important guaranties for the local and foreign investor. Its economy, based on the open market, follows the modern tendency towards globalization, and has prompted the incorporation of Panama to the World Trade Organization and to negotiate its participation in broader markets through bilateral or multilateral agreements.