Market overview

The future appears to be bright for Panama following a difficult year economically in 2020, largely due to the global health emergency. This was in part because...

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The future appears to be bright for Panama following a difficult year economically in 2020, largely due to the global health emergency. This was in part because of the dependency of the economy on sectors heavily affected by the pandemic, such as aviation and tourism, and partly because of the heavy effects of the pandemic itself, with more covid-19 cases per 100,000 inhabitants than anywhere else in Latin America. However, the IMF predicts a strong GDP recovery of 12% in 2021, adding on 5% in 2022, supported by growth in mining and by investments in public infrastructure, among other things.

This is an established market, and law firms listed in this chapter are mostly a quarter of a century old or more, meaning many are firmly woven into the fabric of Panamanian society.

President Laurentino Cortizo, successfully elected in 2019 following a campaign centred on pledges to fight corruption, has since introduced stringent know-your-client and anti-money laundering rules in line with these pledges. The president has also been working on strengthening the country’s trade ties with the US and improving this relationship.

Across the country, law firms promote high ethical standards and reinforce the message that Panama is a good place to do business. Many have spent the past few years updating compliance structures and know-your-client measures in line with new rules, as well as investing in robust cybersecurity systems. Many firms have also shifted their focus to local work, with offshore transactions experiencing a sharp drop.

Traditionally, many companies pick Panama for their regional headquarters, which has created demand for business law firms capable of corporate and finance matters and transactional work. There is a good pool of lawyers capable of catering to these needs. Meanwhile, the Panama Canal expansion project brought significant investment and complex transactions into the country, giving firms plenty of opportunity to deepen their experience of project financing. Most firms in this chapter are involved heavily in cross-border work, as well as in projects centred in and around the Panama Canal. This year also saw complex capital markets work expanding in the country.

An increasing number of Panamanian firms’ counterparts in Central America have included Panama within their regional models. Panamanian firms, however, are busy enough at home not to feel the need to expand into Central America, especially with the introduction of new data protection legislation (also known as Law 81), which obligates entities in Panama to attain user consent prior to processing data. Even so, this does not seem to have precluded many firms from working on companies’ cross-border deals.

Rather than expand to Central America, Panama’s law firms have long looked further afield. Offshore work in the past drove the opening of offices in an array of jurisdictions such as Bermuda, Luxembourg and London, with the latter remaining an important location for those firms servicing Panama’s strong shipping sector.

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