Germany has maintained diplomatic relations with Panama since 1951. Panama’s basic democratic order, political stability and consensus with Germany on many international issues as well as its open, dynamic market economy and increasing regional integration form a sound basis for further intensifying the good relations between the two countries.
Among Central American countries, Panama is a main market for German exports and investment. The main advantages offered by Panama as a business destination for German companies are the country’s importance as a highly competitive regional services centre with its canal, ports, aviation hub, special economic areas, banks and insurance companies as well as its investor-friendly legislation and tax benefits. The German-Panamanian Chamber of Commerce and Industry has 108 member companies and belongs to the network of German Chambers of Commerce Abroad. There are many renowned German companies operating in Panama, some of them with Panama as their regional headquarters.
Germany ended bilateral development cooperation with Panama in 2004 on account of the country’s relatively high level of development. GIZ runs a number of projects in the field of renewables/energy efficiency. Panama participates in projects supported by Germany via the Central American Integration System (Sistema de la Integración Centroamericana, SICA) and as part of the strategic partnership with the United Nations Economic Commission for Latin America (ECLAC). These focus inter alia on sustainable, low-carbon development, energy efficiency and social cohesion. From 2014 to 2018, the Federal Environment Ministry’s International Climate Initiative (ICI) provided support for the protection of wetlands and conservation areas in Panama through the United Nations Development Programme (UNDP). In addition, Germany supports Panama through the European Union funding made available for cooperation with the region and with Panama.