Last updated in March 2019
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. Panama’s President Juan Carlos Varela visited Germany in October 2016.
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 dollarised 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. German companies are involved in major projects (Panama City Metro, third bridge across the Panama Canal near Colón, copper mines, work to upgrade the country’s second largest city, Colón) as subcontractors of the executing consortiums.
The German-Panamanian Chamber of Commerce and Industry has more than 140 member companies and belongs to the network of German Chambers of Commerce Abroad There are many renowned German companies operating in Panama, some of which use Panama as their regional headquarters.
Bilateral trade in 2017 was worth 436.5 million euros. That same year, German imports from Panama amounted to 43.3 million euros (an increase of 8.6 percent compared to the previous year); German exports to Panama totalled 393.2 million euros (a rise of 2.8 percent compared to 2016), bringing Germany’s trade surplus to 349.8 million euros. In 2017, Panama reached rank 126 for German imports and rank 86 for German exports amongst a total of 239 trading partners.
German direct investment in Panama stood at 765 million euros in 2016, while Panamanian direct investment in Germany totalled ca. 37 million euros that year. An investment protection agreement has been in force since 10 March 1989.
To date, there is no overarching agreement on the avoidance of double taxation. On 27 October 2017, an agreement on the avoidance of double taxation in the aviation and shipping sphere entered into force. Following Panama’s accession to the multilateral OECD tax agreement CRS MCAA “Common Reporting Standard – Multilateral Competent Authority Agreement” in early 2018, there will be an automatic exchange of financial data, including with Germany, from October 2018.
Germany ended bilateral development cooperation with Panama in 2004 on account of the country’s relatively high level of development. However, as a member of the Central American Integration System (SICA), Panama is involved in regional projects, for example in the security and environmental sectors and for the benefit of indigenous peoples. Panama also participates in projects supported by Germany as part of the strategic partnership with the United Nations Economic Commission for Latin America (ECLAC). These focus on sustainable, low-carbon development, energy efficiency and social cohesion. From 2014 to 2018, the Federal Environment Ministry’s International Climate Initiative provided almost 5 million euros to support the protection of wetlands and conservation areas in Panama through the United Nations Development Programme (UNDP)/Global Environment Facility. In addition, Germany supports Panama through the European Union funding made available for regional cooperation with Central America and bilateral cooperation with Panama.
Every year, the German Embassy conducts small-scale social and development-oriented projects. There are many Germans working in the country as part of the Federal Ministry for Economic Cooperation and Development’s “weltwärts” (Worldwards) volunteer programme. The political foundations with regional offices in Costa Rica, the Friedrich-Ebert-Stiftung and the Konrad-Adenauer-Stiftung, work together with partners in Panama. The Friedrich-Ebert-Stiftung also has a local branch in the country.
Culture and education
There is no bilateral cultural agreement between Germany and Panama. However, the DAAD supports further training for academic staff through the academic exchange programme. Co-funded annual scholarships to university lecturers and students in master’s, doctoral and post-doc programmes at Panama’s universities are awarded (approx. 55 scholarships in 2017). In addition, 30 Germans also received support from the DAAD as part of the German-Panamanian exchange programme. Short research stays in Germany can also be funded. The Universities of Frankfurt and Ulm are engaged in successful cooperation with Panama’s David University in the field of biochemistry. There is also a cooperation agreement between the USMA (Universidad Católica Santa Maria La Antigua) and the Neu-Ulm University of Applied Sciences.
The German School in Panama opened in August 2016. The Colegio Nikolaus Kopernikus runs a kindergarten, pre-school and primary school. It currently has 31 children enrolled in the kindergarten, as well as 47 pre-school and 62 primary school pupils. The school offers lessons in three languages (German, English and Spanish). It hopes to be accepted for the Federal Foreign Office programme supporting schools.
German lessons are also available at a private school, and a state school in Panama City has been supported under Germany’s Schools: Partners for the Future initiative (PASCH). German courses are also held at a university, while the Centro Cultural Alemán offers German lessons in conjunction with the Goethe-Institut.
There are no branches of the Goethe-Institut or the DAAD in Panama. However, the German Embassy regularly organises cultural events in Panama in cooperation with the Goethe-Institut in Mexico (Central America Network) and local partners. The DAAD has its regional office in San José, Costa Rica. It works closely with the German Embassy in Panama.
Deutsche Welle is available in German and Spanish in the capital’s cable network (subscription required) though it is not a high-profile channel. Most of the rest of the country has no access to it. There are no German media representatives based in Panama.
This text is intended as a source of basic information. It is regularly updated. No liability can be accepted for the accuracy or completeness of its contents.