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2. Favorable Foreign
Investment Legislation and Agreements in Panama
The Constitution of the Republic of Panama grants equal legal rights to nationals and foreigners, with certain exceptions:
- Hiring of foreign aliens is not allowed when skilled nationals are available. Foreign aliens as well as juridical or local entities controlled by foreign aliens or entities are not allowed to acquire land within ten (10) kilometers from the borders including certain islands.
- Retail business is reserved for nationals only; whereas there is no restriction on wholesale business.
- In addition, Panama has subscribed investment protection agreements with various countries. Presently in effect are agreements with Switzerland (Law No.4 of October 25, 1983), the United States of America (Law No.12 of October 27, 1983), Germany (Law No.16 of December 12, 1985), the Republic of China (Law No.13 of July 6, 1992), Great Britain (Law No. 3 of October 25, 1983), France (Law No.2 of October 25, 1983), Canada (Law 39 of November 14, 1997), Chile (Law 19 of March 17, 1998), Argentina (Law 2 of January 13, 1997), Spain (Law 43 of July 1, 1998), Cuba (Law 5 of May 3, 1999), Uruguay (Law 81 of November 23, 1998), Czech Republic (Law 11 of June 14, 2000), and OPIC-USA (Law 27 of July 7, 2000); and subscribed but not yet in effect with The Netherlands.
- Panama has signed Free
Trade Agreements with El Salvador and Taiwan, and is currently
negotiating with Nicaragua, Chili, Mexico, Costa Rica, Columbia and
the Dominican Republic, and has initiated conversations to that end
with the United States and Singapore. In addition, to its active
participation in the Free Trade Area of the Americas and the World
Trade Organization.
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