Panama has the ambition of becoming an e-commerce hub for the Central American region and it is beginning to make progress towards this goal, with its internet user base increasing monthly. One of the major opportunities for a business looking to Panama is the Technopark. The Government has established the City of Knowledge Technopark in the former Ft. Clayton US Military base. The Technopark is a combination of technical facilities, offices, and commercial space. The Government supplied 20 hectares of land with complete infrastructures and buildings worth an estimated $50m for the project. The Technopark project was unveiled in August, 2002. For ecommerce, this park means that the business could have its e-commerce and payment transactions handled out of Panama and its customers elsewhere in the world. This would allow the business to take advantage of some of the many incentives Panama has to offer.

Panama's communications systems and infrastructure are on par with other countries of the world such as the USA and the United Kingdom. The telecommunications market was privatized in 1997, and in 2003 it was de-regulated. Although some of the changes that these two acts brought weren't necessarily productive, many of changes have been beneficial to both individuals and businesses. The telecommunications infrastructure has also been greatly enhanced. As a result telecommunication companies are investing in the installation of Network Operation Centers in Panama. These centers take advantage of the geographical location and also the abundant supply of submarine fiber optic which makes interconnection to the world possible. This gives Panama the best access to multiple high-bandwidth continental fiber optic networks located across the planet. All of this combined with the extremely low risk of natural disasters gives Panama sector security and reliability of service. These attributes give Panama a great competitive advantage over other locations.

Investing in Panama is a great opportunity because it is easy to access from almost anywhere, due to its central location in the middle of the North America. Its closeness to large cities in the US and Europe makes it cost effective to bring in specialist's knowledge for installation and maintenance. Living conditions in Panama are very comparable to the US, but the cost of living is one-half. This makes it cheaper for business owners or their employees to live closer to the business.

Foreign investors also find The Republic of Panama particularly favorable for its tax benefits, mostly those referring to income tax. Income tax is levied on all revenues produced within Panama, with some exceptions. These laws are very influential on the Republic, making Panama a hub for international business operations. For ecommerce, this is very significant for companies deciding where to locate themselves for future tax applications.

References:

"Investing in Panama." Internet and ecommerce. Token Studio.

25 Oct. 2008 <http://businesspanama.com>.

"Why Panama?" Panama Legal Center. 27th Oct. 2008 <http://www.panamalegalcenter.com/whypanama.htm>

"E-Commerce." Panama. 27th Oct. 2008 <http://www.lowtax.net/lowtax/html/jpaecom.html>

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