Barbados and Panama, two dynamic economies strategically positioned in the Caribbean and Central America respectively, are experiencing a burgeoning trade and commerce relationship. This partnership, fuelled by historical ties and a shared vision for economic growth, presents a wealth of opportunities for international investors seeking to capitalize on the unique advantages of both nations.

A History of Collaboration

While formal diplomatic relations between Barbados and Panama were established relatively recently, in 1982, the historical links between the two nations stretch back centuries. Shared experiences as British and Spanish colonies, respectively, laid the groundwork for cultural exchange and, eventually, economic cooperation.

It is important to acknowledge that many labourers who constructed the Panama Canal originated from Barbados and other Caribbean islands. From 1904 to 1916, Barbados provided approximately 19,900 workers, constituting 44.1% of the Caribbean labour force, which totalled 45,107 workers. (Maloney, Gerardo "The Panama Canal and the Antillean Workers"). Consequently, both Panama and its Barbadian residents express pride in this contribution to the project, and the legacy left for subsequent generations as contributors to what is now considered the first natural resource at the region's service.

To provide further historical context, it is important to make known that remittances from Panama sent by that workforce during the early XX century gave way to creating a robust middle-class in Barbados. Additionally, it is worth acknowledging that while many Barbadians returned to their homeland, a significant number remained, enriching the multicultural fabric of Panama.

The establishment of diplomatic missions in both capitals has significantly enhanced our bilateral relations. Barbados established its mission in Panama in 2019, and Panama's recent inauguration of its first embassy in Barbados has further invigorated political diplomacy. There is a mutual desire to strengthen commercial and economic ties, complementing existing cooperation in education and tourism, a key sector for Barbados and a burgeoning industry in Panama.  

Current Status and Mutual Advantages

Today, Barbados and Panama enjoy a strong and growing relationship characterized by increasing bilateral trade and investment flows.  With its renowned Canal and logistics infrastructure, Panama serves as a crucial gateway for Barbadian goods to access Latin American markets. Conversely, Barbados, with its stable political environment, robust financial sector, and skilled workforce, offers an attractive destination for Panamanian businesses seeking to expand their reach into the Caribbean. The mutual advantages are clear.

For Barbados

Access to Panama's extensive logistics network facilitates the efficient movement of goods, reducing transportation costs and enhancing competitiveness in regional markets. Furthermore, Panama's thriving financial sector provides opportunities for Barbadian businesses to access capital and expand their operations. And there are outstanding benefits to doing business in Panama:

  • Attractive tax benefits
  • The Colon Free Trade Zone
  • The Panama Pacifico Free Trade Zone
  • The Panama Canal
  • A Dollarized economy
  • Panama offers some of the most attractive corporate tax benefits globally
  • It is one of the few countries governed by the principle of territoriality, meaning only income generated from operations consumed or improved within Panamanian territory is taxed.

For Panama

Barbados' reputation as a well-regulated and transparent jurisdiction with a strong legal framework provides a secure environment for Panamanian investment. Additionally, Barbados' skilled workforce and focus on innovation offer valuable resources for Panamanian companies seeking to enhance their capabilities. With Copa Airlines’ four weekly flights, Panama has become one of the more important shopping destinations for Barbadians.

Bridging the Caribbean and Latin America

Panama and Barbados are collaboratively establishing a framework to facilitate Caribbean entrepreneurs' exploration of business opportunities within both countries and potential expansion into other Latin American markets. The Barbados Chamber of Commerce, Invest Barbados, and the Barbadian Tourism Marketing Inc., with the collaboration of ProPanama, organized a successful inaugural trade mission to Panama in October 2024, which has generated significant interest among businesses in exploring commercial opportunities in both nations. ProPanama is the Authority for the Attraction of Investments and the Promotion of Exports of Panama, which develops and implements strategies to attract investments and promote exports in Panama.

Opportunities for International Investors

The strengthening ties between Barbados and Panama have created a compelling proposition for international investors. Key opportunities to invest in both countries include:

  • ‍Logistics and Transportation: Investors can capitalize on Panama's strategic location and well-developed infrastructure to establish regional distribution hubs, facilitating trade between the Caribbean, Latin America, and beyond.‍
  • Financial Services: Barbados' robust financial sector, with its strong regulatory framework and tax advantages, provides a fertile ground for investment in banking, reinsurance, biosciences, and fintech.‍
  • Tourism and Hospitality: Barbados and Panama are renowned tourist destinations. Investors can leverage synergies between the two countries to develop innovative tourism products and experiences, attracting visitors from across the globe. There are also opportunities for Panama’s national airline, Copa Airlines, to cooperate with Barbados to access our multiple weekly flights to the UK. ‍
  • Renewable Energy: Both nations are committed to sustainable development. Interested parties can contribute to this goal by supporting renewable energy projects, capitalizing on the abundant solar and wind resources in the region. Panama offers enormous potential in hydro-energy. ‍
  • Technology and Innovation: Barbados' burgeoning tech sector, coupled with Panama's strategic location as a digital hub, presents opportunities for investment in areas such as software development, artificial intelligence, cybersecurity, e-commerce, and digital infrastructure.

The Future of Barbados-Panama Relations

The potential for continued growth in the Barbados-Panama relationship is immense. Several factors point toward a bright future:

  • ‍Increased Air Connectivity: Expanding direct flights between Bridgetown and Panama City will further facilitate trade, tourism, and investment flows. There are currently four weekly flights with prospects of increasing this to a daily flight.  ‍
  • Enhanced Trade Agreements: Negotiating and implementing comprehensive trade agreements will reduce barriers and stimulate bilateral trade. It should be noted that both embassies have already laid the groundwork for a partial-scope trade agreement. ‍
  • Joint Ventures and Partnerships: Encouraging joint ventures and partnerships between Barbadian and Panamanian businesses will foster innovation and create new opportunities in diverse sectors. Barbados has been participating in Panama’s biggest trade fair, ExpoComer, for the past eight years and has already recorded significant breakthroughs in the Panama market. ‍
  • Cultural Exchange: Fostering cultural exchange through dedicated programmes will strengthen interpersonal connections and enhance mutual understanding, thereby establishing a solid foundation for future collaborative endeavours. In recent years, Panama has become the favoured destination for Barbadian secondary schools' Spanish language immersion programmes. Furthermore, the Embassy in Barbados is actively strengthening its ties with the University of the West Indies. The Barbadian government is also exploring the prospect of adopting Spanish as a secondary official language.

In conclusion, the burgeoning trade and commercial relationship between Barbados and Panama presents a significant opportunity for international investors. By capitalizing on the distinctive advantages of each nation, investors can access new markets, diversify their investment portfolios, and contribute to the economic development of both countries. As Barbados and Panama continue to strengthen their bilateral ties, the future holds immense promise for those who seize the opportunities presented by this dynamic partnership.

‍