Panama's political system is a democracy in the form of a presidential republic with a unicameral parliament.

Panama is a stable free-market economy and an emerging business hub. The country is characterized by its:

  • status as an internationally recognized financial services center
  • solid currency system based on the US-dollar
  • highly developed commercial aviation hub (Hub of the Americas), connecting passengers rapidly and frequently to the major cities of North and South America
  • second largest free trade zone in the world and the largest one in the Western Hemisphere (Colon Free Trade Zone)
  • Panama Canal

The Panama Canal connects the Caribbean Sea with the Pacific Ocean and has been a major conduit for global commerce since it commenced operation in 1914. Close to five percent of the world's total sea freight transits the Panama Canal.