Panama has achieved an important milestone. The next challenge is converting that recognition into lasting credibility, stronger institutions, and responsible investment.
On October 9, 2026, the Council of the European Union removed Panama from Annex I of the EU list of non-cooperative jurisdictions for tax purposes. This is an important achievement for the country and one that deserves to be recognized.
According to the Council, Panama addressed concerns relating to its foreign-source income exemption regime and was granted a new review by the OECD Global Forum regarding compliance with international standards for exchanging tax information upon request. Panama has now moved to Annex II—the document used to monitor jurisdictions cooperating with the European Union while completing outstanding commitments—pending the outcome of that review.
This distinction matters. The decision represents meaningful progress, but it should not be interpreted as the end of the process. Instead, it should be viewed as both recognition of the work already accomplished and an incentive to continue strengthening Panama’s legal, regulatory, and institutional framework.
A collective national achievement
This milestone reflects the efforts of the current administration, public officials, regulators, and institutions, as well as years of work by Panama’s private sector.
Recognition is also due to the country’s banks, accountants, lawyers, auditors, compliance officers, corporate-service providers, financial professionals, and business organizations. These groups have had to adapt their procedures, invest in compliance systems, improve internal controls, train their teams, and respond to increasingly demanding international standards.
Their work has not always been visible to the public, but it has been essential.
Improving Panama’s international standing requires more than legislative reform. It also requires the consistent implementation of those laws throughout the financial and professional-services sectors. Policies must be translated into effective due diligence, accurate reporting, reliable beneficial-ownership information, meaningful supervision, and credible enforcement.
The removal of Panama from Annex I therefore represents a collective national accomplishment—not the achievement of any single institution or sector.
Why this decision matters
International classifications influence how countries are perceived by investors, financial institutions, multinational companies, and their professional advisers.
When a jurisdiction appears on a list of non-cooperative or high-risk countries, legitimate businesses may face additional questions, enhanced compliance reviews, longer onboarding procedures, delayed transactions, or reluctance from international counterparties. Even well-managed companies can be affected by the reputational consequences associated with the jurisdiction in which they operate.
Removal from the EU list can help reduce some of that reputational friction. More importantly, it sends a positive signal that Panama is engaging with international institutions and responding to concerns regarding transparency and tax cooperation.
This development follows Panama’s removal in 2025 from the European Union’s separate list of high-risk jurisdictions for anti-money-laundering and counter-terrorist-financing purposes. Although the two lists address different issues, both decisions reflect a broader trajectory of institutional improvement.
Nevertheless, removal from a list does not automatically transform international perceptions. Confidence is built gradually and must be supported by consistent performance.
The work must continue
Panama should celebrate this moment without becoming complacent.
The country must continue improving the quality and consistency of its due-diligence practices, strengthening beneficial-ownership transparency, modernizing regulatory systems, and ensuring effective cooperation among public institutions and private-sector participants.
Particular attention should remain focused on:
- Consistent implementation of customer and investor due-diligence requirements.
- Reliable and accessible beneficial-ownership information.
- Effective supervision based on actual risk.
- Timely exchange of information with international counterparts.
- Appropriate enforcement when legal or regulatory obligations are not met.
- Continuous professional training across the banking, legal, accounting, corporate, and financial-services sectors.
- Greater use of technology to improve compliance, reporting, and institutional coordination.
These measures should not be treated merely as requirements imposed by foreign organizations. Strong due diligence and transparent institutions are essential to protecting Panama’s own economy, businesses, financial system, and international reputation.
Panama’s opportunity in a changing world
The global economic and geopolitical environment is changing rapidly. Companies are reassessing supply chains, regional operations, banking relationships, investment destinations, and access to international markets.
Panama is well positioned to participate in this new landscape.
The country offers a strategic geographic location, the Panama Canal, major ports and logistics infrastructure, extensive air connectivity, a dollarized economy, a sophisticated banking sector, and an established community of legal, accounting, financial, and corporate professionals.
Together, these advantages give Panama the potential to serve as a trusted regional platform for international business, investment, logistics, financial services, and corporate operations.
However, infrastructure and geographic location are no longer enough. Today’s investors also evaluate institutional reliability, regulatory certainty, transparency, compliance standards, political stability, and the ability to conduct business efficiently.
Panama must therefore combine its traditional advantages with a renewed commitment to international best practices.
The objective should not simply be to attract more investment. It should be to attract responsible, sustainable, and productive investment from individuals and organizations that value Panama’s position, professional capabilities, and commitment to legitimate business.
Turning recognition into lasting credibility
Panama now has an opportunity to tell a stronger international story—one based not only on its geographic and financial advantages, but also on measurable institutional progress.
That story must be supported by action.
Government institutions must continue implementing reforms consistently. Regulators must provide effective oversight. Banks and professional-service providers must maintain rigorous standards. Business leaders must promote a culture in which compliance is understood as part of competitiveness rather than as an administrative burden.
Panama should aspire to be recognized as a jurisdiction that combines opportunity with responsibility: a country that welcomes international investors while protecting the integrity of its financial and corporate systems.
Removal from the EU list is an important step in that direction. It deserves congratulations, but it also creates a responsibility to preserve the progress that made the decision possible.
Today, Panama can recognize how far it has come.
Tomorrow, the work of building confidence, strengthening institutions, and positioning the country for the next generation of international investment must continue.
Official sources: Council of the European Union—October 2026 update and European Commission—2025 AML/CFT update.
