The Republic of Panama, with an area of approximately 29,700 square miles (76,900 square kilometers), located between Costa Rica and Colombia, forms the narrowest and lowest portion of the Isthmus that links North and South America. Panama is shaped like an elongated letter "S", which extends west to east some 420 miles (676 kms), the country has a width that varies between 31 and 115 miles (50 and 185 kms) and has a coastline of 490 miles (788 kms) on the Atlantic Ocean and 870 miles (1,400 kms) on the Pacific Ocean. 

The Canada, which joins the Atlantic and the Pacific Oceans, is about 50 miles (80 kms) long. Because of the lateral nature of its extension and its curved contour, directions are often surprising. A transit of the Canal from the Pacific to the Atlantic involves traveling not to the East but to the North-West; in Panama City the sun is seen to rise out of the Pacific.

Communication

Airlines operating through the International Airport, located approximately 17 miles from Panama City, provide service to all major cities in North, Central and South America and Europe. There is also scheduled air service between certain cities and towns in Panama.

Cristobel, Balboa and certain other ports in the country have facilities for trans-shipping cargo and for accommodating regular ocean-going freighters and passenger ships.

International telephone, telex, fax and other telecommunications services are excellent.

Courier services are available (including DHL).

Population

The population of Panama is approximately 2.3 million, about 52 percent of which is urban.

Language

Spanish is the official language, but many of the people in Panama City and Colon speak English.

Political Structure

The Isthmus of Panama was discovered in 1501 by Rodrigo de Bastidas and Vasco Nunez de Balboa, who had a leading part in the establishment of Santa Maria La Antigua del Darien in 1510, the first permanent settlement in the mainland of the Americas. In 1513, Balboa led an expedition, in Panama, that discovered the Pacific Ocean.

Panama City was founded by Pedor Arias Davila on 15 August 1519, almost a hundred years before Jamestown, the first permanent English settlement in North America was founded. Panama was a Spanish colony until 1821 when it became part of the Gran Colombia of Simon Bolivar. In 1903, Panama broke its alliance with Colombia and became an independent republic.

The executive branch of the Government is at present composed of a President and two Vice-Presidents, elected for a five year term in 1989 by direct election.

Legal System

The legal system is essentially based on Civil Law. The basic statutes are the Constitution, the Civil Code and the Commercial Code.

Taxation

Panamanian tax is restricted to Panama sources so that no corporation is taxed on income arising outside Panama. Thus to be free of Panamanian taxation the company merely has to have no Panamanian income.