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While driving through the heart of Panama City, the most populous city of Central America's southern most country, it is easy to see that that the capital is flush with investment and expanding at a rapid pace. Construction cranes dot the skyline, lifting building materials high into the sky to erect gleaming new apartment blocks....

While driving through the heart of Panama City, the most populous city of Central America's southern most country, it is easy to see that that the capital is flush with investment and expanding at a rapid pace. Construction cranes dot the skyline, lifting building materials high into the sky to erect gleaming new apartment blocks. Office buildings, housing, and shopping centres have sprung up in Costa del Este, a new urban area a mere five minute drive from the city's centre.

Panama enacted a legislative package in 2007 that sought to encourage multinationals to base their regional headquarters in the country through a series of tax incentives, easement of license requirements, and immigration reform. Modelled after a similar initiative in Singapore, the scheme paid quick dividends. Shortly after passage, Proctor & Gamble consolidated its Latin American operations, moving hundreds of families - in addition to its business operations - to the city. The movement continues to fuel the present real estate boom, market sources claim.

In addition to the four year-old legislative programme, Panama's new president has embarked on an aggressive infrastructure building spree. "The economy has been growing strong because of the investments," one partner says.

Amongst the more notable are a planned metro snaking its way from the city's far-flung suburbs into the overly congested downtown that has started construction at a cost of $1.5 billion. Feasibility studies on a second line are in progress. Additionally, the government has granted bids for a country-wide roadway reorganisation that will aid connectivity and make trucking goods more efficient.

It is nearly impossible to discuss Panama without considering the canal, and the government has plans to expand that too. Expected to be completed by 2014, the massive $5.2 billion project will build new locks, and dig deeper and wider channels. Larger ships will be able to pass through the canal and capacity will be doubled.

Finally, Panama moved onto the OECD "white list" this year. The list highlights jurisdictions which match international standards for tax and banking transparency, and Panama was granted status after signing a double taxation treaty with France. "The country will be able to attract business," one partner says about the categorisation. Panama has sought to shed its "tax haven" tag by aggressively pursuing double taxation treaties, with the country signing eleven last year alone, along with a tax information treaty with the United States.