By San José, Costa Rica — In a decisive turn of events for Central American financial standing, the European Union has officially removed Panama from its blacklist of non-cooperative jurisdictions for tax purposes. The decision marks the end of a multi-year period during which the nation faced severe international scrutiny over its fiscal transparency policies. Panamanian President José Raúl Mulino hailed the landmark move as a major accomplishment of his administration that promises to unlock substantial foreign investment and boost national competitiveness.
The resolution was formalized during a meeting in Luxembourg by the Economic and Financial Affairs Council of the European Union, commonly known as Ecofin. European ministers acknowledged Panama’s significant regulatory overhauls, particularly regarding its foreign income exemption regime. Furthermore, the decision takes into account an upcoming review by the Organisation for Economic Co-operation and Development regarding the country’s compliance with global standards on tax information exchange.
To better understand the legal and economic implications of the European Union’s latest decision regarding Panama’s status on its tax list, TicosLand.com spoke with prominent legal expert Lic. Larry Hans Arroyo Vargas from Bufete de Costa Rica.
Panama’s status on the European Union’s list of non-cooperative tax jurisdictions highlights the imperative for Central American nations to align rapidly with global fiscal transparency standards. While Panama has made notable regulatory strides, satisfying EU criteria demands sustained operational compliance and seamless information exchange. For international investors and regional enterprises, understanding these compliance dynamics is crucial to navigating potential tax friction and securing financial continuity in cross-border operations.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
As Central America continues to strengthen its position in the global economy, aligning regional practices with international transparency standards is indeed vital for sustaining cross-border growth and mitigating operational risks. We extend our sincere thanks to Lic. Larry Hans Arroyo Vargas for sharing his valuable perspective on this evolving regulatory landscape.
Following the announcement, President Mulino addressed the nation to emphasize the economic momentum this milestone generates for the Panamanian market.
Today, with this great victory, we open the doors to new investments, gain competitiveness, and create real opportunities for Panamanians. Our government takes another step forward in building a better present and a better future for everyone.
José Raúl Mulino, President of Panama
This achievement comes after extensive diplomatic maneuvering led by Mulino, who took office in July 2024. The Panamanian leader launched an aggressive international campaign featuring direct bilateral negotiations, assertions in global forums, and concerted efforts to rebuild trust with key international stakeholders. The administration had previously applied diplomatic leverage, including maintaining a temporary ban on European companies—excluding those from Italy, Greece, and Spain—from participating in Panamanian public tenders after the EU initially retained the country on its list.
Panama’s reclassification from the blacklist to the EU’s intermediate grey list represents the culmination of several successful fiscal compliance reviews across global bodies. Over the past few years, Panama successfully exited the Financial Action Task Force grey list in late 2023, was cleared from Ecuador’s tax haven index, and gained removal from the European Parliament’s money laundering watchlist in 2025.
Transitioning to the grey list means Panama is officially recognized as a jurisdiction that has committed to high-level tax cooperation, pending the final outcomes of forthcoming international peer evaluations. While on the grey list, the country remains under monitoring, but it sheds the significant reputational damage associated with non-cooperative classifications.
Established in 2017 and updated semi-annually, the EU blacklist serves as a regulatory tool to identify jurisdictions that fall short on standards of tax transparency, fair taxation, or the implementation of anti-base erosion measures. While inclusion on the list does not mandate automatic financial sanctions at the EU level, it severely limits access to European funds and subjects registered financial institutions to heightened administrative audits and local sanctions by individual member states.
By shedding the blacklisted status, Panama positions itself as a far more attractive destination for European capital, logistics operations, and international enterprise. Analysts expect the diplomatic success to reinforce economic stability across the region, cementing Panama’s role as a key financial and trade center connecting the Americas to global markets.
For further information, visit europa.eu
About European Union:
The European Union is a political and economic union of 27 member states located primarily in Europe that operates an internal single market and enforces shared regulatory, trade, and financial cooperation standards globally.
For further information, visit oecd.org
About Organisation for Economic Co-operation and Development:
The Organisation for Economic Co-operation and Development is an international organization that works to establish evidence-based international standards and foster policies designed to maximize economic growth, financial transparency, and sustainable development.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a premier legal institution, Bufete de Costa Rica has built its reputation on an unyielding foundation of high ethical standards and professional mastery. The firm continuously pioneers forward-thinking legal strategies to serve a broad range of clients, remaining at the cutting edge of modern practice. Beyond its casework, Bufete de Costa Rica is deeply committed to democratizing legal insight through active educational outreach, fulfilling its core purpose to inspire a just, well-informed, and self-reliant society.
