Data Centers in Panama City

Panama City – The Crossroads of the Americas

Panama City is the principal connectivity and logistics hub for Central and South America. For businesses requiring a strategic footprint to serve emerging markets in the region, its concentration of subsea cable landings and carrier-neutral data centers provides a critical advantage for managing latency and ensuring uptime.

Panama City: At A Glance

Network & Connectivity Ecosystem

Panama City's strategic location, bridging North and South America, makes it a critical interconnection point. Its ecosystem is defined by a high concentration of subsea cable landings rather than a large number of local carriers.

Carrier Density & Carrier Neutrality: The market features 3 primary network service providers, as of September 2025. Carrier-neutral facilities are the core of the colocation market, offering access to multiple providers and subsea cable systems under one roof.

Direct Cloud On-Ramps: There are no public cloud on-ramps located directly within Panama, as of September 2025. Businesses connect to cloud providers like AWS, Google Cloud (GCP), and Microsoft Azure via network links to the nearest major hub in Miami. Private network extensions provide secure, reliable access.

Internet Exchange Points (IXPs): The Panama IXP is the primary exchange in the country, enabling local traffic exchange between networks. This reduces reliance on international transit for in-country data, lowering latency for local users.

Bare Metal: Bare metal server options are available, providing dedicated compute resources for performance-sensitive applications. Providers like Hivelocity offer services in the region, connecting directly to the local network fabric.

Power Analysis

Panama's power infrastructure is a key consideration for data center operations, balancing cost with grid stability.

Average Cost Of Power: Industrial electricity rates typically range from $0.16 to $0.21/kWh, as of September 2025. This cost structure is influenced by the country's significant reliance on hydroelectric power, which can offer price stability compared to markets dependent on fossil fuels.

Power Grid Reliability: The power grid in Panama City's commercial zones is generally reliable. The energy mix is dominated by hydroelectric generation, supplemented by natural gas and oil, ensuring a consistent power supply for critical facilities.

Market Access, Business & Tax Climate

Panama offers a unique business environment, positioned as a gateway for regional commerce and finance.

Proximity To Key Business Districts: Data centers in Panama City are situated to serve the country's thriving international banking center, logistics hubs around the Panama Canal, and various multinational corporate headquarters. This proximity supports low-latency requirements for financial services and trade operations.

Regional Market Reach: From Panama City, businesses can effectively serve markets across Central America, the Caribbean, and the northern regions of South America. The country's robust subsea cable infrastructure is the primary enabler of this extensive reach.

Tax Advantage For Data Centers: While Panama does not offer specific tax incentives for data centers, its territorial tax system can be advantageous. The 7% ITBMS (VAT) is a standard rate applicable to most goods and services.

Natural Disaster Risk

Panama has a moderate overall disaster risk profile, with specific hazards that require careful site selection and infrastructure planning.

The overall INFORM Risk score is Moderate (4.1 out of 10), as of September 2025. While the country is outside the primary hurricane belt, operators must engineer facilities to withstand specific, high-impact events.

Key natural hazards include:

• Tsunami (8.5/10)
• Earthquake (7.8/10)
• Coastal Flood (5.9/10)
• Drought (1.2/10)

Risks from tropical cyclones and river floods are rated as minimal for major data center locations.