Panama is the southernmost country of Central America. A transcontinental country, its isthmus constitutes the southernmost part of a natural land bridge between the continents of North America and South America.

By 1999, Panama controlled the Panama Canal that links the North Atlantic Ocean via the Caribbean Sea with the North Pacific Ocean. It borders Costa Rica to the west, Colombia to the east, the Atlantic Ocean to the north and the Pacific Ocean to the south.

The country is also the smallest in Spanish-speaking Latin America in terms of population, with Uruguay as the second smallest (by almost 400,000). A nearly impenetrable jungle forms the Darien Gap between Panama and Colombia. It creates a break in the Pan-American Highway, which otherwise forms a complete road from Alaska to Chile.