As North America began to launch more EDM festivals than it could support, organizers cast their eyes toward Latin America as an affordable destination for top DJs and brightly clad fans. First came Mexico: The BPM Festival, which launched in 2008 as a modest gathering, has grown into a 10-day behemoth that attracted more than 50,000 attendees in 2014. Insomniac Events’ Electric Daisy Carnival drew a whopping 80,000 people in its inaugural Mexico City installment in 2014, and Cancun’s Inception Music Festival lasts 30 days.

Soon, enterprising EDM entrepreneurs began looking even farther south — and settled on Panama. A barometer for the country’s progress is the third annual The Day After Festival, taking place Jan. 17-19 in Panama City, with headliners including Martin Garrix, Tiesto, Afrojack and Hardwell. The event is a joint venture between SFX-owned, Puerto Rico-based Disco Donnie Presents (DDP) and leading local event planner Showpro, which produces up to 15 annual large-scale music and sporting events.

Showpro president Alfredo Arias is betting TDA will put the company and country on the map. Put off by the high price tags that come with franchising existing festivals like Ultra or Tomorrowland, Showpro decided to create TDA in 2013. The 2014 festival drew 30,000 people over three days, and “this year is going to be our biggest,” says Arias, who’s expecting 36,000 attendees at the city’s Figali Plaza Convention Center. He also is in the early planning stages for an EDM festival at Halloween and a conference in conjunction with TDA. “We have a lot to learn [in EDM],” he says. “That’s where [DDP] comes in.”

DDP founder and EDM veteran James “Disco Donnie” Estopinal puts on hundreds of shows a year in the United States and promotes such festivals as Nocturnal Wonderland in Texas and the Sunset Music Festival in Tampa, Fla. “Panama’s location and love of dance music makes TDA a natural fit to connect EDM fans in North and South America,” he says.

Just a five-hour flight from New York, the country boasts the biggest airport in Latin America, a business-friendly government and venues suited for DJ gigs, such as Sahara and Moods, along with a Hard Rock Hotel that opened in 2013 and can hold up to 1,000 people for events. (It probably doesn’t hurt that the family of new president Juan Carlos Varela owns the country’s largest liquor producer.) Panama also welcomed some 2.4 million tourists in 2014 — more than half of the country’s total population of nearly 4 million — according to its tourism bureau. “It’s natural beauty and metropolitan nightlife combined,” says Arias. “We offer people a reason to stay.”