Invest in Panama: 6 Solid Reasons to Invest in Panama
Why Invest in Panama?
Panama means business. We can recommend investing in Panama for several reasons:
The process of investing in Panama is simple and straightforward, but we recommend that you always work with a good attorney. This is smart business practice, but it’s particularly important in Panama where a large part of realizing success has to do with making contacts and building relationships. A reputable lawyer is a good place to start.
Panama has increasingly become more popular for foreign investment due to its stable political environment, pro-business government, rising real estate market, and growing economy. There are several ways to invest in Panama, including stock, American depository receipts, real estate, and starting a business.
Investing in a Panamanian Stocks, ADRs or Bonds
Although relatively new and smaller in size, the Bolsa de Valores de Panama is attracting more companies to list their stocks. For example, one of the more heavily traded stocks on the exchange is COPA, a large Panamanian airline with 115 airplanes flying to all the Americas. COPA is also traded at the New York Stock Exchange.
Panama´s debt is ranked "Investment Grade". This is extremely important. Only 3 countries in Latin America have this status. Moody's one of the top investment rating agencies raised the rating of Panama's sovereign debt to Baa2 and improved its outlook for Panama from "stable" to "positive”. Investors looking to gain exposure can seek other ties to Panama by investing in an American depository receipts, or ADR. As of January 2019, there were two available Panama ADRs on U.S. exchanges: Banco Latinoamericano de Exportaciones S.A (BLX) and Copa Holdings S.A. (CPA).
Investing in Panama Tourism
From developments like B&B, hostels and resorts to projects like charter dive operations or guiding trips, there are nearly unlimited options for an investment in Panama’s tourism sector.
You could build a bed and breakfast in the hills of El Valle, start a white-water rafting outfit in Chiriqui, or operate a scuba dive shop in Playa Santa Catalina. Recently, there was a hotel and fishing resort for sale in Boca Chica in Chiriqui. All tourism incentives currently in place in Panama are expected to remain.
Invest in Panama Reforestation
Panama is currently focusing a great deal of attention on the reforestation of its land. To attract foreign investors to this sector, the government grants financial and forestry incentives for investors who purchase land designated for reforestation or that has already been reforested. If you invest at least US$80,000, for example, you can obtain a Complete Reforestation and Investor Visa Solution, which is a quick way to obtain Panama residency.
Invest in the Panama Real Estate Market
Panama’s real estate has been on the rebound and recovered from the global financial crisis of 2008 faster than most other Central American countries. Much of the real estate recovery has been attributed to the growth of retirees moving to the area and the milder tropical weather. Panama offers a retirement incentive that includes the import of tax-free household goods and many discounts on hotels, restaurants, movies, and other professional services.
Panama also has several incentives for construction projects. New residential construction valued up to $120,000 gets 20 years of property tax exoneration on the improvements. Construction ranging from $120,000 to $300,000 gets 10 years of property tax exoneration, and anything above $300,000 gets five years.
Invest in the Panama Pacifico Special Economic Area
The government of Panama created the Special Economic Area Panama Pacifico was created, acting as an independent and responsible entity for the administration, promotion, development, regulation and proper use of the areas assigned to the Panama Pacifico region. The Special Economic Area give companies that set up within the area special tax, labor, and legal incentives. These intensives makes it attractive for global corporations to set up regional headquarters within the area. A number of multinational corporations have already located in Panama Pacifico, including 3M, DELL, BASF and Caterpillar.
Doing Business in Panama - Open a Business
Panama is fast becoming the jurisdiction of choice for companies seeking to relocate their business interests and regional headquarters. An efficient workforce, Spanish and English widely spoken and a strong, transparent tax system have all contributed to this growth. Foreign sourced income and their owners are exempt from income, withholding, income, capital gains, and estate taxes. When opening a business in Panama, knowing Spanish is useful but not required. What is highly recommended is hiring a good business attorney to help ensure that the business is going through the correct process with both the national and local governments.
Aside from being a great place to invest and run a business, Panama also offers an excellent quality of life. With its tropical environment, Panama is far more relaxed and reasonably priced than other US or European cities. Panama offers a safe haven to medium and high net families of other neighboring counties such as Venezuela and Colombia suffering from political instability. The country has your day-to-day needs covered, with some of the best medical care in the world and an excellent education system, whether private or public.
If you wish to do business or invest in Panama, we recommend you to download our Doing Business in Panama guide, which is absolutely FREE.
If you need help or have any questions, please contact us. The Business Panama Group has qualified professionals to assist you.
Should you be interested in other areas of investment or business in Panama, below you can see a menu of other webpages within our site, which will provide you plenty of additional information.
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