Tourism & Incentives

Doing Business in Panama & Tourism Incentives

There are many advantages to doing business in Panama. Here are some of the reasons many business owners and land owners have began businesses in Panama.

First, the US dollar currency is the official currency of the country. Foreign investors appreciate the absence of foreign exchange risk. They also have an easy understanding of what goods and real estate are being traded for. The presence of the US currency has attracted a lot of foreign investment.

The Panamanian Government is business minded and believes in an open market economy. There are no government expropriations or interference as there is in many Latin American countries. All investment is backed by a government that realizes the value of private business to their developing country. In 1946 the Panamanian government created the Colon Duty Free Zone which is the second largest free trade center in the world. Hong Kong is the largest. The government also offers many attractive incentives to foreign investors such as legal residency and tax privileges.

In 1994, the Panamanian Government passed Law Number 8 to increase tourism activity throughout the country. According to this law, with a minimum investment of $30,000 in Panama City or $50,000 elsewhere, you receive accelerated depreciation on real estate assets of 10% per year. You may also receive a 20-year exemption of import duties for materials, equipment and vehicles and a 20-year exemption on real estate taxes for your business.

Banking in Panama is big business. With over 130 banks, Panama is considered an international banking capital and one of the most important offshore business centers in Central America.

Panama's central location makes it an easy place to get supplies needed to run a successful business. The countries central location is also key when traveling to and from major business centers such as Europe and the United States. With high speed internet, cell phones, fax lines and telex, you can easily run a business from this country without missing a beat.

Modern labor laws and a hard working population also make running a business easy in Panama. The average per capita income is just over $4,000 per year. Many large international companies are moving their call centers to Panama as they can find affordable, quality, bi-lingual employees plentiful.

As a foreign investor, you have equal rights and laws that protect you. When you start a business in Panama, it is not required that you have a Panamanian partner, nor do you have to have residency.

Additional reasons for investing in Panama are; asset protection, privacy from individuals and governments and fewer taxes than can be found in the United States.