Panama has the best business infrastructure in Latin America and the Caribbean.

The U.S. Dollar has been Panama’s official currency since 1904 and is freely used as legal tender so there are no conversion or valuation concerns. Additionally, Panama has a modern and extensive International Banking Center.

Foreign Investors

Panama actively seeks investment. Put simply, Panama is an investor and investment for a number of reasons, such as…

  • All foreign and national investors are guaranteed equal rights by law.
  • Foreign investors do not require special authorizations, permits or prior registration.
  • Extensive exemptions and incentives are available to investors in numerous key sectors. Durations usually run from 10-25 years.
  • Real property can be transferred or mortgaged and the resulting income is tax exempt.
  • Foreign investors are encouraged to obtain Panamanian residency.
  • Panama is “clean” offshore domicile and is a member of the World Trade Organization.

Investor Law

In Panama, foreign investors have the same rights as nationals. Law 54 states:

Foreign investors and the enterprises in which they participate have the same rights and duties as national investors and enterprises, with no other limitation than those established in the Political Constitution and the law, including those that refer to the freedom of trade and industry, and export and import.

Furthermore, the freedom to dispose of the profits obtained in their investments, the freedom to repatriate their capital, dividends, interest and profits produced by their investments and the freedom to commercialize their production is guaranteed hereby to said investors.

Reforestation Law

Panama actively promotes reforestation and has designated as a top-priority investment and development industry. Through Law No. 24 of 1992, which was adopted to encourage reforestation, the Panamanian government has granted incentives for foreign investors who reforest land, which include:

  • A 25-year income tax exemption.
  • Eligibility for Panamanian residency.
  • Protection from “squatters” or persons seeking to damage reforested lands (classified as a felony).

Tax Benefits

Panama has recently passed legislation regarding new home construction. The new statute states:

Anyone building or registering to build a residence before January 1, 2004 will receive a 20-year tax exemption from the date construction is completed. This exemption status is transferable to any new buyer during the period of the exemption.