PANAMA INVESTMENT OPPORTUNITIES

IF YOU ARE AN INTERNATIONAL INVESTOR AND LOOKING TO DIVERSIFY YOUR PORTFOLIO, PANAMA PRESENTS A VIABLE PLACE TO INVEST. OUR CONSULTANTS CAN ASSIST YOU TO CONDUCT DUE DILIGENCE ON INVESTMENT PROJECTS AND PRESENT YOU WITH THE BEST INVESTMENT STRATEGY TO OPTIMIZE THE RATE OF RETURN ON YOUR INVESTMENT.

MOODY RATING
As of October 2021, Moody’s confirmed a Baa2 Stable Outlook rating based on:

1. Panama’s credit profile, the document “reflects the country’s continued strong economic performance and broad macroeconomic stability. The economy has grown by an average of 6% during the last decade, strengthened by the key role of the Panama Canal in world trade as well as by high rates of investment.

2. Regarding the stable outlook, he explained that Panama balances its high economic growth potential and relatively favorable financing conditions with the challenges that the authorities will face when adopting policies to stop the upward trend of the debt and, ultimately support fiscal consolidation.

BICRAs (S&P)

The strengths and weaknesses of an economy and banking industry are critical factors that underpin the creditworthiness of a country’s Financial institutions. S&P distills this analysis into a single Banking Industry Country Risk Assessment (BICRA), “designed to evaluate and compare global banking systems” as stated by their criteria. BICRAs are scored on a scale from ‘1’ to ’10’, ranging from what they view as the lowest-risk banking systems (group ‘1’) to the highest-risk (group ’10’).

The BICRA methodology has two main analytical components: “economic risk” and “industrial ris “industrial risk.” A BICRA analysis for a country covers all its Financial institutions that take deposits, extend credit, or engage in both activities, whether rated or not. In addition, the analysis considers the relationship of the banking industry to the Financial system, and furthermore to its sovereign.

For that reason, many of the factors underlying a sovereign rating are important in determining a BICRA score. Their analysis of economic risk of a banking sector considers the structure and stability of the country’s economy, including the central government’s macroeconomic policy flexibility; actual or potential economic imbalances, and the credit risk of economic participants mainly households and enterprises. Their view of industry risk factors in the quality and effectiveness of bank regulation and the track record of authorities in reducing vulnerability to Financial crises, as well as the competitive environment of a country’s banking industry including the industry’s risk appetite, structure, and performance and possible distortions in the market. Industry risk also addresses the range and stability of funding options available to banks, including the role of the central bank and government.

Investing in Panama Stocks, ADRs or Bonds

Although relatively new and smaller in size, the Bolsa de Valores de Panama ( Panama Stock Market ) is attracting more companies to list in their exchange. 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.

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 $100,000, 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 – Set Up An Offshore Company

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 need help or have any questions, please contact us. Panama Legal Center qualified professionals are ready to assist you.

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