Benefits of Living & Investing in Panama

Benefits of Living Living & Investing in Panama

Selecting a place to live and/or base your business is key to your happiness and success in business. Panama offers the following benefits:

1. Safety – Panama is among the safest countries in Central and South America, and is regularly visited by many people from all over the world.

2. No Natural Disasters – Panama does not have hurricanes, tornadoes, tidal waves, forest fires, major earthquakes (we do have small tremors from time to time), or any dangerous natural disasters.

3. Warm Tropical Weather – Panama offers warm tropical weather all year long.

4. Stable Currency With No Currency Restriction Regulations – Panama’s circulating currency is the US Dollar and Panama has no currency exchange controls or currency restrictions so funds can flow in and out of the country freely.

  • Panama uses the U.S. dollar as its legal tender (currency), instilling tremendous fiscal and monetary discipline while keeping inflation very low – under two percent for the last 40 years.
  • A dollar economy insulates Panama from global economic shocks. During the Asian monetary crisis of 1998, Panama became one of the healthiest economies in Latin America.
  • No currency exchange controls. Panama has no restrictions on monetary remittances abroad, including dividends, interests, branch profits and royalties.
  • No restrictions on funds flowing in or out of the country in any currency.

5. Advantageous Laws For Business – Panama has a number of pro-business laws, promoting foreign investment, plus the country offers an advantageous territorial tax system. Please note that US Persons are subject to world-wide taxation and must report their world-wide income to the US.

  • Panama business income taxes are only levied on local business income from within the territory of Panama.
  • There is no business income tax on income from sources outside of Panama.
  • Local business income tax is only 25% of net income after deductible expenses.
  • Dividends from local Panama income is only 10%.
  • Dividends from foreign source (outside of Panama) income is only 5%.

6. Stable Government & Economy – Panama has what is considered by government analysts to be the most stable government in all of Central or South America.

  • Democratic government since 1990. The Government of Panama is headed by the executive branch, which is composed of a president and two vice presidents, democratically elected for a five-year term by direct vote.
  • Mireya Moscoso was Panama’s first female president and led the country at a moment of great historical importance as the Panama Canal began a new era under Panamanian administration.  As of this writing (Aug 2021), the president is businessman Nito Cortizo, and he is a right wing, pro-business advocate.
  • The Panamanian military was abolished by constitutional amendment in 1994, and the government still has a unique security arrangement with the U.S. due to the Neutrality Treaty of the Panama Canal. As a result, the risks of going back to the earlier military regime are virtually non-existent (Source: Euromoney Report/Lehman Brothers, Feb. 26, 1999).
  • Stable government with excellent government infrastructure.
  • Pro-business government attitude and policy.
  • Civil law system.
  • Investment grade government debt rating.
  • Panama is a peaceful country with no military. Unlike many neighboring countries, personal security concerns are limited. Panama has one of the lowest crime rates in all of Central and South America.
  • Panama offers a stable & well diversified economy including major industries such as shipping, transportation & logistics, ports, banking, free trade zones for import & export business, agriculture, tourism, among other industries.

7. Excellent Banking System – the banking system of Panama is very advanced in areas of international banking regulations, infrastructure, government auditing, and technology.

8. Excellent Communications System – the communications systems of Panama are of the best in the world, with high speed internet and high-tech telecommunications services.

9. Language Compatibility – the language of Panama is Spanish, and the second language most commonly spoken is English.

10. Time Zone Compatibility & Close Location – Panama is on Eastern Standard Time zone, making it ideal for doing business on the American or European Continent. Panama has direct flights from over 100 major international cities, so it is easy to fly to and from Panama from just about any major city.

After careful research, you will find Panama to be the ideal jurisdiction for living and doing business.

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