Why Invest In Panama?

Find out below why Panama is currently offering such a strong investment option for international real estate buyers.

Panama’s favourable economic development has been triggered by the fact that it is the fastest growing tourism market in South America and the second largest banking sector in the world. The expansion of the Panama Canal and its major Colon Free Trade Zone are also significant in Panama’s success.

These factors are currently precipitating significant growth in the real estate sector and offering investors prime opportunities to supply the huge demand for both commercial and residential property in Panama.

Advantages of Panama Investment

  • Panama City is a major world centre for international banking and related financial activity. The absence of currency exchange controls allows cash to flow in and out of Panama freely, enticing investors to bring their banking activities to Panama.
  • Panama has identified various parts of the country as ‘Special Tourism Zones’ which offer benefits and tax breaks such as:
    Property and land tax exemption
    Income tax exemption for 15 years
    20 years import and sales tax exemptions
    20 years income tax exemption for tourism activity investment
  • Panama shows no signs of change in its upward progress. In its annual report, Moody's Investor Service says, "the country's split ratings and stable outlook reflect a manageable fiscal position."
  • The International Monetary Fund (IMF) rates Panama as the fastest-growing economy in Latin America.
  • A politically sound status is confirmed by the Political Risk Services (PRS) who have placed Panama in the top three countries of its hemisphere in terms of best risk-investment qualifications. Moody's and Standard & Poors have both granted high ranking to Panamanian financial institutions.
  • A democratic constitutional government with an excellent infrastructure, including good hospitals and international schools, the modern Tocumen International Airport and advanced telecommunications, makes Panama a very desirable location for expatriates.
  • Foreign and local citizens are guaranteed equal treatment in investment and property transactions, reinforcing Panama’s tradition of providing a investment-friendly foreign investment arena
  • Panama is ranked top of the list of the world's freest economies. According to Canada's Fraser Institute (Economic Freedom of the World), Panama came in eighth with Australia, Ireland, The Netherlands and Luxembourg. Panama therefore represents an environment conducive for the creation of companies, jobs and prosperity.
  • Government incentive schemes have produced over 40 decrees offering investors special import, tax and operational advantages. These apply particularly to the tourism, maritime, real estate and mining sectors
  • Located at the Caribbean entrance of the Panama Canal, the Colon Free Trade Zone is the second largest in the world, housing around 2,000 merchants and receiving over 250,000 visitors per year, mainly from the USA, Haiti, Jamaica, Costa Rica, Venezuela, Ecuador and Columbia
  • A low cost of living and tax exemptions make Panama a cost-effective location in which to invest. Its tariffs are the lowest in the region, helping to increase foreign investment in both the public and private sectors
  • Around 80% of Panama’s workforce speaks English, after Spanish. Most Panamanians living in the banking area of Panama City are completely bilingual
  • Annual property capital appreciation of up to 20% and rental yields of approximately 8% make Panama property a potentially profitable investment
  • Retirement property investment is heavily boosted by the fact that the government’s Pensionado Programme entices international retirees due to its many tax exemptions and discounts

Property purchase is a popular option amongst buyers wishing to capitalise on the excellent growth potential of property in Panama, particularly through the use of off-plan property as an investment vehicle. Alternatively, a buy-to-let situation can provide reliable rental income from property, along with substantial capital appreciation in the medium to long term.

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