Panama Business

General Business Information

*** A US dollar based economy using US paper money since 1904. All currency controls were abolished in 1970 by law (Decree No. 238) which makes offshore businesses exempt from income tax as well as taxes on domestic savings accounts and off shore transactions.

*** Low inflation and zero foreign exchange rate risk making for low interest rates on commercial loans and mortgages (30 year plans are easily obtainable). Exchange controls are nonexistent.

*** Panama adopted tax haven legislation in the 1920s (along with Liechtenstein and Luxembourg) to guarantee financial privacy and confidentiality. You are not required to report beneficial trust or corporate ownership information to the authorities ... nor does the government have double-taxation or tax information exchange agreements with other countries.

*** The Economic Commission for Latin America and the Caribbean (ECLAC), the Organization of American States (OAS), and the Interamerican Development Bank (IDB) have ranked Panama as number one in the region for their low cost of living, operations, and labor (those near city centers are all bilingual).

*** Extensive tax holidays are offered for businesses involved with tourism, real estate, reforestation, farming, mining, and maritime pursuits, insurance and reinsurance, infrastructure and construction, and export processing and petroleum free zones. (See below for more detailed information on government incentives for tourism)

*** The Investment Stability Law (1998) guarantees all foreign and national investors equal rights in business and practices. All Panama’s residents, be they foreign or local, are treated exactly the same.

*** There are no restrictions against 100 per cent foreign owned companies nor on mergers, acquisitions or joint ventures.

*** The Fraser Institute of Canada rated Panama as one of the world’s top free economies -- the country ranks eighth along with Ireland, Luxembourg, the Netherlands, and Australia. The Wall Street Journal’s Heritage Foundation rated Panama second in the region for Economic Freedom.

*** Panama has bilateral trade agreements with over 20 countries, and investment protection agreements with a dozen to include the United States, Canada, the United Kingdom, France, Germany and Spain. And Panama is a member of the World Trade Organization.

*** According to a recent Reuters news release, The International Monetary Fund issued an upbeat assessment of the Panamanian economy, in particular, praising the government of Martin Torrijos for their commitment to contain public spending, reform taxes and encourage economic growth.