Panama Business

Government incentives and guidelines:

Many laws are in effect which govern incentives and guidelines for foreign and local investors ...refreshingly, they’re exactly the same for both groups. Because of the plethora of material, we’re including abbreviated notes on tourist oriented projects only in the following. Regardless of your area of interest, we cannot urge you strongly enough to consult a Panamanian lawyer regarding the finer points, and interpretation, of local law.

Law No. 8 (1994) was enacted to attract foreign monies in promotion of tourist activities in Panama. The government realized they needed to grant incentives and benefits to compete in the ever widening world tourist market. And to be certain everything was as clear as it could be, they broke potential businesses up into the following categories: hotels, motels, apartment hotels, cabins, time-shares, eco-tourism camping sites, restaurants, theme parks, bed and breakfasts, inns, and convention centers. As well, the government is actively courting native Indian areas for tourism development seeking to promote their rural cultures and traditions.

They then added subsections to cover ancillary businesses like golf or tennis courts, public saunas and spas, gyms, and discotheques as they related to hotels ... the construction and furnishing of all the above ... land, air, and marine transport ... historic landmarks ... all publicity materials ... even the filming or taping of a fictional story, sport, or event for distribution abroad ... all under the heading of tourism. In an effort to make themselves investment friendly, they’ve woven a detailed web.

For instance, if you want to open a restaurant, you need to show a minimum investment of $120,000 in Panama City and $20,000 in the rest of the country, not including the land it sits on. If you want to run some sort of lodging establishment, you need to prove $300,000 in Panama City and $50,000 elsewhere (not including land) ... but if you’re planning on an inn or B & B, the minimum investment could be considerably less. In these cases, IPAT (the Panama Government Tourism Bureau) will set the limits.