One question that consistently foreigners ask is what are the factors that have made Panama one of the fastest growing countries in the Central America. Undoubtedly, Panama has a number of logistical, economical and legal advantages that place it as one of the best investment destination in Central America. The competition among countries has been challenging however there is economic and political stability in Panama. The ability to own titled property, Panama's long history of financial transactions as well as our estimated geographical position has contribute to the present state of economic growth.
Among the most important legal mechanisms for generating business in Panama, is the policy of open registry ships, created by law 63 of 1917, which allows the owner of any vessel, whether natural or legal person, and regardless of their nationality or domicile, can register their vessels under the Panamanian flag. In addition, the “ship mortgage” has large acceptances that are processed rather quickly within international banking institutions, because of its rapid and effective execution as a means of guarantee.
On the other hand, Panama also has a law of corporations which provides an incredible facilitation of international transactions, optimal protection to assets and investments and allows the operation of any lawful business in or outside the country. Other figures that make up the Panamanian Corporate Law are limited liability companies, trusts, and private interest foundations.
Furthermore, the tax system is a strong pillar of the national economy, characterized by the principle of territoriality that allows the exclusively imposition of taxes on national commercial activities. Consequently, gains from foreign sources are exempt from taxes, regardless of the nationality of the taxpayer or the radius of their business operations. Similarly, Panama operates on the US dollar without a central bank to issue currency and keep a control on capital movements.
Panama offers a conservative and reliable banking system enabled the country to resist one of the most severe economic crisis and therefore some might described as the best in Central America, comprising more than 80 banks. Moreover, the Colon Free Zone is an area of constants and new business opportunities for domestic and foreign, besides representing an 8% contribution to GDP of the national economy. Panama is moving along to the events of the time, making important steps to use modern technology and recognize the importance of international law as a legal platform for our international expansion. Accordingly, Panama has signed several treaties, agreements and international commitments including social, economic, legal, humanitarian issues, and has made important steps to facilitate tax information exchange.
Panama has become a metropolis of real estate projects, roads, ports, airports, shopping centers and places of entertainment, a vibrant place to live and invest. While there are still issues to resolve, Panama has the tools to ensure the growth of investment in an atmosphere of political calm and certainty.
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