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Investment in Panama

When looking for foreign investment options, the best place to start your search is the country’s government. After making this search, more and more people are making their investments in Panama. Among the factors to consider when deciding to invest in Panama, or any other country, are currency, access to capital, economic freedom, and investment laws. When looking at these criteria, investing in Panama is sound business.

The currency of Panama has been the US dollar since 1904, although it is referred to as the Balboa for nationalistic purposes. Because Panama does not have a central bank to print its own money, government spending is tied to tax and non-tax revenues, as well as the government’s ability to borrow. While this sounds like a problem, it presents no serious issues in an economy the size of Panama’s. In addition, having the US dollar as its currency for so long has placed Panama ahead the world in the increased use of the American dollar. There is also virtually no exchange risk to foreign companies and investors due to this association. All of this adds up to make investing in Panama very comfortable and easy for people from both the US and Europe.

Access to Capital
Investing in Panama is also easy because Panama is near the top of the list of countries with the best access to capital, ranking below only Brazil and Chile in all of Latin America according to a report by the Miken Institute in 2005. Among the things considered by this report were economic development, banking development, capital markets, international recognition and sovereign risk. This is crucial information for the retiring person investing in Panama. The security of knowing that the Panama is viewed as an excellent investment location can be extremely comforting.

Economic Freedom
Investing in Panama also makes good sense due to its standing as one of the world’s freest economies. Panama belongs to the World Trade Organization (WTO) and is a beneficiary of the Caribbean Basin Initiative (CBI). Panama has been negotiating a Free Trade Agreement with the United States, and has initiated formal discussions pertaining to free trade agreements with numerous countries and regional groups. Panama had an inflation rate below 2% for 40 years and it was on 2.3% in 2005.

Investment Laws
The ability of foreign investor to enjoy equal rights concerning investments and business practices is another important factor for investing in Panama. The government’s position has been to create an environment for foreign investment that doesn’t require special authorizations, permits, or prior registration. The law provides a 10-year stability for registered investments that guarantees legal, tax, customs, municipal and labor rules will remain in effect. Volatility in government policy can put investments at risk, but such laws make Panama an excellent place to invest.

Considering all of the factors involved, investing in Panama is a great opportunities for professionals and retirees alike. Stability, growth potential, and freedom make this tropical paradise and great place to put your money. Investing in Panama is safe, easy and profitable.

For more information about investing in Panama, including Panama real estate, offshore bank account, offshore corporations and even hedge funds, please contact us for more information.