Panama has established itself as an ideal country to do business for a number of reasons. It has been one of the stronger Central American countries during the COVID-19 pandemic, and there are always plenty of options for those looking for investment targets. Randall Ortega Castillo of RACO Investment, a lending company focused on small- and medium-sized businesses in Panama and Costa Rica, discusses why investing in business opportunities in Panama makes sense.
Those interested in investing in Panama today should know that in general terms, the climate for investment is stable in social, political, labor and economic matters. On the legal side, Panama presents a transparent and robust environment, which improves the issue of investment. Value-added includes the use of the dollar as a currency, which makes the investment option more affordable because investors prefer to invest in a currency that does not have mini devaluations, thus protecting their capital and assets.
Investing in Panama today opens up great options to generate large dividends thanks to a strategic geographical location, enormous productive potential and natural resources with a fairly strong economy. Explains Castillo, “The expansion of the Panama Canal is another great advantage of this country which, moreover, is free of hurricanes and earthquakes. Its airports connect with the world’s major cities, as well as having five seaports with the most modern facilities, the largest merchant fleet in the world and the second Free Zone on the planet, in Colon.”
For the European investor this is the best time to invest in Panama, as it helps it to dodge the current housing bubble, taking advantage of a euro stronger than the dollar to invest in dollarized markets. In addition, Panama is becoming the second place of residence for many retirees around the world, mainly Americans, under the large tax incentives offered by Panamanian laws.
In Panama, retirees find products interesting from $60,000 and with the added advantage that local banks grant mortgages for non-residents for 70% of their appraisal value; therefore, only 30% of the capital is required. Investing in Panama today is the safest and most cost-effective option for small and large investors and developers who decide to place larger sums from the purchase of more than one new construction apartment to the construction of all kinds of housing and tourism projects, both in Panama City and on beaches, the interior of the Republic and islands.
Adds Castillo, “According to the Panamanian National Association of Real Estate Promoters and Brokers (ACOBIR), about 20% of real estate investment is made by foreigners, motivated by the revaluation of acquired goods – 20% for homes and plots. In addition, this good bullish data will have a long journey, of seven or eight years, due to the thrust of the construction that entails the expansion of the Panama Canal.”
Investing in Panama has never been simpler. As part of the Panamanian Government’s strategy of attracting foreign direct investment, the Panama Agency for the Attraction of Investment and Export Promotion (PROINVEX) has been established. An autonomous government agency attached to the Ministry of Trade and Industries of Panama whose express objective is to explain to foreign investors how to invest in Panama.
“The intention of the creation of PROINVEX is that the government of Panama can provide as much assistance as possible regarding the legal and bureaucratic processes that foreign investors have to comply with if they wish to invest in Panama,” explains Castillo.
Since we are talking about a government agency, but autonomous, PROINVEX positions itself as the best option when advising foreign investors in Panama. This agency’s extensive network of contacts can provide investors with the necessary synergy between the public and private sectors. This has the aim of facilitating direct investment processes in the country.