Randall Ortega Castillo of RACO Investments discusses the benefits of launching a business in Panama

As one of the freest and most vibrant economies in the world, Panama is a country rich in opportunities for local and international entrepreneurs. Fueled by foreign direct investment and its import and export market, it is the best choice for companies wishing to expand their presence in Latin America, and international companies looking for a site abroad to house their assets and protect their business in uncertain times. Randall Ortega Castillo, who founded RACO Investment to cater to the growing need for private financial investments in Panama and Costa Rica, discusses some of the most important reasons why Panama should be on its list when considering a new business.

Panama has grown at an unprecedented rate over the past ten years. Between 2013 and 2018, GDP per capita increased from $11,841 to $15,090, and its GDP across the country increased by a third to $61.8 billion. Says Castillo, “The country, on average, grows more than 5% annually and several new infrastructure projects, such as the Panama Canal Additional Bridge and the Columbus Urban Regeneration Scheme, are helping to boost the economy and encourage foreign direct investment (FDI).”

In addition to these new developments, the government of Panama implemented a five-year Strategic Development Plan, which began in 2015 and ended last year. The scheme covers five key concepts, all designed to boost inclusion and competitiveness in the country: to improve productivity and diversify growth, to improve quality of life, to strengthen human capital, to improve infrastructure and to improve environmental sustainability, including its management.

This new strategic plan is accompanied by the recently announced plan Vision 2030 Panama. The plan is to encourage foreign investment and build a smart city for current and future generations, building on the macroeconomic stability created by the Panama Canal and other infrastructure projects announced since then.

At a time when business leaders have to fight through a bureaucratic tape for their new companies to take off, it’s good to know that there’s at least one country where it’s easy to incorporate a business and start a new international experience. Explains Castillo, “Panama is a unique country because it makes it possible to register a business in approximately two weeks and it is not necessary to be physically in the country during or after the onboarding process. In fact, several high-profile entrepreneurs have never visited the country, but have managed to build successful businesses globally and record hundreds of millions of dollars in profits.”

Directors, shareholders and company officials can be of any nationality when registering the business and can live in any country in the world. Accounts do not have to be submitted to the government, and business board meetings do not have to be held in Panama, offering significant advantages for international companies.

The additional benefits of registering in the country are that owners may remain anonymous, your company’s goals do not have to appear in the Articles of Incorporation, and secrecy laws mean that account information cannot be disclosed to third parties, offering an anonymous trading environment in which you can trade freely without reporting on activities.

In addition, the process for obtaining a visa in Panama is simple and timely, and the country actively welcomes people of all nationalities. Indeed, during its World Youth Day 2019, the government hopes to attract more than 200,000 young people to the country and place Panama on the world map of millennial expats. As a country that relies on immigration for growth and development, it is clear that Panama works hard to build a diverse citizenry that not only helps innovate in the country, but also fills a gap in skills and fosters local entrepreneurship.

One of the most common reasons why incorporating your company in Panama is due to its territorial system, where income earned outside the country is tax-free. “For a business that has centers in several Latin American markets, Panama is the perfect offshore tax destination that allows companies to maximize their profitability and reduce the amount of taxes they pay. Of course, some warnings must be taken into account,” says Castillo.

With so many new Latin American companies placing the territory on the world stage, there has never been a better time to start a new company in Panama. Thanks to its growing tourism sector, endless real estate projects, increased agricultural exports and an impressive banking and financial sector, there are several key industries to consider when expanding to Panama. In addition, the Panama Canal places the country in a unique position as a hub of international trade connecting the Atlantic and Pacific Ocean, bringing quality imports from all over the world.

Making use of the country’s strong economy, low taxes, low barriers to entry and stable governance will help you succeed in your international expansion plans. Whether you’re a million-dollar business founder or a shiny new company, now might be the best time to consider Panama.

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