Many investors are interested in Panama. During the first half of the year the (gross internal Product) reached a 9.4 growth, and the production of goods and services has been the most beneficial, compared to last year. Due to this activity, investors are branching out and considering their options in this country.
Activities such as, the commercial activity in the Colon free zone, the tourist activity, construction, bank activity, house property, the air transportation, the services exported by the Panama Canal, fruits and cattle(meat) exportation and the port activity, have shown an important dynamism this year, motivating to come and invest here.
Construction in Panama has reached a very important growth during the lasts years, because of
the development of many residential and tourist projects that have become a good business
opportunity for those who decided to invest in the construction in Panama. As a consequence,
Real Estate has also reached good sales and acquisition levels. *see real estate-projects section*
Tourist activity, is showing an increment due to the growth of the amount of visitors and the
internal tourism that is taken place in the lasts years.
Panama has a consumption society, interested in innovating products, which allows investors to
bring new ideas and commercialize them with good probabilities of succeed.
The exportation is another item that has experimented growth in the lasts years, due to the Free
Trade Treaty - TLC - (Tratado de Libre Comercio) that has been signed with many countries;
Panama is having the opportunity to export its products at ar lowe price than it used to be before.
INVESTEMENT AND INCENTIVES FOR INVESTORS
Panama has created incentives and benefits for individual investors or companies that promote the tourist activities in the country. Law No. 8 of June 14 1994 is the main law which goal is to encourage investors to develop the tourist industry:
Stimulated activities
Construction, rehabilitation and equipment of establishments that are destined to offer tourist
public lodging, restaurants, parks, zoological, eco-touristical centers.
Acquisition of equipment of terrestrial, marine and aeria transportation dedicated exclusively to
the tourist activity.
Restoration, maintenance and National and Municipal illumination of the Historical Monumental
Sets, National Parks and (municipals).
Investment in bond purchase or actions in favor of tourist companies that settle outside the
metropolitan area.
Investment in activities of films shooting or sport events that promote the image of Panama
abroad.
* National or private properties can not be acquired by investors when located less than 6.25 miles from the border. Concessions of islands, lands and landfills owned by the estate, can be granted as long as the same ones are destined to develop tourist activities.
Incentives for Investors
1.-Fiscals
For activities of construction and equipment of public tourist lodging, the following fiscal incentives will be granted:
Exoneration of the import taxes for a 20 year term.
Exoneration of real estate taxes for a 20 year term.
Exoneration of all taxes over its capital (for the company)
(Exoneration payment for taxes for a ports, wharf and any rate on landing in any wharf or port,
airports or heliports constructed by the company)
Exemption of the payment on income taxes caused by themmmm interests that yield the creditors
in operations destined to investments on places of public lodging.
For the calculation of the depreciation of the real estate a 10% rate annually will be allowed,
excluding the land value.
In Tourist
Development Zones:
Exoneration of taxes on the building for a 20 year term.
Exoneration of import taxes for a 20 year term.
Exoneration of taxes including ITBM for a 20 years term.
Exoneration on the taxes of the interest that yield the creditors.
Tourist transportation
Exoneration of 100% on the taxes for introduction of any kind of transportation vehicle destined to give the service for tourist activities. Investment on the Historical monumental sets The total amount that investors have established for maintenance, restoration and illumination of the Historical Monumental sets will be deductible. Investing in any movie production and sport events that promote the touristical image of Panama.
Tourism Certificate of Employment (CET)
Any company that is dedicated absolutely to tourism and that is developed in the metropolitan area might receive a Tourism Certificate of employment of as long as the company does not accept benefits from other organizations.
Tourist Investment Bonus 50% of the amounts that are invested in the bond purchase or actions
of a tourist company is considered tax deductible.
Procedure
The companies should present their request to the Instituto Pameρo de Turismo IPAT - Panamanian Institute of Tourism, which will have a 60 days term to accept or reject it. Once the request is accepted by the board of directors of the IPAT, the company will be register in the National Register of Tourism, and the incentive process will start to be effective.
Incentives
Colon free zone exonerations: The Colon Free Zone offers an exceptional tax free
system on imports, re-exportations, manufacture and other activities; low costs for land and store
space; Lease Back System or recognition of the investment; protection and guardianship of
intellectual property rights; automated future commercial operations.
The import of Raw material and packages used by the local pharmaceutical industry to produce
medicinal products is exempt of 5 % ITBM taxes.
Exoneration of tax payment and custom payment when introducing equipment, spare parts and
materials used development of mining operations.
There are also incentives for the
Processing
Specialized and General Services
Assembly (or maquila)
Manufacturing
Petroleum free zones:
According to the Tax Code, crude oil, petroleum and derivates will be introduced into the petroleum Free Zones without having to pay taxes, fees, levies and other duties related to their importation, exportation or re-exportation. They may also be transferred without having to pay taxes, fees levies and other taxes.
Crude oil and products derived from petroleum introduced into the Petroleum Free Zones may come out tax-free of the aforementioned areas for the following purposes:
When used for exportation and re-exportation.
When imported to be used or consumed within the territory of the Republic of Panama.
When its finality is to supply (sale or delivery) the contractor or users that operates legally in a
Petroleum Free Zone
When its finality is to be sold to the ships that pass through the Panama Canal with destination
to foreign ports.
When its finality is to be used by airplanes that use the national and international airports that
operates in the Republic. As long as the international quality requirements are fulfilled
When being sold to companies of generation of electricity for public utility, as long as it is
authorized by the Regulating Entity for Public Utilities.
When being sold to official entities of foreign governments or international entities that have the
right to import goods exempted from importation taxes into the republic of Panama.
