The Republic of Panama with tropical climate all year around, a population of approximately 3,5 million and a continued stable democratic government, has an area of 78,200 sq km.

Comparatively, Panama is slightly smaller than the state of South Carolina (USA). Panama is located in Central America bordering both the Caribbean Sea and the Pacific Ocean neighboring with Colombia and Costa Rica.

It’s history is fascinating and Panama’s name is often indicated as ̈Abundance of Butterflies ̈ in the indigenous language. Initially Panama was inhabited by several indigenous tribes prior to settlement by the Spanish in the 16th century.
However, in 1903 with the support of the United States, Panama was purchased and separated from Colombia and consequently the Panama Canal was constructed and completed in 1914 by the U.S. Army Corps of Engineers.
In December 31, 1999 Panama Canal was transferred from the USA to Republic of Panama.

Panama’s economy, because of its key geographic location, is mainly based on a well developed sector such as commerce, tourism, and Free Trade Zone trading as well as substantial revenue from the Panama Canal. For example, revenue from Panama Canal tolls continues to represent a significant portion of Panama’s GDP, although commerce, banking, and tourism are among the major growing sectors.

Since 2010, Panama remains the second most competitive economy in Latin America, according to the World Economic Forum’s Global Competitiveness Index. Panama’s economy has been among the fastest growing and best managed in Latin America. Needless to say, US dollars are legal tender and used for all paper currency and because of the tie to US dollars, Panama traditionally has had low inflation to-date.

According to the Economic Commission for Latin American and the Caribbean, Panama’s inflation in 2006 was 2.0% as measured by weight Consumer Price Index (CPI).

The expansion project of the Panama Canal, combined with the conclusion of a free trade agreement with the United States, are expected to boost and extend economic expansion of Panama for the foreseeable future. However despite Panama’s upper-middle per capita GDP, it remains a country of stark contrasts.

Perpetuated by dramatic educational disparities, over 25% of Panama’s population lived in national poverty in 2013 and 3% of the population lives in extreme poverty, according to latest reports by the World Bank.

According to the Tourism Authority of Panama (ATP), over 2,200,000 tourists visited Panama in 2012 and this number has increased since then. In recent years Europe, Canada and USA have become the key markets to promote Panama as a tourist destination as well as investment paradise for international investors as well as retirees..
In addition, over the past 7 years due to government tax and price discounts to foreign guests and retirees. These economic incentives have caused Panama to be regarded as a relatively good place to retire in the world. Real estate developers in Panama City as well as Pacific Ocean region from Coronado to Rio Hato & the Caribbean have developed many ocean- front condos, hotels and resort projects due to the increasing appetite of visitor interest.

Panama’s Law No. 9 is still the most modern and comprehensive law for the promotion of tourism investment in Latin America and the Caribbean. In so-called Special Tourism Zones, Law 8 offers incentives such as 100% exemption from income tax, real estate tax, import duties for construction materials and equipment, and other taxes. Panama has declared different parts of the country as Special Tourism Zones which are benefited with multiple tax exemptions and tax holidays.

The high levels of Panamanian trade are in large part from the Colón Free Trade Zone, the largest free trade zone in the Western Hemisphere. Last year the zone accounted for 92% of Panama’s exports and 64% of its imports, according to an analysis of figures from the Colon zone management and estimates of Panama’s trade by the United Nations Economic Commission for Latin America and the Caribbean. Panama’s economy is also very much supported by the trade and export of premium gourmet coffee grown in Bouqete region of Panama and other agricultural products such as teak woods.

A Panama – United States Trade Promotion Agreement (TPA) was signed in 2007, approved by Panama on July 11, 2007 and by US President Obama on October 21, 2011, and the agreement entered into force on October 31, 2012.

Covering around 40 percent of its land area, Panama’s jungles mostly located in Darien are home to an abundance of tropical plants, animals and birds – some of them to be found nowhere else in the world.

Panama is considered the most important international banking center in Latin America with over 200 international banks operating in Panama as of today with assets of over $100 billion.
Even though Panama’s banking center has allegedly been the main money laundering point for proceeds from international drug-trafficking in the past, in the recent years Government has implemented much more strict rule to reduce money laundering practices.

Overall the government of Panama encourages industrialization by granting special tax concessions to new enterprises and imposing protective duties on competing foreign manufacturers. The Industrial Development Bank, equivalent to the US Small Business Administration, promotes small industries and facilitates credit on a longterm basis.


The Republic of Panama is perhaps the ideal destination in the world for anyone looking for serious financial opportunity in real estate, privacy and lower taxes, corporate or personal. Its proximity to the growing emerging Latin American market makes it a natural base for world business operations

Spurred by major government infrastructure projects (the completion of the expansion of Panama Canal in 2015-16, the construction of Line 2 of the metro rail system, Metro Bus, New International Airport in Rio Hato, the port of Colon upgrade, etc.), and by a continuing investment and tourism boom, residential property prices rose as much as 10% in 2013.

There has been a strong demand and investment in-flows from countries such as US, Canada, Europe, Venezuela and Colombia that has boosted Panama economy and real estate market.

We think the newly elected president Juan Carlos Varela in May 2015, promises continuity, and much more needed political stability for Panama in the next 5 years while we believe ratio of corruption would be drastically reduced.

Then there is the wealth represented by the Panama Canal. According to the Panama Canal Authority, its operation in 2013 alone, generated $1.87 billion in total revenues. The Panamanian economy is considered the most prosperous economy in the region and we foresee the same continue in the next decades to come.

There are thousands of acres of undeveloped ocean- front land in the Pacific ocean as well as Atlantic ocean side that is considered Top Prize Real Estate with an estimate value of over $6. billion.


Courtesy of InsidePanamaRealEstate