INSIDE PANAMA GUIDE BOOK

“YOUR E-BOOK TO DISCOVER PANAMA”

INTRODUCTION

Panama is going through a major transition. With a fast-growing economy, a strategic logistical location, booming trade, and tropical climate, Panama is becoming one of the most popular places to relocate in all of Latin America. But relocating, whether for business or pleasure, can be a tough transition if you’re not prepared. There are certain things you should know before you make the move, and certain steps that you’ll need to take. At Inside Panama Real Estate, our goal is to assist you in making this experience fun, educated, and easy, through our valuable knowledge in local procedures.

This E-book will be your beginner’s guide to relocating to this wonderful country. We will explain the steps you need to take in order to get through the processes. In this guide, specially created for you, we will cover the following important subjects:

• Relocation Checklist• Buying & Renting Real Estate• Education• Medical care• Visas and Immigration Requirements• Employment and Labor Requirements • Taxes• Banking

And much more…..

1. Research Panama Immigration Visas.Panama has lots of options for permanent residency visas, including visas for retirees, investors, businessmen, and even citizens of 50 “friendly nations”. While Panama’s embassy and consulate websites can provide some basic information, it is best to find a qualified Panama immigration lawyer to go over specific visas and find out what’s the best for you. Further down this E-book we will explain all the available visas in detail.

2. Research Customs Duty and Taxes.If you’re planning on shipping anything during your move, you’ll need to find out how much it will cost in duty fees and taxes. You can check this online via Duty Calculator Online: http://www.dutycalculator.com/country-guides/Import-duty-taxes-when-importing-into-Panama/

3. Medical Health Insurance.Check with your healthcare provider to see if you are covered internationally, and for the duration of your stay. If you are planning on relocating permanently, you should consider local insurance, unless you work for a company that already provides health insurance with coverage in Panama.

Before relocating to Panama:

A checklist of things you need to do!

4. Make Sure You Have Your Important Documents in Order.

Before you apply for a Panamanian immigration visa, you’ll need to have a number of documents apostilled in your home country. This typically takes about three months to process, so it’s best to be prepared.These documents could include: F.B.I Report· Marriage and birth certificates· Passport, naturalization document, green card, proof of citizenship, etc.· Social security cards· Vaccinations, dental and medical records· Insurance policies· Academic records and diplomas· Employment records· Proof of residency (utility bills with your name and address)· Driver’s licenses· Original reference letter from your bank (two banks would be better) addressed to a specific Panamanian bank and signed by a bank official. An Apostille is an internationally recognized method of authenticating government issued documents such as birth and marriage certificates and driver’s licenses. In the U.S., a state’s Secretary of State Office can do the Apostille.

5. Notify Your Bank.

You’ll most likely keep a bank account open in your home country even after a move to Panama, especially for the first few months while you are settling in. Make sure you notify your bank, and let them know your plans to relocate and that they can expect future transfers to be made to Panama.

6. Bringing Pets to Panama.

Like anything else, there’s a process for transporting your pets, but it is fairly straight forward whether you are coming from Canada, the U.S. or anywhere else in the world.

See the Pet Immigration process: http://www.insidepanamarealestate.com/blog/bringing-pets-to-panama.htm for more information.

7. Moving & ShippingAn international shipping company will help to provide all the correct paperwork for shipping your household belongings to Panama. Keep in mind the rules of packing when you are preparing to move. Make a detailed packing list in either English or Spanish and include the value of each item. This document is required to ship to Panama, and it will help the cargo shipping process run smoothly and quickly.

Shipping costs can vary depending on the shipping mode of transport, weight of goods, and the Service Company hired. Do some price comparisons and re-search in order to find a suitable option. If you’re shipping large containers or cars, you will most likely pay a significant import tax.

Many expats tend to ship less items, and replace them locally, it can save you a lot of money in the long run.

8. Vehicle InsuranceIf you buy or import a vehicle in Panama, you’ll need to have local insurance coverage. Car insurance is affordable in Panama, and there are a number of coverage options depending on your budget. Cars made in the year 2000 or newer can be insured for Full Coverage; civil responsibility (personal injuries and damage to foreign property), medical assistance, and coverage for the insured vehicle (collision and comprehensive).

If you import your vehicle from a foreign country to Panama include the entry taxes as part of the value of the car.

If you are financing a car, banks will require you to have a full coverage policy.

Your insurance policy has roadside assistance included! This covers jump-starts, towing, a tire change, or gas delivery (gasoline costs are not included).

Buying or Renting

Panama real estate rentals and sales have been growing at a steady rate. Demand has remained high, and supply is keeping up with pace as high-rise construction cranes are a constant in the city’s skyline.

If you haven’t been to Panama previously, we recommend you rent first, for about 6 months to a year, and find out what’s right for you. There are so many possibilities for both renting and buying, and it’s best to do your research before making any big decisions.

If you buy instead of rent, you have a large range of prices, all depending on the age of your building, neighborhood, amenities, and size. Buying a nice, new condo will cost anywhere between $250,000-$450,000, with ultra luxury places going for $1,000,000 and up. Houses are on the same scale, but usually offer more m2.

It’s important to remember to do your due diligence before committing to buying or renting property in Panama. You can contact us at Inside Panama prior to you move, to make sure you get to know the market and your options.

One of the most important factors in deciding where you want to live and work is the cost of living. How much you have to spend factors into how much you need to make, what type of lifestyle you can afford to live, and where you’ll need to live. This is especially true if you live on a fixed income like most retirees.In Latin America, prices can change pretty quickly. Luckily for Panama, inflation is low and stable, and the US Dollar is the official currency, but that’s not to say that prices don’t rise and fall from time to time.

Location, Location, Location!

One very important aspect of relocating to Panama, or any country, is choosing the right location to live. While Panama has many diverse living options for every budget, we are going to focus on popular areas that are ideal for relocation, and

cover the different price ranges and lifestyles, separating Panama into three main regions: CITY - BEACH - MOUNTAINS.

Panama City is by far the most populated place in the country, holding roughly 40% of the country’s entire population. It is also the business, political, and banking center of the country. This means that unless you’re retiring or working in tourism, chances are you’ll be relocating to Panama City. While not necessarily as physically big as many other capital cities in Latin America, Panama City is a busy metropolis with lots to do. There are also some great neighborhoods, and plenty of available real estate. From modern luxury to chic and antique, the city has it all.

PANAMA CITY

The cost of renting or buying in Panama will entirely depend on where you live. In Panama City, there is a huge market, and plenty of options.All the new buildings come with lots of amenities like; pools, gym, sauna, 24 hour security, indoor parking and sometimes even convenience shops on the ground floor..

PANAMA’S BEACHES

Panama’s beaches are very popular for tourism, but have also grown as key residential areas in the past few years. When it comes to beaches in Panama, you truly have everything you need. From white sand Caribbean beaches, deserted islands, and surf towns, to suburban developments, Pacific villas, and condos, there is a great selection of different lifestyle choices.

Following are the most popular beaches amongst expats who relocate.

The Coronado area

Coronado is probably the most popular beach location for expats, due to its location, amenities/services, and quality of life. It is a very modern town with lots of luxury developments right on the Pacific Ocean. There are a couple of major shopping centers at the town’s entrance, and a number of very good restaurants and bars in town. Coronado is about an hour’s drive from Panama City, which makes it a quick drive into the capital if you need to be there for work or pleasure. Sales and rentals are very popular, as far as real estate, with a typical house going for $300,000 and up. You’ll need a car, as public transportation will only take you along the highway, but taxis are available to take you into Coronado, and are very affordable as well.

Bocas del Toro

Bocas del Toro -or ‘Bocas’, is one of Panama’s biggest tourist attractions, and for good reason. It’s a unique archipelago that borders with Costa Rica on the Caribbean coast, with its lush tropical vegetation, fauna only found in this part of the world, and opportunities for diving and snorkeling.

It’s a very popular location among the expats who want to live off the grid. Most properties are rustic and basic with classic colorful Caribbean architecture, many island houses are built on stilts over the crystal clear, turquoise waters. If you are looking for luxury, it is available, as developers have started focusing more on this beautiful area.

“Do more of what makes YOU happy!”

Pedasi & Playa Venao

Pedasi is the newest ‘hotspots’ for foreign relocation, especially amongst North Americans and Europeans. From Panama City it takes approximately 4 hours by car, but there are also short flights available to its own small regional airport.

Pedasi is popular for its natural beauty and classic “beach town” feel. It also has a lower cost of living, with rentals and sales about 20-30% cheaper than Coronado. It’s a vintage beach town, with far less commercialization than the beaches closer to the city. You will find a number of good restaurants, boutique beach hotels, and local Panamanian shops, which make this a great place to absorb small town Panamanian culture.

Playa Venao is famous for it’s great surfing all year round! It has become a favorite destination from people all over the world! Major developments are underway on one of Panama’s best beaches!

Mountain Towns

Boquete is a small town in the Chiriqui mountains. It’s got a great community of locals and expats who strive to make it a friendly location.. It offers many seasonal cultural events, including an annual Jazz Festival, and offers lots of activities for nature lovers.

Because of the vibrant expat community, many in Boquete speak English, making it easier for non-Spanish speaking visitors and residents to adjust. You will find many great local businesses that cater to an expat community, as well as services that are offered towards retirees.

As far as housing, you can buy a nicely finished 2-bedroom house, starting around $200,000. If you’re looking for something a bit bigger, and higher-end, you can get a villa starting around $300,000-$400,000. It’s also a great place for renters who choose not to buy, or need an intermediate place before buying.

El Valle is beautiful mountain town, located just 45 minutes from Coronado. Once a crater lake, this quiet village became home to local Indians from the surrounding mountains who have been here for thousands of years. There is much to see and to do in this special micro-climate with its cloud forest and exotic animals and plants. The area around the charming town is also known for being one of the last habitats of the critically endangered Panamanian golden frog.

Because of its elevation (600 m), it is cooler than the Panamanian lowlands, explaining why many expats relocate to this picturistic town. With only an hour and a half drive, you are close to Panama city, which makes it a very pleasant and convenient location.

This is a very important factor when moving with children. While the public school system in Panama is severely lacking in resources, there are a number of private schools that rival any of their contemporaries in North America or Europe. Tuition fees can range anywhere from $1000 - $3,000 per year, or $100 - $300 per month, depending on the school. Most schools follow either the North American September-June schedule, or the Panamanian schedule of March-December. There are many top private schools that teach exclusively in English, but you can also find schools with a bilingual option, with the idea that your children will learn Spanish.For more information about schools in Panama, check out our Blog post on different schools here in Panama:

Five Stars AcademyPCIS GorgonaBoquete International School

Choosing the right school in Panama

College and higher education

There are many university level education options in Panama, but very few universities offer transferrable credits to U.S. universities. The two most popular US-equivalent universities are Quality Leadership University, and Florida State University-Panama. So if you are studying, or have a child studying in a North American university during your move, transferring credits and degrees shouldn’t be an issue. There are also some other decent local universities, including the University of Panama, and the Technological University of Panama.Tuition fees vary depending on the student, scholarships, and public education aid, but generally you will pay anywhere from $200-$1,000 per month, plus books.

Medical insurance in Panama will cost anywhere between $45 and $120 per month for comprehensive coverage from an international provider, which can contribute to huge savings compared to some U.S. health plans.

If you decide for no insurance coverage, there is free medical care for Panamanian residents, but, at best you may have to wait a few extra weeks for an appointment and may not get the same specialized attention you receive at a private facility.

Private hospitals in Panama can offer excellent care, for example, Punta Pacifica, located in Panama City, is considered the most technologically-advanced hospital in Latin America and is affiliated with the Johns Hopkins Hospital, they provide a very high level of service.If you plan to pay out of pocket at any of the high-end private hospital in the city, expect a doctor’s consultation to cost between $40-$100.ER visits can range in price depending duration and the services offered, but it will cost a minimum of $100 to see a doctor in the ER, not including any tests. Dentists are also cheaper than in the U.S. with a typical teeth cleaning running between $30-$50.

Medical healthcare

Panama has many options for transportation, and all of them when compared to the US, Canada & Europe, are very affordable. Public transportation, namely buses and the subway, cost less than $0.50 cents a ride. Both are new and clean, however getting schedules and exact destinations can be difficult, so many people prefer to take taxis.

Taxis have no meters, so cost is negotiated based on distance, time of day, and traffic. This can get confusing, and frustrating, but if you learn the general fares from place to place, you’ll find it easier to get to the right price.

On average, a cab from any point in the city to another shouldn’t cost you more than $5. Often, it’s as low as $2-$3, but be prepared to share your ride with others, and allow extra time if you’re on a tight schedule.If you’re willing to spend a little extra, there are also some great private car/cab services like Uber and TuChofer which run off mobile apps.

Public transportation

General idea of expenses

Living expenses can range depending on how you choose to live, and what you want or need to live comfortably.

To give you a general idea of what life in Panama will cost per month, we will show you three examples of what you can expect on different budgets

Low-Cost: Just covering the basics, living humbly but comfortably, eating most meals at home, using public transportation.• City: $1,500 per person• Beaches: $1,000 + per month• Mountains/Rural: $1,000 + per month

Mid-Level: Living in your own home/apt. rental, having residential services such as pool/social area, eating out 6-8 times per month, owning a car.• City: $2,500 per month• Beaches: $1,500 + per month• Mountains/Rural: $1,500 + per month

Luxury: Living in a large, finely furnished home/apt. rental, full-time domestic worker, high end residential services such as in-building restaurants, concierge, eating out for about half of your meals, owning a luxury vehicle.• City: $4,000+ per month • Beaches: $3,000 +• Mountains/Rural: $3,000 +

Entertainment in Panama

Panama is full of vibrant life, and as a result, has everything you’ll need for entertainment to keep you busy. The city is as modern as many in North America, and full of great shopping, restaurants, museums, parks, and other cultural events. There’s also plenty to do outside of the city, including adventure tourism, surfing, fishing, and even jeep jungle tours. Whether it’s a quiet afternoon in the park, or a fun night out on the town, you can find it almost anywhere in Panama.

Holidays and Cultural Customs

Panamanians love holidays, and many are marked by festivals, family gatherings, and outdoor parades and parties. By far, the most popularly celebrated event is Carnival.

Carnival is celebrated over 4 days, typically in mid-February, but sometimes as late as the first week of March, depending on the year. Carnival is celebrated nationwide, and nearly every non-essential employee will have time off during these days. The most traditional Carnival celebrations take place in the towns of Las Tablas, Penonome, and Chitre, with an ever-growing outdoor celebration that takes place in the city on the Cinta Costera.

Much like Carnival, nearly every Panamanian holiday, including the religious holidays, are marked by vibrant music, BBQs, and parades.

Even Christmas is celebrated with fireworks and outdoor parties, with many people going out into town after midnight. It is also customary for many city residents to head to the beach or other towns in the interior during the holidays, so countryside traffic can get pretty heavy during this time.

Another cultural observance to take note of in Panama, is their recognition of patriotic holidays in the month of November. In Panama, they observe the Independence from Spain, Independence from Colombia, Colon Day, and Flag Day. Each holiday is federally recognized and almost everyone has the day off. These holidays all gather in the month of November, which makes it a popular month to take vacations for both locals and expats.

VISAS and IMMIGRATION

It is important that you take the proper legal steps through immigration. Luckily, Panama has a number of residency visas available, 8 in total, and the process can be pretty simple if you have the right preparation, and a knowledgeable immigration attorney to help you with the paperwork. Following are the types of Panama’s residency visas, and what you’ll need to provide to get them.

BENEFITS:50% off hotels and entertainment. 30% off public transport. 25% off airline tickets and utilities. 15%-25% off all medical services. Tax free imports on household goods up to $10,000, including a new car every 24 months.DURATION: 3 MONTHS TO 1 YEAR

Requirements: You must be at least 18 years old with a lifetime annuity or pension paying a minimum of $1,000 USD per month + $250 extra per dependent.

INVESTMENT/COST: $1,000

BENEFITS:Citizens of the 50 friendly nations get fast track permanent residency that leads to full citizenship in 5 years. Work permit also made available.DURATION: 1 YEAR

Requirements: Start a new business in Panama, purchase an existing Panama business, or be employed by a Panamanian company in a professional capacity. Deposit $5,000 USD in a Panamanian bank + $2,000 per dependent.

INVESTMENT/COST: $5,000

Retirement Visa Friendly Nations Visa

BENEFITS:The ability to relocate to Panama and work in a professional capacity.DURATION: 2 YEARS

Requirements: Be employed by a Panama company as a professional.INVESTMENT/COST: FREE

BENEFITS:You can obtain citizenship in 7 years while making a profit when the forests are harvested.DURATION: 2-6 YEARS

Requirements: You must invest at least $80,000 USD by purchasing 5 hectares in a government certified reforestation program.INVESTMENT/COST: $80,000

Professional Employment Visa Large Reforestation Investors

BENEFITS:Investors can obtain Panama citizenship in 7 years.DURATION: 2-5 YEARS (TEMP.)

Requirements: 3 options are available: (1) Invest at least $300,000 USD in a 3 year Panama bank CD; or (2) Purchase titled Panama real estate with equity of at least $3000,000 USD; or (3) Combine options 1 & 2 by making a Panama bank CD deposit and purchasing Panama real estate totalling at least $300,000 USD.INVESTMENT/COST: $300,000 +

BENEFITS:Chance to became a permanent resident after three 2-year temporary resident visas.DURATION: 2 YEARS

Requirements: Minimum $160,000 investment in capital stock of a Panamanian corporation + $2,000 per dependent. You must be a shareholder or officer of the corporation, hire 5 Panamanian employees, and register with social security.INVESTMENT/COST: $160,000

Self Economic Solvency Visa Business Investor Visa

BENEFITS:This is a fast track towards permanent residency leading to full citizenship.DURATION: 2 years

Requirements: A consensual partner of Panamanian birth or citizenship.INVESTMENT/COST: FREE

Parents of a Child Born in Panama

BENEFITS:Permanent Residency.DURATION: permanent

Requirements: The child born in Panama is at least five years old at the time the mother and/or father apply for residency.INVESTMENT/COST: $1,330

Marriage to a Panamanian Citizen

Doing Business In Panama

Doing business in Panama can be very different than you’re used to, if you’re not prepared. The potential for success is here, if you take the right steps, and understand local laws and procedures. Executive-level business culture is very internationally oriented in Panama, which means a high level of professionalism at an international standard. However, in doing business on a smaller scale, there will most likely be a bit of a transitional period to adjust to a new cultural way of doing things. Establishing a successful small business, or working for a large one, can have unlimited potential.

Panama is a great place for foreign investment, many people are deciding to either move their business here, or start a new one.

If you are looking to start a business in Panama, there are many options for many different budgets and sizes. Whether you’re opening a small business, big business, or franchise, you’ll need to register and name your company under a set of guidelines. There are a number of ways to do this, and before starting out, you’ll need to know where your business fits in.

Panama offers many unique benefits for doing business, which typically revolve around tax incentives, banking privacy, and ease of forming an anonymous Panamanian corporation.

For example, non-resident Panamanian Corporations (Panama IBC’s) and Private Interest Foundations do not pay tax on income earned abroad.

Panamanian corporations and individuals do not pay capital gains tax (except on sales of real estate located in Panama).

It’s no secret that one of the biggest draws to Panama for starting a business, or opening an offshore bank account, are the great tax benefits. Basically, the only income that can be taxed on your business is for goods or services sold in Panama.

Services and products created in Panama, yet sold in the exterior of the country are untaxed, making it an ideal country for many different types of offshore companies. In other words, taxable income is derived from subtracting foreign source income and exempt income from the gross income.

Mistakes to avoid when starting a new business.

One of the common mistakes is to start operating without incorporating or without all the required permits, which can result in issues at the moment of an inspection by the local authorities. The business needs to be setup with proper accounting and invoicing systems that are approved by the Panamanian government to keep up with the sales taxes that have to be paid each month to the national treasury.

Finally, a common mistake is that many small business start-ups don't take advantage of certain business and tax incentives that they have available by becoming members of the Small Business Association (AMPYME).

There are many different types of brick and mortar businesses, so what you need to start can vary. The requirements can be different for certain types of business activities that have special regulations, however, in general the procedure would be to set up a Panamanian corporation, get a business operations permit through the Ministry of Commerce & Industry (federal business permit and tax ID), register the company with the municipal authorities (municipal operations permit), and for any business selling food or beverages to the public they would need to obtain a sanitary permit through the Ministry of Health. The entire process could take anywhere from a few weeks to a few months depending on the type of business activity.

Different Ways to Set Up a Business

Setting up a corporationTwo people called “subscribers” create a Panama corporation by filing the Articles of Incorporation with the government’s Public Registry. After the Panama corporation is registered, a minimum of one shareholder is needed.

Panama General Partnership General Partnerships are recognized in Panama and are called “Asociacion General”. The problem with this type of partnership is that a civil court can hold all of the partners liable if one of them is negligent or fraudulent during the course of conducting business on behalf of the partnership.

Panama Limited Partnership Panama recognizes Limited Partnerships called “Sociedad de Responsibilidad Limitada” (SRL). Between 2 to 20 partners from any country can form the limited partnership. The capital can range between $2,000 USD to $50,000 USD. Every member’s name is filed with Panama’s Public Registry along with his or her capital contribution. While a General Partnership requires meetings to be held, if there are five members or less no meetings are needed. The partners’ civil liabilities are limited to the capital contribution.

Panama Civil Partnership Panama also recognizes a Civil Partnership called “Sociedad Civil”. Partners are subject to unlimited civil court judgment liability. This is a common partnership for Panama professionals like doctors, attorneys, and architects.

Panamanian Business Name Once you have decided on the type of entity to own the Panama business, a unique business name must be selected. Panama’s Public Registry will contain all of the Panama corporations along with their company’s business name. The same goes for Panama partnerships.

Time Frame For Opening a Business This is tough to gauge because there are many variables that can expedite, or delay, your time frame when opening a business. The most important thing is to be patient, and persistent with your goals. It can take from 1 hour to 1 week, depending on a number of variables. For example, there are ready-made corporations that one can purchase that are immediately ready to begin utilizing. Otherwise, for a newly formed corporation, it generally takes about a week to incorporate.

Time Frame for Opening a Business

There are many things that can expidite, or delay, your time frame when opening a business.

The most important thing is to be patient, and persistent with your goals.

It can take from 1 hour to 1 week, depending on a number of variables, for example; there are ready-made corporations that one can purchase that are immediately ready to begin utilizing.

Otherwise, for a newly formed corporation, it generally takes approximately a week to incorporate.

Starting your own business will also require a lot of preparation as far as labor laws, and knowing what regulations and procedures you’ll need to take when hiring employees.

Here are some of the basics.Panama law defines “employment” based on the circumstances,and whether the person is subordinate or dependent economically to the person who hired him. This means a boss/employee relationship with regular checks/payments and mandatory hours/days for the work to be performed. A true independent contractor has little or no supervision and can work at any hours or day until a project or task is completed.

If you decide to start a business in Panama, or are hired to be a part of another company, it’s important to know the local labor laws. Getting hired as a foreigner is a harder process than for a local, however many companies will help facilitate the process of fulfilling legal labor requirements, should they contract you to work with them.

Wages & Taxes

Panama’s minimum wage is around $3-$4 USD an hour depending upon the location and job type. Employees in Panama City can earn a little more than workers performing the same duties in other parts of the country; however, national labor laws do set a standard minimum. These minimums change from industry to industry, so it’s best to check with the department of labor to see how your business fits within the scale.Office workers earn a little more than day laborers and service industry professionals, however entry-level jobs tend to pay comparably across the board. Management positions demand approximately $1,000-$4,000 depending on the job and size of the company. Nearly every worker is paid on the 15th and 30th of every month.

Wages are subject to income tax, social security tax, and an education fund. After the first week, employers must withhold these taxes from employee salaries. The government revenue office has charts showing what percentages are required to be withheld. All withholdings from the prior month are required to be paid into the National Treasury through the Social Security Administration by the 15th of the month.1. Dental, medical and hospital coverage; 2. Disability pay;3. Maternity leave;4. Worker’s comp;5. Retirement pensions; 6. Death benefits; 7. Funeral funding.

Economic Opportunities

In just over 10 years, Panama has doubled the size of its economy. The World Economic Forum ranked Panama as the 2nd most competitive country in Latin America and the Caribbean. It has averaged between 7-10% growth annually over the past ten years, and predictions are that this trend will continue, and be sustainable for the extended future. Due to the Canal expansion, many economists predict up to double-digit average growth over the next 5 years. By most estimates, despite already being in a current boom, the best days are yet to come when it comes to the Panamanian economy.

Panama is also home to the Colon Free Trade Zone, which is the region’s largest, and busiest duty free zone. The Colon Free Zone attracts over 250,000 visitors per year, and is home to nearly 2,000 companies. Imports and exports in this zone are bought and sold tax free, and it’s considered the gateway to global trade in the Americas.

Besides the Free Trade Zone, Panama has also established other tax incentivized business zones, known as Special Economic Areas, including Panama Pacifico and The City of Knowledge. Panama Pacifico was created to help drive foreign investment and attract new growth industries, whereas the City of Knowledge focuses on sustainable development and innovation. Both areas have attractive incentives that should be reviewed when considering to start a business in Panama.

Although individuals need to pay sales taxes on services and products purchased in country, you’re still only paying a flat 7% tax. Should your business provide goods or services within Panama, you must pay federal taxes, however they are scaled to industry and much lower than the US, Canada, or Europe.

Banking in Panama

Panama is one of the leading countries in Latin America for banking. There are approximately 100 different banks operating in Panama. These vary between high street banks, private banks and investment banks. Offshore banking is very popular in Panama. Among the popular banks are Banco General and Global Bank. International banks with a presence in Panama include Scotia Bank and Citibank.

There are different types of bank accounts available including savings, current and term deposit accounts. Interest rates will vary from bank to bank and most offer higher rates, depending on deposit balances. Banks in Panama offer high quality, efficient service, and all have modern facilities now.

Panama takes its banking secrecy laws seriously. Therefore, you are pretty much assured of the security and safety of your funds. Before you start letting go of your money and have it transferred to a Panamanian bank, make sure that the bank is reputable. You can always do your research online or better yet, you can ask the locals as to which bank they prefer.

When applying for a bank account, the bank representative may ask you for reasons on why you are interested in having a personal bank account. In many cases, since Panama is already considered a haven for foreign retirees, people usually state this as their main reason - relocation.

Banks are open Monday to Friday from 8.30 am to 4 pm, and on a Saturday from 8.30 am to 1 pm.

Personal vs Corporate Account

Having a personal account is definitely the first step if you plan on relocating with your business, or local employment. Corporate bank accounts are a necessity if you’re starting your business, but can also be created for purely financial reasons if you plan on investing offshore without physically relocating.

What to Do With Your MoneyMost Panama banks and brokers offer the same types of services that your local broker offers. They offer access to your account information and funds through Visa Credit Cards, Visa Debit Cards, ATM Cards, Checkbooks, and Internet banking or brokerage services. You can invest in CD’s (time deposits) with the banks, or invest in stocks, bonds, mutual funds, options, money markets, etc. on the markets you are used to dealing with (NYSE, NASDAQ, AMEX, Toronto, Vancouver, London, Hong Kong, etc.).

Bank Account Requirements

1. Photocopy of passport for each signatory. The photocopy of passport should be notarized, and must include the photo of the person, the personal details (passport number, etc.), the signature, and the most recent entry/exit stamps (if any). The photocopy should be clear and legible.

2. Two (2) Financial Reference Letters. The financial reference letters can be from any banks, brokerage firms, or credit unions. The letter should be on the financial institution's letterhead, and should include the signature of an official, and the contact information (address, telephone, fax, email, etc.). There is no specific format that the reference letter must be written in.

3. Two (2) Professional or Commercial Reference Letters. These reference letters can be from your attorney, accountant, financial consultant, or any company(s) that you have a business relationship with. The letters should be on the professionals (or company’s) letterhead and should include the signature of the professional (or company representative), also, their contact information (address, telephone, email, etc.). There is no specific format that the reference letters must be written in.

4. Tax Returns/Proof of Income. You’ll need to present legal tax documents for the previous two years from your appointment, in order to prove your income. These documents will need to be presented at your interview, and verified with your home country before the application process can be approved.

In some cases, people interested in putting their money in Panama establish private interest foundations to hold or serve as owners of their Panama corporations. The reason that they do this is because their local governments have what are called “Controlled Foreign Corporation Laws”, meaning that if they own shares of a foreign corporation, they are required to report it to their government’s tax authorities and pay tax on their portion of that corporation’s income.

However, if the foundation owns the shares of the corporation, then technically they do not own the corporation and are thus free of the reporting requirements. Some of the countries that have Controlled Foreign Corporation laws are: USA, Canada, Australia, New Zealand, United Kingdom, Germany, France, Spain, Italy, Norway, Sweden, and many more.

Private Interest Foundations

Relocating to Panama is a big move, no matter how you twist or turn it. Moving into a new culture and away from your comfort zone can be challenging, but it can also be a huge positive and beneficial experience.

If you do the right research, and take the proper steps to prepare, the relocation process can be smooth and exciting. With so much to offer, and so many ways to carve out the life you desire, Panama is one of the best locations to relocate too.

There really is something for everyone in Panama. You just need to know where to find it. Panama is experiencing major economic growth, and the timing couldn’t be better than now to make the move.We at Inside Panama Real Estate strive to provide the best practices to help your relocation experience run smoothly and comfortably. We will work with you for the entire process. Our goal is to make your move both a productive, and enjoyable experience.

Final Words From Our Team

Visit our Website: www.insidepanamarealestate.com

Give us a Call: +507 6756-5850 / +507 6245-6661

Contact us by Email: contact@ipreinfo.com