Live, Retire, Do Business In Panama

Top 10 Reasons Panama Is A Step Ahead Of The Rest Of Latin America

Oct. 4, 2010, Panama City, Panama: Panama is a step ahead of the rest of Latin America…for these 10 reasons.

Dear Live and Invest Overseas Reader,

Friend and international tax attorney Chris Rusch writes this morning to share his Top 10 Reasons Panama Is A Step Ahead Of The Rest Of Latin America...

#10 The Panama Canal...

a) Keeps Panama an important and relevant spot in Central America,

b) brings in jobs and investments (China),

c) brings in guaranteed cash each year, thereby stabilizing this small economy

#9 U.S.-Dollar-Based Economy...

Means that Panama has the most stable currency in Latin America.

#8 The Tax System, which is based on...

a) Taxing Panama-sourced income and

b) inviting international businesses that would not otherwise operate here by allowing them to operate free of corporate tax. This means more high-quality jobs for Panamanians and increased revenues for the government through employment taxes.

#7 The Stable Banking System...

When Stanford Bank collapsed last year, all branches and affiliates in all countries were closed. The only branch that has reopened is in Panama. This former Stanford division is back in business here in Panama City as Balboa Bank.

Also consider how many world-class banks are in Panama, including banks from the United States, Latin America, China, etc. Banks are putting their trading desks in Panama for tax reasons.

#6 The Size Of The Population...

Panama is a country of 3.4 million people, which means it is small enough to benefit from the canal income, improvements in education, and social programs and that it can operate on the U.S. dollar.

#5 The World-class Internet Connectivity...

Means Internet- and phone-based businesses (call centers, for example) can operate in Panama cost effectively and with confidence. Like San Francisco, Los Angeles, and New York, Panama is a primary link in the fiber-optic network. This is one of the reasons businesses like Dell are choosing to base themselves here.

#4 The Belief In And Focus On Education...

Which translates to a higher-quality labor force.

The Panamanian government recognizes the importance of education and has implemented several programs to train more of the population. One example is the English for Life program, a joint initiative by the government and the Universidad Latina de Panama, to improve English roficiency among high school and university students.

#3 The Strong Economy And The Patriotic Population...

Keeps the best and the brightest from fleeing to the United States when they get the chance. Many go to the States for school and then return to work in Panama after they've completed their studies.

#2 The Ever-improving Work Ethic When Compared With The Rest Of Latin America...

#1 The Entrepreneurial Mindset...

Which is absent in most of South and Central America.

Bonus Reason: I suggest that the greatest gift the United States gave to Panama was potable water. This has incalculable health and safety benefits. Of course, this is for Panama City. In other areas of the country, including in Bocas Del Toro, for example, this isn't the case.

Kathleen Peddicord

P.S. International tax attorney Chris Rusch has 10 years experience helping Americans abroad address their U.S. tax issues. His practice is focused on helping to prepare tax returns for U.S. citizens living or working abroad and on the formation of international businesses.

Chris currently divides his time between San Diego, California, and Panama City, Panama, where he has also opened a tax consulting office. You can reach Chris here with your international tax and business formation questions.

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