What’s So Great About Panama?
A fellow reader writes:
“You mysteriously refer to ‘the advantages of Panama‘ without explaining. For those of us considering other countries that may be cheaper (and cheaper certainly helps to solve a lot of problems right now), what are those advantages?”
Panama is the world’s top retirement, business, tax, and offshore haven right now because it boasts:
- Affordable First World Health Care
Panama’s health-care facilities, built to U.S. standards while the U.S. was running the Panama Canal, are the best in Central America. You’ll find nearly every health-care service you could need at a fraction the cost and with a level of personal service (remember house calls?) you may have forgotten ever existed.
Generous Incentives for Investors
The World’s Best Program of Discounts and Other Benefits for Retirees
As a Panama pensionado, you save on almost everything, from in-country airfares, hotel stays, and restaurant meals to prescription drugs, even closing costs when buying a home.
This is being put to the test…and failing in places. Still, especially when considered within the context of the region, Panama’s infrastructure is of the real-world, as opposed to the developing-world, variety…and it’s being improved all the time. This country boasts great roads, high-speed Internet access, cable TV, reliable electricity, drinkable water, and edible fruits and vegetables.
Thanks to its position as one of the world’s premier trading centers (and its Canal), you can find anything you might want in this country–everything from Benetton and Burberry to the latest electronic gadgets and any American comfort food you could name.
One of the World’s Biggest International Banking Centers
One of the World’s Few Remaining Offshore Havens
Serious Tax Advantages for the Foreign Resident
Residents pay tax in Panama only on money earned in Panama. When it comes to taxation, this is as good as it gets for the foreign resident or retiree.Furthermore, Panama boasts other tax pluses, including a 20-year property tax exemption on new construction.
A U.S. Dollar-based Economy (since 1904)Americans face no currency-exchange risk.
A Stable Political System
A Safe and Secure Environment
Panama is one of the safest places in Central America. There are poor areas and a definite division between the “haves” and the “have-nots,” but there is little violent crime. I feel safer walking the streets of Panama City, even alone, than I do the streets of Baltimore, Maryland, where I grew up.Panamanians are friendly and welcome foreigners, both as tourists and as residents. And, after eight decades of American involvement in the running of the Panama Canal, they’re well-accustomed to Americans among them.
The family circle is important in Panama, much more so than in the United States, as is religion.
A Natural Wonderland
The world doesn’t know it yet, but Panama is a natural wonderland. Its expansive rainforests are among the richest and most complex on the planet. It’s the only country where jaguars and pumas prowl only a short drive from the capital. It’s also the only country where you could spend the morning diving in the Caribbean, then the afternoon swimming in the Pacific.Panama’s vast, road-less jungles are home to more than 940 recorded bird species and 105 endangered species, including the Central American tapir, the American crocodile (my son’s favorite), the scarlet macaw, and many species of eagle.
Off Panama’s shores are some of the best diving, surfing, boating, deep-sea fishing, and snorkeling anywhere.
A Fast-growing Economy and a Bright Economic Outlook
“Despite slowdowns and meltdowns elsewhere,” I wrote earlier this week, “Panama’s economy continues to fire on all cylinders, expanding quicker than most any other in the world. It’s all thanks to the continued surge in construction, transport, and commerce. The Panama Canal expansion project is in full swing…a new highway is being built between the country’s two main cities, Panama and Colon…and downtown in the capital is being completely reconfigured with a new, widened central thoroughfare, a city bypass system, and a broad, grassy stretch of parkland along the bay.”You can’t appreciate the rate at which this country is growing unless you come and spend time here yourself. Don’t come to Panama City for peace and quiet right now. This place is on fire.”
“I’m perplexed,” one reader wrote in response. I’ve read elsewhere how the Panama economy is expected to slow by 50% next year. Am I missing something?”
First, let’s get our bearings.
Panama’s was one of the fastest-growing economies in the world in 2007, with real growth rising to 11.2%. This following an average growth rate of nearly 8% a year in 2004, 2005, and 2006. The canal, the ports, and the Colon Free Zone benefited greatly from regional and international trade expansion during this period. The construction industry boomed, and the financial sector expanded. Unemployment fell to an unprecedented low.
OK…that’s recent history. What about right now, as world markets are melting down and global economies are shrinking?
As we explained earlier this week, Panama’s growth continues.
That is not to say this country is going to see a growth rate of better than 11% again this year. Projections are for 8%.
Only 8%. At a time, again, when most markets are contracting. In the context of the current climate, 8% growth is tremendous.
Looking ahead, pundits are calling for maybe 5% growth in 2009. Some doomsdayers are citing this as the end of the Panama boom.
That’s silly. How long could any market keep up a growth rate of better than 8%? After five years expanding at that pace, Panama will see “only” 5% growth in year six of this run.
Only 5%. Poor Panama…