Regular readers know that we recommend Panama as one of the world's leading asset protection and tax havens. It's inviting menu for offshore investors features trusts, exempt corporations, world class banking and even family foundations to manage wealth. Unlike too many other jurisdictions, Panama stands by its iron clad financial privacy laws, waiving them only for probable cause of criminal activity. It has no tax treaties with any other nation and it does not tax foreigners who live there or base their offshore businesses there. Add to all that special residential and citizenship laws designed to attract foreigners, and you have some mighty inviting choices.
But whenever I recite this impressive litany, invariable I am asked, usually by an American: "How do you know that all this won't change? What if Panama sells out?"
Unlock the 'Money Secrets' the World's Financial Elite Have Quietly Used for Decades...
- Invest freely in top performing foreign stocks, investment grade bonds, mutual funds, and currencies not readily available in the investment-restricted U.S.
- Buy a luxury home at a 60% discount to comparable properties and pay NO REAL ESTATE TAXES for the next 15 years
- Legally shield your wealth from predatory lawyers and other busybodies; with iron-clad financial privacy laws
- Create your own international corporation and do business anywhere in the world - without leaving home, filing financial accounts or paying taxes to the local government
To discover how the very same opportunities are now waiting for you in Panama, click here.
Of course nothing in life is certain, except eventual death. Not even taxes. And certainly not real estate prices, (more below). But the peculiar history of this tiny nation, (with asset protections laws dating back to the 1920's), makes it a wary friend of the United States government. A century ago, America helped to create Panama for Washington's geopolitical convenience, but the U.S. colonial control that ended on January 1, 2000, left behind a healthy Panamanian skepticism towards Uncle Sam, the Colossus of the North. Both that closeness and distance works to maintain Panama as an ideal tax haven that's not under the thumb of any nation. Compare that to the hapless British overseas territories whose offshore financial attractions have been curbed by the Labour government in London.
Time to Retire?
Recently our sister organization, International Living, in its 15th annual "Global Retirement Index" downgraded Panama from the top spot as the best place in the world for foreigners to establish a second or retirement home offshore. Mexico jumped four places to top the list. Panama fell in part because the price of real estate there has risen dramatically, almost irrationally, especially in Panama City. An added irritant has been the Torrijos government recently restricting tourist visas to just 30 days instead of the traditional 90 days, making it much more difficult for seasonal part-timers to shop for real estate or to live there. It is difficult to understand why Panama's politicians did not consider the importance of the 90-day visas before this change was made, but there is movement to repeal this thoughtless mistake.
Bubble Leak
But let's face it -- the big downer in Panama at the moment is the upward spiral of real estate prices, mainly in condo-saturated Panama City.
The great appeal to foreigners used to be the ability to buy a 3-bedroom, 2-bath condo with ocean view, a golf course town home, or a beach front cottage, for a third or half of what it cost in south Florida or California. With Panama City area prices now almost paralleling those in the U.S., practical foreigners eyeing residential Panama are less than impressed. (There are still many good bargains in beach front and mountain properties away from the city, but you have to be careful and do your shopping).
Understand that the unfortunate change I have described is economic and confined to real estate prices. Maybe the free market has gotten a bit too free. Meanwhile, Panama leads Latin America in GDP growth (9% this year), the expansion of the Panama Canal has started and will brings billions of dollars in construction and thousands of new jobs, and a new free trade agreement with the U.S. is pending.
The real estate bubble does not have a major impact on Panama as a tax haven, a financial privacy haven, an offshore banking center or as a place to base your global business -- all tax free. Its infrastructure is first-world and many of its offshore professionals are excellent. (Again, you need to be careful -- just as you should when doing business in America).
Life is making do with what is best and at hand. For those who want legal tax savings, asset protection and privacy, history has made Panama an ideal 21st century offshore haven in a world where few remain. Panama has not "sold out." Yes, its real estate moguls and condo flippers have oversold themselves right out of the market. But just because the hot air is slowly leaking out of the Panama real estate bubble, (just as it has with a vengeance in the United States), does not mean Panama's other important attributes are impaired.
As a world class tax haven Panama still ranks at the top -- it's a nice place to have your cash and assets, even if, at the moment, you might not want to live there.
* Discover for yourself the real Panama and waht it has to offer; click here for latest edition of my book, Panama Money Secrets. LINK: http://web-purchases.com/190SPMON/W190H720/
* International Living 15th annual Global Retirement Index LINK: http://www.internationalliving.com/retire/paid/09-01-07-top-heavens.html
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