I’m sitting outside trying to catch a breeze in the sultry evening heat of David, Panama. The second (or maybe third, depending on who you ask) largest city in Panama, David is the shopping town of Chiriqui Province on the western end of the country.
My husband and I traveled here from Panama City after the close of the Live & Invest in Panama conference. I’ll be filling you in on our travels throughout the country, but first I want to share a bit more about the conference.
Last Friday I wrote about the “Living in Panama” portion of the conference, and there was plenty of talk about the “Invest in Panama” topic as well.
Best Kept Secret in International Banking
When you think of international banking or bank secrecy, is Belize the country that pops into your mind? Not usually, said Peter Zipper, President of Caye International Bank, Ltd. in Belize.
Belize today is the best offshore banking haven in the world, declared this expert with over 30 years of international banking experience.
So why was a discussion of Belizian banking included in a Live & Invest in Panama Conference?
Because you should diversify. What good is it to take all your eggs out of the same US or Canadian basket and move them all to a Panamanian basket? You should diversify, and with the information Rainelda Mata-Kelly and Peter Zipper provided, it seemed obvious.
Bullish on Panama
Leif Simon, who emceed the conference, outlined why Panama is such a great place to invest.
“Why does Panama stand out as the safest haven in this region and one of the safest havens in the world today?
Why is it the best place on earth right now to launch and to operate an international business?
Why is a property investment in this country one of the soundest investment choices you could make?
Why have 41 major international companies (including Halliburton, Dell, Caterpillar, DHL, and Sinopec) chosen to establish headquarters here?
You could (and we often do) say that it’s the infrastructure. It’s better here in Panama than anywhere else in Central America. The transportation infrastructure, the telecommunications infrastructure, the banking infrastructure…anyway you consider it, the infrastructure in this country exists to a higher level and works on a more reliable basis than anywhere else in this part of the world.
But that’s a superficial explanation.
The real question is, why is the infrastructure better in Panama? In part it’s because of the extended American presence last century…But, looking ahead, the reason why it’s continually expanding and improving is because of current President Ricardo Martinelli’s Five-Year Plan.
In this part of the world, having a plan isn’t such a big deal. Everybody down here in the lands of bananas and mañanas has a plan.
Martinelli’s Five-Year Plan is notable because Martinelli is actually implementing it. Immediately upon taking office he published his 122-page plan (drafted with the help of McKinsey and Company) in English…and then he set about making it happen. He hasn’t stopped to take a breath in the 20 months since. Frankly, what Martinelli has accomplished already in his term as Panama’s president is nothing short of extraordinary.
Highlights of Martinelli’s Five-Year Plan include:
Replacing the old Diablo rojo buses that clog the Panama City roadways with new Metro Buses (this is already happening)…
Building a new 13.7-kilometer-long Metro across the capital (the ground-breaking ceremony took place last week)…
Developing a new Government City where the 200 government offices will be consolidated (saving the city millions of dollars a year in rent)…
The extension of the Cinta Costera; this three-phase highway expansion project is moving ahead at a great pace, with Phase One complete and Phase Two nearly accomplished…
The cleanup of the Bay of Panama (the French engineer father of one of our son’s friends, in Panama to manage this project, reports that it’s proceeding on schedule)…
The development of Panama Pacifico, a new city across the Bridge of the Americas where business development is being further incentivized by tax breaks and other perks (and where many of those 41 international companies I mentioned earlier are choosing to base themselves)…
The construction of additional highways to connect the key strategic points across the country (a new highway from Tocumen Airport to Colon, for example)…
Establishing a new international airport at Rio Hato…
Expanding the international airport at David…
That’s a total investment of about US$4 billion.
Where does Martinelli think he’s going to get all this capital? The Panama Canal!
In the 10 years they’ve been running this show, the Panamanians have generated for themselves more than US$4.5 billion in surplus Canal revenues.
Over the past decade, Panama has increased annual tonnage figures and prices at the same time…and it has decreased Canal transit time from 33 to 23 hours. The world’s big shipping outfits are happy to pay more to get where they’re going quicker.
Not ones to leave great enough alone, the Panamanians are in the process of expanding the Canal, pushing ahead in typically aggressive Panamanian style with a US$5.25 billion expansion of their greatest asset. This will result in even greater annual Canal revenues, both direct (more transit fees) and indirect (more maritime registrations, more maritime insurance fees, etc.).
It will also mean ever-increasing employment. Unemployment has fallen from as high as 12% about a decade ago to about 6% today.
Will all pieces of Martinelli’s Five-Year Plan happen…on schedule?
This is still a land of bananas and mañanas, and nothing is guaranteed.
I can’t predict the future any better than the next guy, but my money is on Martinelli.”
Plant a Tree, Get a Visa
If you don’t qualify for a pensionado visa, and you have the funds to invest, check out Robert Kroesen’s United Nature project.
A Panamanian of Dutch descent, Robert has a large tree plantation in Darien Province. He grows teak, for which there’s a huge demand — especially in Asia — and has a program already established to give you everything you need to qualify for a a reforestation visa.
His trees are FSC certified, and he farms in an environmentally sustainable way. His company also helps the indigenous people of the Darien area.
Buy Property with Your IRA
Atty. Chris Rusch explained how to use your IRA (independent retirement account) to purchase real estate in Panama or elsewhere.
You have to set up the legal structure properly, and you can’t live in the property yourself until your retirement, but it’s much easier to do than many US investment firms lead you to believe.
Coming up, eco-tourism, charitable work and shopping in Panama.