The Changing Face of Panama
By Gary Edwards
Panama's economy has been growing for years and continues to grow during a worldwide recession. Investment in commercial real estate has paid great dividends for a decade or more and promises to continue to do so for decades to come. Only the high end of the housing market really suffered recently an that presents opportunities going forward.
Panama is a tropical country bordered by two oceans. The central mountains of Panama range from 1,000 to 11,000 feet. Therefore the climate in Panama varies from hot and humid in the rain forests to hot, sunny, and breezy on the coasts. In the highlands temperatures can drop into the low fifties at night and daytime highs are often not more than 80 degrees. The Panama climate includes two seasons, wet and dry. The "summer" dry season coincides with North American winter which is a great deal for tourists from the North.
A walk through the United Nations World Heritage Sites at Panama Viejo and Casco Antiguo will give you a glimpse into Panama's history as part of the Spanish colonial empire. The old Panama was the first European settlement on the Pacific Coast of the Americas in 1519. In much more recent times Panama was governed by military dictators for much of the 20th century. It is only since the ouster of Manuel Noriega in 1989 that Panama abolished its army and has made steady progress as a democracy with a head for business.
Panama's heritage shows through even the hustle and bustle of life in modern day Panama City. A typical work week is from Monday to mid day Saturday, eight, ten or twelve hour days. Sundays on the other hand are sacrosanct and for the family. There is a belief that working hard, taking care of your family, and following your beliefs will suffice to make things work out. There is little "type A personality" perpetual worry in this world of "tranquilo." Even in dire circumstances there is a sense of the rightness of things and faith in a good outcome. When your taxi driver crosses himself as you drive past a church gives you hint as to the source of this faith.
Panama Daily Life
North Americans will find that Panama uses dollar bills as currency and that English is widely spoken. The city has malls comparable to those in North America and grocery store aisle signs are in English as well as Spanish. There are discounts of up to 25% on everything from medicines to household good for residents aged 55 and on up.
Living in Panama
Panama has an interesting capital city with first world services and Panama has a slower paced interior where life has moved slower for centuries. The same seas that the conquistadors saw lap at Panama's shores waiting for your footprints.
Doing Business in Panama
Panama's small business community is thriving, especially since improved credit laws have helped as many as 300,000 small businesses get credit more easily. Commercial real estate offers great opportunities for the wise such as construction and leasing of office, retail, and warehouse space.
The World Bank Group's Doing Business website ranks countries for ease of doing business. Panama ranks 81st out of 181 economies ranked. Panama ranks 8th in doing business across borders and 28th in getting credit for doing business. Within the Western Hemisphere Panama ranks 11th overall out of 31 countries. Those interested in buying selling real estate in Panama should note that Panama ranks 75th in registering property.
Ease of Doing Business in Panama: the Numbers
Category % Rank 2009 % Rank 2008 % Change
Doing Business 81 76 -5
Starting a Business 32 35 +3
Dealing with Construction Permits 73 70 -3
Employing Workers 172 172 0
Registering Property 75 68 -7
Getting Credit 28 25 -3
Protecting Investors 104 101 -3
Paying Taxes 172 171 -1
Trading Across Borders 8 9 +1
Enforcing Contracts 116 117 +1
Closing a Business 72 77 +5
Business in Panama and Panama Real Estate Investment
Panama is the country at the South end of Central America. As the narrowest spot in the Americas it is the location of the Panama Canal which connects Atlantic and Pacific. Panama's central location between North and South America makes Panama a transportation hub and a place for investment in transportation, repackaging and reshipping, and light assembly of parts. Panama has been doing business in oil transshipment since the building of Alaska pipeline and the need to move that crude oil to US gulf coast refineries. Panama may soon be doing business in refining oil near the deep water port at Puerto Armuellas. The Colon Free Trade Zone has been doing business in receiving, repackaging, and resending container shipments for years. It is said that 40% of South American bound container shipments pass through the Panama Canal.
Doing business in Panama can be quite profitable. Doing business in any foreign country can present problems for the unwary. The best way to avoid dealing with business paperwork and employees in Panama may well be investment in companies which buy, develop, lease, and sell real estate. Your investment in Panama real estate will grow year by year and as Panama's economy moves on your returns on investment will grow. As someone else stands in line to do paperwork you can walk on one of Panama's many beaches. Let someone else deal with the paperwork while your investment grows with Panama's economy and the recovery of the high end of the real estate market.
The Cinta Costera Project
In late 2007 Panama began the long awaited construction of a coastal strip along Avenida Balboa, the main avenue on the Bay of Panama. This is the Cinta Costera project in Panama. Heavy equipment moved in, fences went up and men went to work dumping rock and gravel along the shoreline. Almost a year later storm sewers were extended out to the bay and the bay filled in for a hundred yards from the old shoreline. The job was finished in the summer of 2009. The combination green strip and highway improvement has exceeded expectations. Families walk along the seawall in the evening and on weekends. Traffic no longer snarls up along the bay.
The Cinta Costera is not the only construction project in town. Despite the world economic crisis Panama's construction boom goes on unabated. The locks for the "third land" of the canal will go under construction in July. Unlike the USA there are not any closed down construction projects lacking construction loans. People are still working, paying bills, and buying real estate.
Panama real estate is still a great investment. In fact, as the high end of the real estate market has dipped, this is probably the time to look for a deal on that 30th floor condo on the Bay of Panama overlooking the the last of the Cinta Costera construction. For investment opportunities buying into repossessed mortgages on brand new houses and apartments may be the best deal ever as the housing market recovers.
An offshore formations and banking specialist working for several companies regarding offshore structures, formation of companies, foundations, banks and financial institutions.
Feel free to contact me by e-mail: firstname.lastname@example.org
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Views expressed in the article are those of the author and are not necessarily the opinions of CaribbeanChoice, its staff or members.