My friend and President of the American Chamber of Commerce , Robert Baker, wrote a very good article in the Letter from the President in this month Business Panama magazine. It echos the theme of my recent posts about Foreigners seeking value when coming to retire in Panama.
The American Chamber here in Panama is an excellent place to start if you want to know what is going on in the business world. The organization has hundreds of members who network to increase business between the U.S. and Panama as well as support the many North American businesses here in Panama. Be sure to visit their website.
The Golden Goose
Having passed the 2006 halfway mark the country is booming, seemingly at full speed. The Panama Canal has been described as a cash cow that can become the equivalent of Texas oil wells that will continue to pump income into the national treasury for years to come. We have a stable democracy and we are receiving foreign investments that in turn have attracted residential tourism and expanded the base of our commercial infrastructure. Our weather patterns do not include hurricanes or severe earthquakes and our unique biodiversity provides us a rare opportunity to offer something different to the everyday traveler regardless of origin. Panamanians are friendly in general and exude a certain "calor humano" that visitors find invigorating and comfortable.
In fact, the many attractions that the country of Panama has to offer have been compared to the fabled Golden Goose. Similar to the Golden Goose, Panama keeps producing those golden eggs year after year and the word has finally gotten around. We might not have the soccer team that can win the world cup (yet) but we make up for it in other ways. Most of the major U.S. newspapers have featured stories and even spectacular articles on Panama and several of the travel magazines have referred to Panama as one of the top ten places in the world to retire. Our pensionado benefits are legendary. People are talking and the world is listening as tourism increases year after year. The Canal brings in the money, the unique tropical paradise where we live continues to attract growth from outside and foreign investments of more than a billion dollars per year are pouring in almost as fast as they can issue the construction permits. There are 35 new projects underway in Boquete, many more in Bocas Del Torro, and still more all along the Pacific beach corridor, not to mention the Atlantic coast or the bulging Panama City.
Just about every province of Panama is showing increased growth and our future looks bright. Many in the business community I speak to expect this boom to continue for 5-10 years. Our two most popular attractions after the tropical paradise, are low prices and low taxes. Low prices include everything compared to the States, Canada, and Europe from a nice meal to a new condominium overlooking the Pacific ocean in Panama city or the interior. We are about half price or less and the investors cannot get enough of it. There are currently more than 70 new sky scrapers on the drawing board, not to mention hundreds of new beach homes in the interior and other provinces. Our taxes are also low in comparison to the rest of the developed world. The fact that you can move to Panama and bring your hard earned wealth with you and no longer be taxed on the income generated by your investments is a powerful attraction. Sadly, U.S. citizens still pay U.S. taxes regardless of where in the world we might live.
What can we do to preserve our Golden Goose? The answer sounds too simple. Three rules beg to be heard.
1. Keep our environment attractive (clean up the bay, etc.)
2. Maintain the low prices
3. Keep taxes low
Specifically, we can take a page out of the Costa Rican book on successful tourism. They used to have a Golden Goose of their own but they have lost tourism in recent years because of higher prices caused by higher taxes. Just as almost everything has gone up in price in Panama during the last 6-12 months, those price increases can be directly related to increases taxes by both the last administration and by this one. Once again the focus is on our politicians. They have the power to make or break the Golden Goose. Get involved and let them hear your voice.
Robert Baker
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