Panama Investor Blog

Undesirables to be kept out of Panama?

Whenever I hear of big brothers all over the world working together to control borders I am torn between applauding their actions or denouncing their plans as more intrusion into our lives. Now Panama will be checking everyone well before they arrive to be sure they don't have someone after them. If you have nothing to hide, why should you care if they screen you before you enter the country? Maybe they will be able to stop all of the scammers and deadbeats from coming here to take advantage of the lax rule of laws and lack of investigative abilities.

On the other hand, as governments implement  these kinds of controls I believe we are losing more of our freedoms. Those intent on doing bad things always find a way around the controls and we all just end up paying for their misdeeds in the way of more over-site and intrusions into our lives. If they can deny you entry because of a judicial problem it is just a short step to checking if you have made your mortgage or car payments.  Did you file your taxes on time or did you make that child support payment. If not, forget about your vacation. It seems 1984 is closer than we think.

LA Prensa

For 2010, the National Customs Authority is planning to run an agreement with the airlines to know who the passengers before the plane touches down in Tocumen airport.  Through the World Customs Organization will be checked the lists of persons being sought as criminals, and detect if someone of this nature is on the aircraft, they be immediately returned to their country of origin.

  This system is intended to secure the borders, so that more people do not enter as "undesirables" to the country, say's the Customs Authority.  For example,  within 72 hours notice they will inform the shipping port terminals who are coming to the cruise ports or airports and they will review if passengers have any pending case.

Why Mexicans would like to work in Panama

Our resort hired a hospitality consultant,  Jorge Calderon, from Mexico to work with us for the next month or so.  He has many years experience in the industry so I asked him if he would write a few of his observations from time to time that I would post on my blog. As many of my readers are hotel operators I thought his input may be of interest.

I am a native of Mexico and I have worked many years in hospitality, both in operations and as a consultant in the industry. Mexico is a very mature market for hospitality as we have been catering to the North American market now for many years. I came to Panama under a consulting contract and although I have been here only a few weeks, I have made some observations that you may find of interest.

 The dream of all men is to work less and make more and after reviewing the Panama labor laws I would say they have this concept down to a science.

Lets begin with a 30-day yearly vacation, an extra month pay each year, 11 paid holidays and 18 sick days. You can only work 3 hours extra on any given day and a total of only 9 hours a week. Any tips or commissions become a part of your salary for the purpose of your severance and social security benefits.  If you work on a holiday you get paid double and a half and if you work nights you get a bonus as well. Then there is the four months off if an employee gets pregnant. I see that a new minimum wage has been mandated starting in January of $416 a month which is a significant increase. I am sure there are more benefits that I have yet to discover, but let me say that although we have unions in just about all facets of work in Mexico, they have not gotten nearly this sweet a deal for their members.

 In my country you start with 6 days vacation after the first year and you receive 2 days more for each year thereafter up until you get to 20 days in total vacation time after working 20 or 24 years in the same company. You get 8 paid holidays, and a Christmas bonus equivalent to 15 days per year. There is no “extra month” pay and working night shift does not earn you any more income than if you work days. The minimum wage is $120, although a good employee can earn many times that in tips and bonuses based on performance.

 To succeed in the Mexican hospitality business you have to work long hours and sacrifice a lot of family time. Unfortunately Mexico is in a real tourism recession and if my people knew about your employee labor benefits, they would be clamoring to come and work here. Yet, I understand that Panama immigration law prohibits experienced foreign workers from benefiting from your wonderful labor laws. Such a deal! Panamanians don’t know how good they have it. Come to Mexico and experience what it is like to work in our industry and you would quickly run back home.

Jorge

Studies show Panama needs to lower immigration barriers

Panama has long held the position that the labor market is reserved for Panamanians and have made it difficult for foreign immigrants to have the opportunity to work in the country. This is especially true in the professional trades such as doctors, lawyers, educators etc. I know of a Panamanian doctor who lived in the U.S. for many years and is highly regarded worldwide in his field who can't practice in Panama until he goes through two years of local residency. It is roadblocks like these that hold Panama back from becoming a greater country. Local talent is scarce in many fields and foreigners who have these skills are not allowed to enter. It is a misguided protectionist position that keeps Panamanians from gaining the knowledge and skills that are so desperately needed in the country. In addition to this, Panamanians who leave the country for higher education in many cases do not return to their country, compounding the problem. This fact was highlighted at a recent conference here in Panama.

La Prensa

The United Nations Organization on human development presented a report yesterday on a recent study on immigration.

The 108 room convention center in the City of Knowledge was full. The guests came to hear the details of the latest report on Human Development United Nations Program for Development (UNDP), devoted to migration.

At that moment, and as a preamble to the study conducted in 182 countries, the group was part of an exercise with which Jose Eguren, UNDP representative in Panama, seeking to show that, at some point, all human beings are migrants.

  The result: slightly less than half raised their hands.

  Then Eguren asked to raise their hands who were born inside the country and moved to the capital city.  The other half raised his hand.

  The result of this simple exercise was a tiny sample of the nearly one million migrants in the world.  What is surprising to the researchers conducting the study is that 740 million people move within their own country and the rest across the border. A phenomenon that countries do not escape with a good index of human development.

Francisco Rodriguez, co-author of the paper and chief of investigations for the Office of Human Development Report, said that countries with higher per capita incomes obviously offer greater opportunities for mobilizing people. This represents, he said, an inequality for the inhabitants of the least developed and low income.

  Rodriguez explained that immigration Panama represents 3% of the population, while emigration, 6%.

The expert, who was responsible for presenting the report in Panama, said that it requires an immigration policy with fewer barriers.

 According to Rodriguez, it is clear that the more imposing barriers to migration also increase the problems of illegal human trafficking, which ultimately blends with the crime.

  "Being able to decide where to live is a key element of human freedom" notes the report.

  As this is a global report, Rodriguez considered essential that each regional office of UNDP country extrapolates the information where it operates.

Visa eliminated for certain travelers, but their tourist card goes way up

I applaud this action to make entering the country easier, and if the increase cost of the tourist card applies only to those who would have had to apply for a visa to enter Panama, then I think the $30 cost is fair too. There is still no word on what will be done with the $5 tourist card for everyone else.

LA Prensa: A new decree allows travelers of any nationality with visas from the U.S., Australia, Canada and the UK or any European Union member state may enter Panama without the need to obtain an additional visa. 

The fact that "these countries comply with a monitoring system and strict control of migration to high standards of safety and reliability is reason to allow these people to enter Panama with full and complete confidence," said the Tourism Authority of Panama via a statement published Wednesday. 

Instead of an additional visa, these visitors will have to purchase a tourist card for $30 before entering the country, confirmed Ernesto Orillac, advisor to the Tourism Authority.

Faster more efficient immigration promised

A very short article in La Prensa today has the head of Immigration promising to smooth out the rough spots and delays in getting visas and other immigration issues. This has been a very troubling situation for just about everyone trying to work or live in Panama and one I know the current administrations aims to rectify. Lets hope this is accomplished in the two month time period promised by Mary C. González, director of the entity.

President Martinelli personally welcomes foreigners to Panama

We had a nice couple, Kathy and Lyle Neigenfind, visit our sales office this week and they shared an interesting experience they had in the city a few days earlier. When I heard their story I asked them if I could publish it with their photo they had  taken with the President. I especially like their comments about how he plans to make things easier for foreigners to get settled here. From everything I have seen and heard over the last month, he is working hard in that direction.

Here is their story sent to me by email today;

We were staying at the Marriott in Panama City and President Martinelli was having breakfast with 7 guys. The doorman said "Do you want to meet him? We said "Sure" !! The doorman spoke to the President's assistant and she waved us over to his table and whispered something to him. He stood up from his table of guys and spent about 10 minutes talking to us. It was pure happenstance. He was very chatty and told us he wants to make it very easy for Americans to move here and to invest. He said he was planning on having meetings with ex-pats to see what their concerns are. He told us it was going to be easier to get residency, drivers license and he was going to make it safer. He really didn't need to do all of that. (he probably thought we were big time investors!) We were trying to imagine President Obama being that accessible?

Panama Cabinet approves laxer visa requirements

I am certainly glad to see this article about easing visa restrictions. This is a major complaint I hear from investors, many of whom become frustrated with the system and give up. Panama need to protect its borders and control who comes in the country. But they also must move quickly to make entry available to those who will help bring prosperity to the nation.

La Prensa:

Panama will issue tourist visas to visitors from countries including China, United Arab Emirates, Philippines, India, Bulgaria, Angola, Cameroon, Zimbabwe that present a visa from the United States, Canada, Australia and the European Union.

 

These foreign nationals, who were previously asked to apply for a Panama-specific visa cleared by Public Security and National Defense agencies and tarry up to six months, may now visit the country without the legal red tape or fees that can amount to $1,500. The new regulation does require that prospective visitors from certain countries obtain the tourist visa from an authorized Panamanian consulate at least 48 hours in advance of their arrival in Panama.

National Immigration Authority Director María Cristina González explained that this measure aims to facilitate the entry of foreign business travelers and executives of companies with which the country is negotiating contracts.

González indicated that between 100 and 200 such travelers arrive in the country each month.

 
Marta López Martín, president of the National Bar Association, applauded the measure as an effort to strengthen foreign investment in the country.

 

Juan Carlos Araúz, a lawyer specializing in immigration cases, said it helps to demystify the subject of authorized visas.

Is North America over populated?

One of the things I like about Panama is the relatively small population of a little over 3.3 million. This rather small population is one of the reasons you don't see such blatant poverty that can be seen throughout most of Central American and Caribbean countries. Costa Rica is the only other country in the area that has been blessed with a rather small population and a manageable growth rate of about 1.3%. That is not to say there is no poverty here. But, even with the reported 40% living below the poverty level you don't see much of it because most are living in the interior on plots of land that provide a subsistence living. Panama also has a large indigenous population who for the most part live in that 40% poverty level and they tend to live in reservations or groups away from populated areas. Of course a city like Panama City which has nearly half of the countries population also has a lot more concentrated poverty, especially on the Colon side of the corridor.

There has been an increase of immigration into Panama over the last few years mostly coming from Colombia and other Latin American countries. Most are seeking better work opportunities or political asylum. According to an article I posted earlier in the year only 26,000 people applied for residency in Panama between January 2007 and March 2009. Of that number there were only about 2500 applications from North America.That is a very small proportion of the population.

With these facts in perspective lets compare this to what is happening in the U.S.. Since 1980 the United States has seen a 33% increase in population and most of it due to both legal and illegal immigration. If you look at the facts of this immigration it becomes obvious that this uncontrolled immigration is one of the reasons they have so many fiscal and growing cultural problems. The U.S. is becoming a very fragmented society because most of these immigrants never become part of the melting pot like they used to during the wave of immigration after the two world wars. Now they don't learn the language and place ever increasing burdens on the health and education systems. I stumbled on a great website that clearly tells the story of American immigration and how it has/is affecting the country. I encourage you to spend some time looking over this data. Unfortunately even if they stopped the huge flow of immigration the country will still grow at unprecedented levels due to what has taken place in the last 30 years.

Immigration delays are #1 complaint from foreigners

Being the number one issue of complaint is not because it is the first thing that must be done in order to take advantage of the benefits Panama has to offer. I receive more complaints about this one subject than all others combined, year after year.  And they are usually the most passionate, because when it comes to having the right to reside where you have spent money,  people naturally become feisty. I am sure this article will bring many such comments and they are welcome. This problem has gone on for years, but in the last few years delays in immigration have reached a point where many foreigners just give up and take a pass on Panama. Part of this problem is the fact that more people than ever are trying to get residency and the government is ill equipped to handle it. Millions of dollars of new facility and equipment that were purchased to alleviate the problem are still not operating, and with a new administration coming into office they will have to learn the ropes which will no doubt cause further delays. And it does not seem to matter if you are an investor with 20 million dollars or a Costa Rican who married a Panamanian trying to get residency, plan on a long wait to get that all important document.

No one complains more than we promoters as we spend millions of advertising dollars to attract potential clients only to have them become so discouraged with immigration delays that they just say it is not worth it. Their stories echoing throughout the internet cause potential clients to not even give Panama a look. This is one area the new administration has promised to make a positive changes, but it will not come soon enough for those impatiently waiting years for what should take months. Hat tip to Kraig for sending me this article from El Siglo that I have posted after a google translation.

El Siglo

Lawyers say they are playing with them

Many lawyers are beginning Migration to believe that the phenomenon of the Bermuda Triangle was transferred to the Office of Visa 2, the National Migration Service (NMS) of Cuba Avenue.

Instead of planes and boats in the Caribbean, this office records disappear from foreigners seeking to acquire residence in the country.

"It is not a novelty that comes to notice and told you can not find the file," said Raul Andrade, president of the Law Society Specialist Migration Affairs (ADEM).

The situation should not surprise anyone. And is that with roles in cajeta pulled and put into any space that still remains free, is not an easy job for the officials of this department to locate any document.

Panama's second passport made easier to acquire

According to a new decree that was made March 2nd of this year, a significant reduction in deposit funds are requiered in order to recieve a Panama Passport that is good for 5 years.

Here is some  more on this from the Pardini Website.

By means of Executive Decree No. 26 of March 2, 2009, the Government of Panama significantly reduced from US$615,000 to US$260,000 the bank time deposit at the National Bank of Panama required to qualify for a Second Passport.

The new rule only requires that this deposit produces a minimum of only US$850.00 per month in interest which at current interest rates for a 5-year time deposit amounts to US$260,000.
About the Panama Second Passport, if you are looking to obtaining a second passport quickly, the only immigration program that provides that is the Panama Second Passport Program. This passport is excellent because is granted almost immediately and it lasts for 5 years, renewable.
We have found that the Panama Second Passport has been useful for Russian, Middle East and other nationalities with restricted entry into EU.
With the Panama Second Passport, they can enter most EU countries without Visa and without any invitation letters.
One important advantage when they travel with this Passport is that Panama has Visa-Free agreements with 40 countries.