Panama Investor Blog

Copa to allow stop overs in Panama with no extra costs

This is another example of the Panama Tourism Authority going after the low hanging fruit. With millions of passengers passing through Panama on their way to somewhere else, it makes sense to make a deal with the airlines to allow passengers a stay over without penalty. As the article points out, if only 5% of those Passengers decide to stay over for a visit it represents more than 150,000 visitors. Salo Shamah has been diligently working to get more airlines to make direct flights to Panama and then internally to get them to coordinate and take passengers from Tocumen to cities in the interior. This will hopefully begin in the next quarter of 2011. There are many ways to promote Panama, but these fundamental actions of making Panama accessible are the most important IMO.

Translated from La Prensa

Tourists would stop in Panama at no extra cost

Roberto González Jiménez
[email protected]

One of the great opportunities that Panama has to grow as a tourist destination is to attract some of the tourists who pass daily through the Tocumen International Airport but did not visit the country.

The passenger who buys a trip to Copa Airlines with a stopover in Panama may remain in the country several days and then resume the journey to their final destination without extra cost.

Soon will launch a campaign in international media. "If we can nip 5% of that market, would be 150 000 people" in a year, Solomon said Shamah, administrator of the Panama Tourism Authority.

This will continue to promote being broadcast on international media, which offers free Atlapa Convention Center the organizers of events that bring a minimum of Congress.

According to latest official figures, which correspond to the month of July in the year to date have entered Panama 991,000 tourists.

For its part, including transit passengers and crew added 1.2 million. In this group of potential tourists will be targeted the next campaign to promote Panama abroad.

Been screwed by a developer? Who ya gonna call?

I get a lot of emails from readers asking me what action they should take against a developer or promoter who has taken their deposit and not started or completed a project. Unfortunately there are no clear laws protecting buyers from scams or from developers who's dreams turn to nightmares in Panama. I believe the buyers of Los Foros have taken the best approach which is to come together and file legal action in order to try and get retribution. To sit back and do nothing pretty much guarantees you will get nothing. I have no idea what is going on with Grupo Mall and don't want to accuse them of wrongdoing, but the fact that  there has been no work on the site for well over a year and they do not communicate any information to their buyers after numerous requests, certainly does not instill confidence. I certainly understand the challenges that developers are under getting finances for mega projects, but there is a correct way to handle such a situation. Go to these disgruntled buyers website to see the actions they are taking. Another website that may be of value to those who want to share their concerns about certain individuals and businesses in Panama is the Panama Scammers Forum.

Lessons from Dubai

Real estate collapse creates Dubai havoc

Liz Alderman

Dubai, United Arab Emirates— The New York Times News Service

Published Thursday, Oct. 07, 2010 10:51AM EDT

Last updated Thursday, Oct. 07, 2010 2:19PM EDT

Investors in Dubai are learning painfully just how the legal system works in the middle eats or should I say, doesn't work.  Although Dubai wants to be first world and can build like anywhere else, without the legal framework to protect investors, it could take generations for people to forget and invest again in that country. Could this happen in Panama? It certainly could and in fact has in a number of instances where developers and or promotors have dissapeared with the down payments and the buyer has no legal avenue to pursue. But it certainly will not be on a scale with Dubai, and Panama's service economy is more in demand by multinational companies that do more than just handle money. I believe Panama will absorb the overbuilding in time, but many will lose in their rush to buy without considering what they could do should things go bad. Sounds a lot like the U.S. housing market doesn't it?

From The Globe and Mail. Hat tip to Tomas for this story.

Real estate collapse creates Dubai havoc

Liz Alderman

Dubai, United Arab Emirates— The New York Times News Service

Published Thursday, Oct. 07, 2010 10:51AM EDT

Last updated Thursday, Oct. 07, 2010 2:19PM EDT

On a sultry June evening in 2007, more than 100 people camped out at the offices of Emaar, a prestigious Dubai property developer, to ensure that they would land a coveted spot in a gleaming new skyscraper scheduled to open this year near the Burj Khalifa, the world’s tallest building.

Today, the property, designed by the New York architect Frank Williams (who died in February), is like a number of others around Dubai - little more than a foundation. Its value has plunged by more than 40 per cent since 2008, after the collapse of Dubai’s real estate boom.

“It’s really a disaster, the situation in Dubai,” said Silvia Turrin, a real estate agent who bought into the property, 29 Boulevard, and has been unable to get her money out. “It’s not like in Western countries. It’s very difficult to exit here if there’s a problem. And we’ll never get our money back, but now we’re stuck dealing with this hole.”

Dubai lured people to a gold rush in properties at the height of its real estate boom - including business and political leaders from Afghanistan who invested the deposits from Kabul Bank, one of the country’s largest. The near-collapse of the bank in September was largely a result.

At the time, few asked if there was a legal framework for resolving potential disputes. Now, with the glitter gone, interviews with investors, legal specialists and real estate analysts here show that many who bought in are finding it hard to get out.

Despite the construction delay, Emaar is still holding the down payments of as much as 80 per cent that were required to secure an apartment, Ms. Turrin and other property holders said. And Dubai’s opaque property laws have made it virtually impossible for those who bought in to walk away, even as interest accumulates on their construction loans.

In a statement, Emaar acknowledged that 29 Boulevard was still “under construction” but said that it upheld transparency standards and had “taken several proactive measures to address the concerns of investors on developments that are in the pipeline.”

It said those measures included the option of buying other completed properties. Investors, however, say the properties being offered are in some cases smaller, less attractive and more expensive than those they had agreed to buy.

Emaar is not the only developer with such problems. Scores of other buildings around Dubai are well past their delivery dates or have yet to be started.

Apartment buyers who made down payments for property construction cannot find what is happening with their money, these people said. Bank loans held on undelivered property often cannot be forfeited, and borrowers have had to pay higher interest rates even as banks have not let them walk away from the mortgages.

“The rules of the game are definitely opaque here,” said an investor who has bought several properties in Dubai and who insisted on anonymity because of delicate talks with developers and regulators. “In the United States, I would know my legal position much more clearly and could take actions if necessary.”

Most developers have also thwarted the formation of owners’ associations that could take control of building finances and ensure the transparent management of condo fees, which many owners say developers use to take in more money.

Dubai has compressed decades’ worth of real estate development into the past 15 years. But the legal framework for resolving property disputes, and the nature of the contracts themselves, are still as incomplete as many of the buildings, analysts said.

“Dubai has evolved rapidly in just a short time,” said Graham Coutts, who is in charge of Middle East management services at Jones Lang LaSalle, a global real estate services firm. “The legal system is evolving with it.”

Still, concerns about resolving disputes here are mounting, even as developers struggle to find foreign and domestic investors for what has become one of the largest property surpluses in the world.

Commercial real estate vacancies in particular are still rising.

Although about 70 per cent of empty lots from three years ago have been filled, real estate construction since then has far exceeded the purchases, more than doubling the amount of vacant space available, said Timothy Trask, the director of corporate ratings at Standard & Poor’s in Dubai.

Dubai is not the first place where soaring ambitions outpaced reality. Shanghai, Singapore and Hong Kong all were overbuilt in relatively short times. But these cities were able to trim their real estate surpluses by greatly reducing construction until demand picked up.

Building is continuing in Dubai, however, even though potential corporate tenants are showing little interest in developments like the Dubai Silicon Oasis or the Jumeirah Lake Towers, a complex of more than 85 buildings that looks like a Las Vegas version of Lower Manhattan planted on the fringes of the desert. Jones Lang LaSalle recently proposed that some buildings should simply be sealed for the next five years, until buyers return.

Even if investors eventually respond to slumping prices, they would still have to be wary of contracts and vigilant about how legal disputes in Dubai are resolved, said Ludmila Yamalova, a managing partner at the law firm HPL Plewka & Coll, who handles lawsuits for individual and commercial property investors.

She recently sued Damac Properties, one of Dubai’s biggest builders, on behalf of a German investor who claimed that from 2006 on, he invested nearly $10-million (U.S.) in five properties that were not delivered on time. The investor, Lothar Hardt, also contends that the developer mismanaged escrow accounts related to the properties and that he lost money by signing contracts with retailers who planned to set up shop in the buildings.

Ms. Yamalova is now trying to bring suit in a court run by the Dubai International Financial Center, a government body set up to attract investors, which operates largely on British-based law and is independent of the opaque Dubai court system, where cases are conducted in Arabic and plaintiffs must go through local Emirati representatives.

Dubai’s real estate regulators have issued a flurry of rules since 2008 to clarify the situation in Dubai and to comfort potential investors. But new rules sometimes contradict others issued just months earlier, often in ways that leave developers with the advantage and property buyers in a legal limbo, making many wary of ever investing in Dubai again, Ms. Yamalova said.

Mr. Coutts, the Jones Lang LaSalle executive, said that because Dubai had grown so fast, the government was learning on the job. In more mature markets, “you had 200 years to develop a legal framework,” he said. “It’s now becoming clearer what kind of a legal framework is needed to regulate development here.”

"is the U.S. sliding into a tyranny of good intentions?

I receive a daily dispatch from Doug Casey that I find enlightening in these difficult times. It is a free subscription that some readers may find of interest. Today the following missive came from the dispatch that I found most interesting considering the polarization of politics currently taking place in the U.S..

Of course what happens to the U.S. will dramatically affect the rest of the world so maybe reading the real downside might give pause to some and help them to consider taking steps to protect their assets and their families. To sign up for the free daily dispatch just click here.

Are we sliding into a tyranny of good intentions?

‘Nationalizing the moral life of the people is the first step toward totalitarianism’

Nearly 50 years ago, Kenneth Minogue, a professor of political science at the London School of Economics, published The Liberal Mind, his classic study of the dominant philosophy of the 20th century: radical niceness. Rooted in extreme liberal optimism and salvationist aspiration, this triumphant ideology (Prof. Minogue said) tenaciously advanced the notion that history requires the perfection of human society, that governments – in pursuit of this perfection – are obliged “to provide every man, woman, child and dog with the conditions of the good life." Prof. Minogue ended with a warning: “A populace which hands its moral order over to governments, no matter how impeccable its reasons, will become dependent and slavish."

Now professor emeritus at LSE, the 80-year-old has published a remarkable sequel – The Servile Mind: How Democracy Erodes the Moral Life. He picks up where he left off, documenting the ways in which democracy (which once expanded freedom) requires strict obedience to the state – and to the bureaucratic moral order that sustains it.

An elegant essayist of the old school, Prof. Minogue advances his argument by small steps that can end abruptly in crisp revelation.

“I am of two minds about democracy," he writes, “and so is everyone else. We all agree that it is the sovereign remedy for corruption, war and poverty in the Third World. We would certainly tolerate no other system in our own country. Yet most people are disenchanted with the way it works. One reason is that our rulers now manage so much of our lives that they cannot help but do it badly. They have overreached. Blunder follows blunder."

Far worse, traditional democratic theory has been flipped upside down: “Our rulers now make us accountable to them."

Count the ways.

“Most Western governments hate me smoking, or eating the wrong kind of food, or hunting foxes or drinking too much. Most of these governments think we borrow too much money for our personal pleasures and many of us are very bad parents. Ministers of state have been known to instruct us in elementary matters, such as the importance of reading bedtime stories to our children.

“Many of us have unsound views about people of other races, cultures or religions, and the distribution of our friends does not always correspond to the cultural diversity of our society. We must face up to the grim fact that the rulers we elect are losing patience with us.

“Debt, intemperance and incompetence in rearing our children are no doubt regrettable – but they are vices, and – left alone – they will soon lead to the pain that corrects. Life is a better teacher of virtue than politicians and most sensible governments in the past have left moral faults to the churches.

“The point is that governments have no business telling us how to live. They are tiresome enough in the exercise of authority. They are intolerable when they mount the pulpit. Nor should we be in any doubt that nationalizing the moral life of the people is the first step toward totalitarianism."

Original article here.

60 companies and 2,852 workers in Howard

The Panama Pacifico special economic zone operated by London & Regional have been very successful at attracting new businesses to the area. This article from La Prensa highlight many of these new businesses.

Machine translated fro LA Prensa

Electronic products, garments, chemicals, and naval components are already produced in the Panama Pacifico Special Economic Area.

Rafael E. R. Berrocal
[email protected]

The Panama Pacific Special Economic Area, located in the former Howard military base, seems to have begun its takeoff after more than 10 years of studies and tenders. Within its 2 000 5 hectares have been set up 60 companies, most of them linked to high-tech processes and logistics. All arrived in search of tax incentives that are granted within the enclosure.

In total, the developer London & Regional must have invested in infrastructure and promotion of $ 140 million for next year.

The program has already had its first results, and some companies are starting their productive, others are in the final stages and adequacy of their facilities.

Official figures from the agency administering the special economic area show that, to date, the activity of these companies has generated 2 000 852 thousand direct jobs and 200 jobs possible. In addition, estimated at 40 000 indirect jobs.

The report also details that these first 60 companies have already paid the state 57.3 million dollars in income tax, insurance, education and social insurance fees.

Among the companies that have already begun the process of production from Howard is Samtec, which is dedicated to making the connection tape for electronic circuits.

Another is Green Ivory companies that produce tagua buttons for clothing brand like Ralph Lauren and Abercrombie.

Klaus Calderon, owner of Green Ivory, said that Ecuador has moved its operation to Howard by the incentives offered in the area, which make up the difference in the cost of labor to other countries. Ivory Green invested $ 6 million in specialized equipment and made in Italy, which are being calibrated.

Calderon said his goal is to buy raw materials in Panama and, in consequence, is scheduled to drive the creation of a school in Chepo that allows farmers in these areas have knowledge about the specifications of the tagua you need. Among the tenants of Howard's BASF, a German company that is dedicated to the production of additives for concrete. 

The company representatives said that the aim will be selling additive in the region and for major projects in Panama, as is the extension of the Canal. Wartsila, Finland, is another company which is already operating in Howard. Its operation involves the rectification of pieces of large ships.

Olmedo Alfaro, the new administrator of the agency's Panama Pacific Special Economic Area, said that after the Panama Canal, this is the most important project for the state. He said that if the current investment schedule for $ 705 million by 2015, should have created 11 000 382 jobs by the year 2017 and 40 000 for 2047.

Alfaro said that management will be vigilant that companies comply with the promised investment and implement transformation of matter with high technology. Otherwise, he warned that the suspension shall incentives for those who violate the rules.

One company that is about to begin operations is 3PL, regional distributor of Procter & Gamble, the largest manufacturer of consumer goods in the world. To do this, 3PL has rented the largest winery in Howard's 10 thousand square meters.

Albacrome adds to the list of companies that operate from Howard. The company, based in El Salvador, made an investment of 21 million dollars in printing machinery, making purchase contracts with publications such as Cosmopolitan and Vanity Fair.

Gisela Porras, Panama Albacrome manager, said that within six months of operation the company has achieved a turnover of interest in countries like the Dominican Republic and Colombia. Are added, in addition, Caterpillar, Dell, 3M, ST Aerospace and INTELDAT.

Another of the big firms that explores Howard is installed in Sony Corporation. The Government will also promote this center of operations in South Korea, which are based manufacturers such as LG and Samsung.

Panama "drug-pusher, money-laundering, tax haven, fiscal paradise Act."

Well, that's a pretty derogatory remark about Panama, but not at all surprising coming from the socialist bunch who want to see any advantage Panama has in the financial world eliminated. As this article points out, "Over the past week, the NDP and the Bloc Québécois have repeatedly raised concerns about Panama being a "tax haven," which is a country that levies little to no tax on foreign businesses, and which shares insufficient tax information with foreign governments hoping to track down tax-avoiding companies."

They speak as if there is no money laundering going on in Canada or the U.S. and Panama is the main guilty party. I contend more foreigners use the U.S. as a tax haven then Americans use Panama. But this game will go on and Panama will probably capitulate because it needs to borrow vast sums and these FTA's put it in a better position to do so. I just want to know how the politicians and other bureaucratic thugs plan on hiding their ill-gotten gains after the eliminate all privacy from the face of the globe. How long will this continue? Until chaos reigns and fiat currencies are no longer of any value. Then it will be every country for itself, just like the good old days.

From the Embassy website:

With the Canada-Colombia free trade deal now in force, many felt the government could expect relative quiet when it comes to other, less controversial trade pacts. Yet the proposed free trade agreement with Panama has some opposition members suggesting the government is again making deals with the devil, potentially setting the stage for another drawn-out battle.

On Sept. 23, the government introduced Bill C-46, implementing legislation for the free trade agreement the government signed with Panama in May. The bill is currently being debated at second reading.

Over the past week, the NDP and the Bloc Québécois have repeatedly raised concerns about Panama being a "tax haven," which is a country that levies little to no tax on foreign businesses, and which shares insufficient tax information with foreign governments hoping to track down tax-avoiding companies.

While a sovereign country can design any financial system it wishes, they argue Panama has a combination of weak taxes and weak financial transparency that deliberately attracts businesses that want to avoid public scrutiny. This in turn raises concerns about how these businesses will address elements like middle-class incomes, workers' rights, social programs and education.

That "tax haven" label was used dozens of times in House debates, typically in concert with accusations of Panama being a refuge for other shady attributes such as money laundering and drug proliferation. For example, on Sept. 30, NDP Trade critic Peter Julian called the bill a "drug-pusher, money-laundering, tax haven, fiscal paradise Act."

In an interview later with Embassy, Mr. Julian said his accusation stemmed from the government's "dysfunctional trade policy" that produces poor choices for Canadian trade partners. He said the US Internal Revenue Service, the American tax enforcement agency, "has more cases involving Panama than virtually any other country."

"The IRS is fuelling the investigations in the US, the relationship between the illegal dirty money going into Panama and the drug trade, and yet the Conservatives choose to sign an agreement with Panama that has no mention of money laundering or dirty drug money," he said.

"What it does is it basically rubber-stamps with approval the Panama government's approach to this dirty money."

The NDP and Bloc are presenting data to back up their concerns. The Organization for Economic Co-operation and Development, an international body that aims to promote democracy and market economies, and of which Canada is a founding member, has asked Panama for eight years to conform to more transparent rules and regulations, to no avail.

In a report issued Sept. 30, the OECD again blasted Panama for breaking its promises to adhere to financial transparency requests.

"Panama has committed to the international standards of transparency and effective exchange of information since 2002. Until very recently, however, it has had no involvement in international co-operation in tax matters and consequently its legal and regulatory framework has not been designed with such demands in mind," the OECD paper states.

"It is essential that additional steps are now taken to ensure that relevant information is available, that the appropriate authorities have access to it and that Panama can engage in effective exchange of information for tax purposes."

And concerns over Panama's tax regime are not unique to Canada. While the Bush administration signed an FTA with Panama in June 2007, Congress has been opposing it ever since over the tax status of Panama, and implementing legislation has not been introduced yet.

The Harper government argues the financial transparency of Panama has nothing to do with free trade. International Trade Minister Peter Van Loan said that while the government does have concerns about the tax issue with Panama, he has received commitments from the Latin American country that it will conform to Canadian requirements by July 2011.

Despite the Panamanian government's reneging on promises made to the OECD over the past eight years, he said he is still considering these new commitments to be genuine.

The government has the support of experts, a consensus of whom said the assertion that there was no connection between the financial transparency of Panama and the trade agreement is correct.

"Free trade has nothing to do with Panama being an offshore financial centre. In that case, we might as well not have free trade agreements with many parts of the world," said University of Ottawa international finance professor Patrick Leblond.

"I can't see that a free trade agreement with Panama would trigger much more use of Panama as a tax haven," echoed Sam Bucovetsky, an economist at York University.

An issue of engagement or trust?

American researchers have grappled for years with the problem of how trade agreements should deal with foreign tax issues. A widely-cited University of Michigan paper from 2001 acknowledges the relationship between tax and trade law, and a US Congressional research paper from February raises the concern in examining the US-Panama FTA.

Panama itself has recently given several indications that this time, with US and Canadian free trade agreements in the balance, it may finally begin to move to reform its system. It has been completing talks on taxation agreements with the OECD and with several countries, and in March it signed its first double taxation convention with Mexico.

Sensing this, the Liberals say they are in favour of a free trade agreement with Panama. Liberal MPs say they hope to move ahead with the bill and examine it in committee in order to work out any potential problems.

"Engagement is preferable to isolation" when it comes to setting up free trade agreements, said Liberal MP Bryon Wilfert. He said he thought that the appropriate place for debate over tax issues should be the committee, since its job is to examine the bill and recommend provisions that may need to be strengthened.

"Seventy-five to 80 per cent of this country is dependent on export markets. If you're looking for perfection, you're in the wrong business," he said.

Carlo Dade, executive director of the Canadian Foundation for the Americas, said the "tax haven" label has become "an issue with smaller economies that focus on financial services." Some countries in Latin America, he said, are in the business of supplying tax avoidance services because they are profitable.

"Were we a smaller economy that focused on financial services as a means for competitiveness, we would have a very different view of it," he said.

But he said the fact that Canada has had a foreign investment agreement with Panama in force since 1998 raises suspicions about the Panamanian government's insistence that it will commit to reforming its financial transparency.

Mr. Leblond said the issue now is whether Canada should use the "free-trade carrot" as a means to convince Panama and other tax avoidance services countries to conform with OECD standards.

Sam Boutziouvis, vice-president of economics and international trade at the Canadian Council of Chief Executives, said the organization has been involved in the Panama negotiations and has been in contact with businesses who wish the deal to be completed, but he declined to comment on the issue of Panama's tax status.

Panama's ambassador, Francisco Carlo Escobar Pedreschi, said he was looking into the issue, but did not respond in time for publication.

[email protected]

Panama bay clean up on the way

Panama has secured a 120 million dollar loan to clean up the bay of Panama and build a modern sewage treatment plant. Anyone who has visited the city can attest tot the nasty smell that comes from the area near the bay which includes all of the high end new condominiums and hotels. Soon that will be a thing of the past and who knows, maybe they will put in a white sand beach and we will have our own little Ipanema right in downtown Panama.

USD 120 million approved for Panama

CAF development bank in Latin America, approved resources that will benefit 1.2 million residents of Panama City, the Sanitation Project of the City and Panama Bay

  (Caracas, October 1, 2010) .- Due to the rapid urban development in Panama City in the last decades, which has resulted in the deficit in the sewer and pollution of the Bay of Panama, causing its path health problems and environmental, Panamanian authorities have been working on solving the problem and implement the Sanitation Project of the City and Bay of Panama, for which CAF has approved USD 120 million.

  "This project has a high social content," said Enrique Garcia, CEO of CAF - and that it seeks to improve sanitary conditions by reducing pollution in rivers and urban streams in Panama City and restore the environmentally Bay, through the construction of a Wastewater Treatment Plant Wastewater, looking to benefit from this more than a million people living in Panama City.

"Garcia concluded by noting that this is a new contribution of multilateral development financial institution in Latin America and Panama in particular "CAF has approved to Panama in the last five years a total of 1.0003 billion USD and 2010 USD 540 million within which is the approval we are announcing today.

Specifically, this project which will be the Executing Agency Ministry of Health, will build 135 kilometers of sewer lines and connections for home, collecting the proper conduct medical and sewage pipe, be designed and constructed a tunnel interceptor 8 , 2 miles long and 3 meters in diameter and the corresponding pumping station.

 The estimated total project amount is USD 538 million, of which 22% belonged to the CAF loan, 67% to other sources of funding and the remaining 11% local counterpart resources.

As gold reaches new highs, Panamanians make buys

It appears from this article in La Presna that Panamanians are beginning to see the value of buying gold rather than investing in the markets or hording cash. Gold passed $1340 yesterday and is continuing its climb to what many believe could be $5000 in the near future. It was not so long ago that you could buy gold for around $275 an ounce. Here is the article from La Prensa that shows how much gold they have sold to Canada with a one liner on how much gold one of the banks has sold locally. If you want to buy, trade or hold gold I know of no better way than Bullion Vault.

Gold glitter is reflected in the country

According to the Comptroller General, in the first half shipments of gold to Canada totaled $ 33 million.

ALEX E. HERNANDEZ
[email protected]

The price of gold seems to know no boundaries, and yesterday reached a new record $ 1340  per ounce, $ 24 more compared to the price achieved on Monday.

To some experts, the bright metal could reach before the end of the year the barrier of 5000 dollars an ounce, boosted by the weakness of the dollar against other currencies like the euro, which has led traders to seek other options to improve the performance of their investments.

According to Joey Levy, a specialist in financial planning, gold has preserved its purchasing power because it can not be created "from scratch" and can not be devalued as the "money" in paper form.

In Panama, the increase in price was the top export to Canada, mainly by shipments of the metal by the Petaquilla Gold, which has a mining concession in the province of Colon. According to the Comptroller General, in the first half shipments of gold to Canada totaled $ 33 million. The contract stated that total sales of Petaquilla the State would receive 4%.

Elena Chong, manager of treasury Credicorp Bank, an institution which this year began selling pieces of gold, said to have placed 5 000 ounces of the metal, adding that those who invest in gold do so to preserve their purchasing power.

He added that those interested in buying gold must meet the requirements of know your customer policy for financial institutions in Panama apply under the rules and regulations of the Superintendency of Banks.

For employers engaged in wholesale jewelry, the increase does not translate into profits, because the more expensive to buy the metal, have to sell the parts at higher prices. Some customers are discouraged from making the purchase. Others seize the moment and invest in something that is worth more today than yesterday.

Is this the end of Society Anonymous (S.A.) in Panama?

A new piece of legislature was brought to my attention from LA Prensa today and could be the death knell for everyone wanting to keep their ownership of Panama corporations private unless they want to take additional steps and incur additional costs. According to this new bill all registered agents will be required to disclose who the beneficial shareholders are even if they are barer shares.

NOW, before everyone begins claiming that this is the end of privacy in asset ownership in Panama, consider several other solutions. One is the Private Interest Foundation and the other is to have the shares owned by another OFFSHORE corporation. This is a rather simple and a bit more expensive way to protect ones privacy, but could be well worth it. In any case I would think that the attorneys in Panama will make out pretty well as they will get to sell even more corporations and foundations. Brought to you by the demanding folks at the OECD. 

Bill would add transparency to financial services industry
The Ministry of Economy and Finance has proposed a bill that would require registered agents to record the beneficial owners of corporations, including those controlled by bearer shares.
The law includes sanctions for entities that do not comply with the regulations.
"It is something that Panama has to do to meet the requirements of double taxation treaties," said Deputy Minister of Economy and Finance Frank De Lima. "Panamanian legislation allows the use of bearer shares, and authorities need to know who the owner of those shares are to give the required information to the country requesting it."
The change is one of those being demanded by the Organization for Economic Cooperation and Development (OECD) to increase the transparency of Panama's financial services industry. The changes are needed to remove Panama from the list of tax havens compiled annually by the OECD.
De Lima said that some of the recommendations made by the OECD have already been implemented.

(original article in Spanish)

Now here is why Panama is making this move now and what they must do to comply.

From today's Tax-news.com

The Global Forum on Transparency and Exchange of Information for Tax Purposes (the Forum) criticized Panama in its phase one peer review covering the legal and regulatory framework.

The peer review stated that Panama could not move to phase two until it had acted on recommendations that:

• Ownership and identity information was available, including on bearer shares and shares held by nominees;
• “Know your client” rules specify the need to identify owners of companies, founders, members of council, and beneficiaries of foundations. Penalties should apply for failure to keep up to date details on the stock register of any “sociedad anonima”;
• Reliable accounting records are kept; Commercial Code requirements should apply to all companies, partnerships and partnerships limited by Panama registered shares, irrespective of whether they carry on business in Panama or not. Record keeping requirements for trusts and foundations should be clarified to ensure accounting information is reliable and kept for at least five years;
• The statutory powers of the General Revenue Directorate (DGI) should include obtaining information for tax exchange purposes, not just where there is a domestic tax purpose as is presently the case; this power should be recognized as overriding any other obligations to secrecy. Penalties should apply under the fiscal code for failure to provide the necessary information;
• Panama bring into force the necessary tax information exchange agreements wherever relevant; and
• Professional secrecy rules should be amended so that they did not prevent the exchange of information for tax purposes, especially in respect of lawyers acting as resident agents.

In response, the present government of Panama reaffirmed its commitment made in 2002 to implement transparency and exchange of information for tax purposes based on its commitment letter, and to this end it is:

• Entering into double taxation conventions with mechanisms to exchange tax information based on international norms;
• Modifying legislation to enable tax information exchange; and
• Creating the necessary operational framework.

The Panama government added that Law 8 of March 2010 was enacted to provide the necessary powers to the DGI for tax information exchange. Law 33 of June 30, 2010 was further enacted to address OECD concerns regarding the scope of powers given to the DGI and also covered transfer pricing, permanent establishment and tax residency definition.

With regard to establishing an operating infrastructure, the Panamanian government said it had been taking advice from the United Nations Development Program since June 2010 to set up an international tax office within the DGI.

For early 2011, the government said further legislation was planned which would establish the obligation to maintain shareholder information, including on bearer shares, as part of “know your client” rules, with the competent authority to supervise the process and determine sanctions for non-compliance. It also expects to complete twelve double taxation treaties by the first quarter of 2011 and continue to negotiate more agreements for tax information exchange.

The government also hopes that the Forum’s peer review group will be in a position to provide a supplementary evaluation of its May 2010 report in the first quarter of 2011.

It's Simple to Balance The Budget Without Higher Taxes

This for those who are interested in the economic and political situation in the U.S., this new video from Freedom&Prosperity.org shows that the budget could be balanced without raising taxes. Although I doubt very seriously if the powers that be will follow this advice as they would rather continue to spend on social programs in order to have more control over the people