Panama Investor Blog

Panama and Colombia: Negotiating a Tax Information Sharing Deal

Yesterday Panama and Colombia come to a middle ground and were given 1 year for the purpose of negotiating an agreement to avoid the issue with double taxation, which can include provisions for sharing financial information from both countries. With a memorandum of understanding between governments settled, issues from the bilateral trade agendas will come to agreements.  

 

The big issue for Panama was the classification as Tax Heaven by the Colombian government and was added to their grey list. After this meeting, President Juan Manuel Santos signed a decree that stipulated the exclusion of Panama from this list, which was a requirement imposed by the Panamanian government to negotiate a tax deal on equal terms and without coercion.

 

The Vice President of Panama Isabel Saint Malo stated that with these measures of discrimination being removed, they had agreed to an agenda of conversations to fight the money laundering and the financing of terrorism and to stop double taxation. We were signing the decree through which we will remove Panama from the list of tax havens, after they sign a memorandum of understanding where they commit to a date by which to negotiate a deal," President Juan Manuel Santos said.

 

On the exchange of tax information from the accounts of Colombians in Panama, which is the primary objective of the neighboring country, Saint-Malo said “we are of the opinion that it is in the best interest of our country to explore the feasibility of an agreement to avoid double taxation which guarantees the users of our platform that services will be preserved and Colombian investment is encouraged in our country. "

 

The withdrawal of Panama from the list of tax havens of Colombia sent a couple of messages to the rest of the world, first, respect for our tax system; second, that Panama will claim the space for dialogue to evaluate alternatives; and third, that we are not willing to negotiate under pressure or to the race. "

 

For its part, the Government of Colombia said in a statement that the memorandum of understanding is the basis for negotiating a double taxation agreement and will include a clause of financial reporting standards of the Organization for Economic Cooperation and Development (OECD).

 

Colombia also referred to the agreement to cooperate on money laundering through the Unit of Financial Information and Analysis (FIAU, equivalent of the Financial Analysis Unit) and cooperation with international organizations. "This agreement reinforces that we seek and have established with all neighbors, to cooperate on all issues," said Colombian Foreign Minister.

 

"It's what we wanted from the start," Santos said. "It's good news for everyone."

With this being settled for now, we can move on knowing that Panama’s reputation is still protected and that even though some countries from around the world want to consider Panama as a tax heaven, it will continue to be what it is and regulations will take place in due time. 

 

 

 

Panama's Balboa Port ready for a US$110 Million Expansion

The Panama Balboa Port is home to the PPC (Panama Ports Company), which is part of a huge conglomerate named Hutchinson Whampoa, based out of Hong-Kong. This company is ready for a great investment in expansion and renewal of its port and equipment said to take place in 2015, with a budget of $110,000,000.00 Dollars.

Aitor Ibarreche, Hutchison Whampoa's CEO made this announcement and said the investment will boost its capacity by 11%  up to 5M TEU ( twenty-foot equivalent unit) by adding loading and unloading spaces. Also the Pacific Port's crane zone with now be wired and using electricity instead of burning fuel, a great plus for saving on the long run.

There is no doubt that this investment and expansion is designed so that the port can be ready for the new locks of the Canal expansion. This project is said to be delivered by early 2016, and so will this expansion. Since the Balboa Port is #45 largest in the world, also Panama's 2nd largest one, it makes sense to improve and justify such an investment. 

Panama Expo-Tourism Fair 2014

The tourism fairs in the world offer an excellent opportunity to present and promote the supply of tourism products in a destination; countries and companies make significant efforts to organize and participate in them, with the assurance of getting back in the short and medium term.

Panama was consolidated in 2014 as the host of one of the most important fairs in the region: Expoturismo 2014, in its fifth version promises a smashing success, surpassing by far the presence of exhibitors and especially buyers and wholesalers International, which this year is expected to be about 200, and who ultimately are the ones that include attractions in Panama with different deals, boosting the image, positioning and hence the arrival of tourists to our country.

Expoturismo Panama is the result of close work and coordination between the Chamber of Tourism of Panama, the Chamber of Commerce and the Tourism Authority of Panama, they have created a working model in proactive and dynamic team.

Importantly holding the fair on the 26th and 27th of September, it occurs in the context of the international tourism month with the participation of over 30 countries, and this year will present innovations in format, as the opportunity audiences will buy packages and deals that will be promoted on September 27th, World Tourism Day. No doubt, buyers will benefit from excellent prices fair and tourism within the country, which is a priority to develop.

We urge all tourism businesses to participate in the country to showcase their products and Panamanians and residents to visit the exhibition and take the opportunity to continue to discover the wonders offered by our beautiful Panama.

 

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Electrical interface: It is expected that Panama and Colombia will be connected by 2018

By 2018 it is expected that Panama and Colombia are connected by electrical interconnection, so said the president of Colombia, Juan Manuel Santos.

Santos told reporters said some studies for the interconnection will be in October this year. "The timeline presented to us is that some studies will take a year, then the construction process and implemented, so we hope that in 2018 we have connected to Panama and Colombia will be in October," he said.

 

For his part, President Juan Carlos Varela Varela said that coordination with security agencies of both countries plan to provide security to the construction site of this important project, as well as near the inhabited areas.

The project involves the construction and operation of a transmission line to direct current electric power with a 300 to 400 megawatts and a length of 590 kilometers, of which 310 are developed in Colombia and the rest in Panama.

Other topics addressed by the leaders was boarder security, tourism promotion and cooperation on trade and investment.  

For sightseeing, the two countries agreed through increased connectivity of several cities in Colombia to Panama by air, especially at the airport in Rio Hato, to 120.7 kilometers west of Panama City, and by sea between the cities of Cartagena and Colon.

MEF blames "World Economic Crisis" for $2.7 Billion loss in Panama Canal Operations between 2014 - 2019

The Ministry of Economy and Finance foresees a loss of approx. 2.7 Billion Dollars due to the World Economic Crisis and delay of the expansion between 2014 and 2019.

According to studies presented by the MEF last April in regards to the period between 2014 and 2019 the Panama Canal will represent approx 7,2 Billion Dollars income to the Nation – This is being compared to the what the Authority of the Panama Canal (ACP) in 2006 presented for the expansion of the canal saying it would represent approx 10 Billion Dollars for this same period.

According to the chronogram agreed in the construction and design contract of the third set of locks, the expansion should have started operations in October 2014, but because of delays it will be operative beginnings of 2016.

With this known, the government of Juan Carlos Varela will not be receiving $653.8 million which were planned to have for 2015 and another $765 millions less in 2016. Amounting to $1.4 Billion loss, because of the "World Economic Crisis" and delays of expansion detween 2015 and 2016. No more than $400 million loss each year between  2017 - 2019 expected. 

 

Related articles

Checking out the Panama Canal expansion

Varela's Government may invest a sum of $ 19.5 billion in Panama

We Need Your Prayers and Support

To All of Sam’s Readers and Friends,

I met Sam Taliaferro 10 years ago when he was first starting to create the dream that became Valle Escondido.  Over the past six years, Sam has been my colleague, my business partner, my mentor but most importantly my friend.

If you’re reading this blog in Boquete, it’s more than likely that you’re here because of what Sam created.  Sam is almost singularly responsible for turning this small, mountain community into the place that so many people call home.  If you’re reading this blog somewhere else, it’s probably because you’ve come to know Sam as a source of unbiased news and intelligent, no-holds-barred commentary.  As long as I’ve known Sam, he has never been afraid to give me the straight, unvarnished truth – as painful or as joyful as that truth may be.

With that in mind, I’m 100% sure that Sam would want his friends and readers to know the truth about his health.  He has never been shy to tell people about his battle with cancer and the steps he was taking to win that battle.  Sam is the most focused and clear minded person I have ever met and he approached his illness with as much intensity and thought as he approached everything in life. 

On Sunday, February 6^th, Sam was experiencing some difficulties with his health and he visited his doctor on Monday.  He returned home convinced that he could overcome this latest set back as he had other incidents in the past.  Unfortunately, his condition worsened and late Monday night he was rushed to Hospital Chiriqui in David and was admitted into the intensive care ward.  He is still in intensive care and is fighting a series of infections throughout his body.

Make no mistake; Sam’s condition is extremely grave.  I can say that he is receiving the best care possible, that he is not in pain and that he is fighting this battle as best he can.  At this point, the best thing Sam’s friends and readers can do is to pray for him, keep him in your thoughts and send as many positive thoughts and feelings his way as possible.

Sam’s circle of friends, business associates and readers is in the many thousands and covers a wide area.  At the instructions of his family, I will update his blog with any news concerning his condition.

Please keep Sam and his family in your prayers.

Warm regards,

Paul McBride

Something very positive may come from my battle with cancer

Writing a blog takes a great deal of time, but I love doing it because it serves a number of purposes. It gives me an opportunity to share my views and because so many of you read it, it also gives me an opportunity to make an impact on my adopted country of Panama.I have made so many Friends both here and abroad just by being consistent in sharing the good, bad and ugly of Panama.

It also gives me a much needed release as I love to read and learn about things I consider important and share them with others. I have been writing this blog now for almost 7 years and I hope to continue to do so for years to come.

As some of you know, I have battled with throat cancer for the last two years. I was not a smoker or heavy drinker. I was infected with a virus! It has been a major struggle and the battle is not yet won. I have my good and bad days as I fight to destroy the cancer before it destroys me. This has been an epic journey for me as I have spent a great deal of time traveling and researching the latest and greatest cancer treatments around the world.

As I have been financially blessed to not only be able to do my own research, but collaborate with  a number of partners and we have found a great deal of incredible new technologies and treatments that are either available now or soon will be for a variety of degenerative diseases. One of the most promising technologies is stem cell therapy. I have gotten a great education by visiting treatment centers, conferences and research facilities over the last year or so. I believe that this new cell technology is the key to life extension and the eradication of most diseases afflicting human kind.

With all of this education I have embarked on a new endeavor. To try and bring Panama to be the top in treatments of degenerative disease and regenerative medicine. With that aim I am diligently working with the government of Panama to put together laws and regulations governing these new technologies so that Panama can reach this goal. Thus far I have had tremendous success in recruiting help with this project and have had dozens of top doctors and researches from around the world visit Panama. Panama authorities are very interested in how this can significanlty improve the health of their citizens as well as open up the country for medical tourism. In the coming months many more doctors and researchers will be visiting Panama to see how they can participate to bring Panama to an exceptional level of technologically based treatments.

As I research as much about these subjects as I do about investing in Panama, I am considering sharing regular news on these new technologies and where Panama stands on our goals in another blog. If we are successful Panama could become the place the world looks to for a gentler and more effective form of treatments that will be many years before being accepted by big pharma, the FDA and their equivalents in many "first world" countries.

It takes a lot of effort to post regularly with commentary, but if enough of my readers are interested in this subject I will take it on. Even though I am battling this dreaded disease I am blessed to be able to bring about something positive and you can help me just by reading and spreading the news. I would like as many people to know about what Panama is doing as possible.

Let me know by voting on it here.

A personal note from Sam

My dear readers;

I want to thank you all for continuing to read my take on things here in Panama. I have lived in this small country now for over 13 years and have been sharing the good, bad and ugly with you now for more than 5 of them. Although it takes a great deal of time I have always enjoyed it because it gives me a soap box in which to share my views on Panama and the world regarding politics and the economy  from a conservative point of view. I am sure there will be many changes in Panama and the world in 2011 and I pray that all of you will be safe and  prosper no matter how good, bad or ugly things may get.

Happy New Year from my family to yours

Sam

 

Panama Entrepreneurs go to Washington in search of investors

Each year Panama businessmen host a Panama week in major cities in the U.S.in an attempt to get new investment into the country. I know some of the folks involved and they have had great success in the past in accomplishing their goals. This article from La Estralla tells about this years effort and the success they have had in the past.

Machine Translated from La Estralla

JULIO ALFARO
[email protected] [email protected]

PANAMÁ. PANAMA. Los empresarios panameños confían en que su misión de esta semana a Estados Unidos sea fructífera. Panamanian entrepreneurs rely on their mission to the United States this week will be fruitful.

Unos 60 representantes de empresas locales viajan mañana a Washington, a presentarle a inversionistas estadounidenses las diferentes oportunidades que ofrece Panamá para hacer buenos negocios. About 60 local business representatives traveling to Washington tomorrow to present to American investors the many opportunities that Panama offers to do business.

Se trata de la décimo cuarta versión de Panama Week, evento que busca estimular a la inversión estadounidense en nuestro país. This is the fourteenth release of Panama Week, an event that seeks to encourage U.S. investment in our country.

Roberto Alfaro, presidente del Consejo Empresarial Estados Unidos-Panama (USPA) señaló que lo más importante de este evento radica en la promoción que se le da al país ante gente que tiene poder de decisión en empresas con el potencial para venir a Panamá e invertir. Roberto Alfaro, president of the United States-Panama Business (USPA) noted that the most important of this event lies in the promotion that gives the country to people who has decision-making in companies with the potential to come to Panama and investing .

'Serán unos 60 empresarios panameños que harán sus presentaciones ante un número similar de inversionistas estadounidenses. 'Will be about 60 Panamanian businessmen to make their presentations to a similar number of U.S. investors. Creemos que en esta oportunidad, tenemos una serie de ofrecimientos que despertarán un gran interés en ellos', apuntó Alfaro. We believe that this time, we have a series of offers that will arouse a great interest in them, "said Alfaro.

LOS PUNTOS FUERTES HIGHLIGHTS

Panamá lleva cartas fuertes para la décimo cuarta versión de Panama Week. Panama has strong cards for the fourteenth version of Panama Week.

Los empresarios panameños llevan promociones para inversiones en sectores de turismo, puertos, comunicaciones, generación eléctrica, bienes raíces, banca, áreas revertidas, logística, aeropuertos y negocios en general. The promotions are Panamanian businessmen for investments in tourism, ports, communications, power generation, real estate, banking, reverted areas, logistics, airports and businesses in general.

En los años que se ha celebrado Panama Week, varias empresas estadounidenses de reconocido prestigio, que participaron del evento, posteriormente decidieron instalarse en Panamá. In the years that Panama Week was held several prestigious U.S. companies that attended the event, later decided to settle in Panama.

Algunas de estas empresas son, por ejemplo, Dell Computers, empresa de alto perfil tecnológico; Caterpillar, considerado el fabricante más grande del mundo de maquinarias de construcción, equipos de minería, motores industriales y otros; además de la instalación de Georgia Tech en la Ciudad del Saber, como un centro de innovación e investigación logística. Some of these companies are, for example, Dell Computers, high-tech company, Caterpillar, considered the world's largest manufacturer of construction machinery, mining equipment, industrial engines and others, plus the installation of Georgia Tech in City of Knowledge, as a center of innovation and research logistics.

Además de los empresarios panameños, también serán partícipes de la delegación el ministro de Comercio, Roberto Henríquez, y representantes de la Asociación de Usuarios de la Zona Libre de Colón, la Asociación Bancaria, la Cámara Marítima de Panamá y corredores de bienes raíces. In addition to the Panamanian businessmen, will also be participants of the delegation's trade minister, Roberto Henriquez, and representatives of the Association of Users of the Colon Free Zone, the Banking Association, the Maritime Chamber of Panama and realtors.

Here's who to call if you get screwed by a developer!

My post last week regarding being screwed by a developer last week recevied a lot of comments and garneshed a few  imformative emails from avid readers. Gail Geerling  has worked on a commitee with the American Chamber of Commerce here in Panama to educate buyers on the pitfalls  and help them navigate through them. Here commenst are below. I also recieved an email from Mitch Creekmore of Multinational title insurance. Here are his comments.

"If I have a title policy issued and I go to sell and find out someone has committed fraud against my land title, my recourse is to the title company who issued the policy via a claim and the coverage’s, conditions, stipulations and exceptions under the policy.  Without it, an owner’s recourse is to no one, not even the notario.  Or you can sue the original seller.  In the case of Costa Rica, we created the endorsement so each year we can renew it at the owner’s discretion with payment and check the public registry.  It’ a minimal cost for the peace of mind it gives.  But naturally, the Panamanian agents and attorneys pooh pooh the notion of title insurance and say it’s not needed…., until there’s a problem Sam

Here is Gails suggestions:

It seems as though all is not lost when it comes to getting screwed by a developer here in Panama.  So what do you do when it all goes wrong?

 According to Gail Geerling, whose company helps foreign investors learn how to navigate the system in Panama, “No longer do buyers- foreign or local- have to accept shoddy, sub-standard construction, outrageous clauses in their contracts, or developers who dance rather than deliver.  There is another option.”

 Panamanians love acronyms, so of course we expect they’d use one of the longest to refer to Panama’s consumer protection agency, ACODECO.  Autoridad de Proteccion al Consumidor y Defensa de la Competencia is a public autonomous entity, which means that it actually has some power to carry out its purpose and follow through—unusual in Panama.  It was created in its original form in 1969, and has morphed quite a bit over the years- including at least two name changes and several refinements to the law pertaining to its rights and abilities.  Though the changes have all been positive they are somewhat confusing, so perhaps that’s why few consumers are aware of what ACODECO can do for them.

 Does ACODECO’s claims system work perfectly? 

 “Absolutely not”, says Geerling.  “It is the usual Panamanian process- sometimes full of bureaucracy and frustration.  But after all, we chose to live and invest here, so why not brave the bureaucracy and take advantage of one of the best tools Panama gives its buyers? 

 It’s not for the fainthearted.  There are limitations in the process, and of course most foreigners (especially non-Spanish speakers) will probably want advice and assistance throughout the process.  Yet, many of my colleagues and I have taken clients successfully through the process- resulting in repairs or money from the developer.  By and large- and to no one’s greater surprise than my own- the process actually works!”

ACODECO’s mandate is to Protect and Preserve the Rights of the Consumer, a fairly broad scope of work covering anything from cases of price fraud to false advertising, to honoring product guarantees. 

However, in a speech given by ACODECO’s representative recently at the AmCham Real Estate Forum in Panama City, it was mentioned that nearly 70% of the cases ACODECO are currently handling pertain to the real estate industry. 

“It’s not a great commendation for developers in Panama,” says Geerling,  “but what we find interesting is that these cases are increasing.  People are sick and tired of being taken advantage of, and they’re making a statement: We’re not going to take it any more.”

Restrictions within the process include financial claim limits, and time limitations for making a claim- but options do exist even after those limits have been exceeded.

For more information, email: [email protected] or check out ACODECO’s website at www.acodeco.gob.pa