Panama Investor Blog

Panamanian Judge sentenced to Prison after being suspended and placed in house arrest

 

 

 

 

 

 

 

 

 

 

 

 

 

For the first time in Panama, a three-member judicial panel sentenced a suspended Panamanian Supreme Court Justice Alejandro Moncada Luna to five years in prison for unjustified enrichment in an unusual case of corruption that captured this Central American nation's attention.

Not knowing under what terms it actually happened, the tribunal approved on Thursday an agreement in which former high court justice Alejandro Moncada Luna pleaded guilty to the charges. He was transferred to jail. Moncada Luna had been under house arrest during the judicial process.

In 2009, Moncada Luna was named to a 10-year-term as one of nine Supreme Court justices under the administration of then-President Ricardo Martinelli.The three-member panel suspended Moncada Luna as a justice in October and placed him under house arrest. It was the first case of a criminal conviction against a member of Panama's highest court, making it a historical event. 

Billionaire boom: Where the money is now

The world has 155 new billionaires, pushing the worldwide total to 2,325.

That's a 7% jump from 2013, according to the 2014 "Billionaire Census" from Wealth-X and UBS.

So who is your standard billionaire? According to the report, the typical billionaire has about $3.1 billion, is 63 years old, and did not reach the $1 billion threshold until their late 40s.

Almost 90% of them are married, and on average, have two kids a piece.

They like to hang with other billionaires: They have relationships with nine ultra-high net worth individuals, three of whom are billionaires.

They're mostly male: Just 286 of them are women.

They're self-made: About 60% of male billionaires fully made their fortunes themselves, and another 27% have at least partly made their money themselves. Though it's a different story for the women -- just 17% are self-made. More than 65% of women billionaires inherited their wealth.

They own a lot of stuff: The typical billionaire owns four properties, each worth an average of $23.5 million. About 35% of billionaires have their own private philanthropic foundations, and one in thirty billionaires owns a sports team or a race horse.

Education isn't required: Not all billionaires have a wall full of degrees. In fact, the report states that 35% of global billionaires do not have bachelor's degrees.

And where do they live?: Nearly 35% of the world's billionaires are concentrated in 20 cities, only two of which are in the United States. Despite that, the U.S. has the highest number of billionaires, accounting for close to 25% of the world's total billionaire population.

Panama's Growth Continues to Surprise

Although the pace of growth has declined, the Panamanian economy remains the most dynamic in the entire continent.

On average, the projections from diferent sources suggest that in 2014 and 2015 the expansion of gross domestic product (GDP) will be of 7%, well above the average of 1.2% this year in Latin America, according to the World Bank.

The Ministry of Economic Affairs and Competitiveness said yesterday that the second quarter GDP showed a 6.3% increase from the same period of 2013, after reporting a total of $8,657.4 million.

All sectors increased their value in that semester, except for hotels and restaurants; the supply of electricity, gas and water and the agricultural sector.

The fastest growing sector was construction (15.5%), followed by transport and communications (7.7%) and trade (3.3%). All of which are extreamly important for the economy.

For the Executive Secretary of the Secretariat, Michelangelo Esbrí, these figures show that the Panamanian economy "is alive, it is thriving and is not stagnant."

He also stated that foreign direct investment (FDI) in the first half was for $2,575.4 million, 26% more than the previous year. This is a quite surprising figure, and hopefully it will continue to grow as more incentives are provided to foreighn investment.

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. 

"Direct Foreign Investment" Sustains Economic Growth in Panama

How can the Gross Domestic Product (GDP) grow 6.2% in a country where construction workers paralyzed most of the ongoing projects, including the expansion of the Panama Canal; a nation where the crisis endures in the Colon Free Zone (CFZ), due to a great debt of Venezuela to companies operating in the Free Zone, totaling USD 1,7 Billion; and where hotel occupancy is at its lowest point (67% in 2010 and 53% in June 2014)?

How can Panama be the country with the highest economic growth in Latin America and the Caribbean, if in the first half of this year - exports of goods in the nation grew only 0.1%, agricultural production continued to deteriorate, had to take cost-saving measures energy, falling production of hydraulic and thermal energy; and transit of vessels through the canal declined in the first six months of the year?

How is it that Panama's economy grows 6.2%? The government has just approved a cut in public spending of about $ 500 million, based between their technical arguments, which was not fulfilled in the first half with the programming of the collection of current revenues of the central government.

FOREIGN DIRECT INVESTMENT

What, then, is the macroeconomic variable that sustains economic growth in Panama of 6.2% in the first half? 
It Is Foreign Direct Investment (FDI), which grew 26% in the first six months of 2014 compared to the same period last year.

To get an idea of ​​the impact of FDI in the first half of the relationship of this variable with respect to real GDP was 15%.

In recent years, FDI has been a significant variable in the growth of the economy.

From 2000 to 2013, it went from $ 624 million to $ 4.65 Billion, an increase of over $4 Billion during these thirteen years, an expansion of 646% in this period.

One explanation of why FDI grows so strong in Panama is because foreign companies are constantly buying Panamanian companies. This phenomenon has involved almost all activities of the country, but mainly in the banking, industrial and trade sector.

If it is good or bad to depend on foreign investment for the growth of a country, that is another debate. At this time Foreign Direct Investment is what keeps Panama growing…

 

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New Ferry begins operations - 24/10/2014 (Panama - Cartagena - Bocas del Toro)

On October 24th the ferry 'Adriatic' will begin operations, which will connect with the Panamanian Caribbean city to Cartagena in Colombia.

According to the company Tropical Cruises, boat, remodeled in 2005, can accommodate one-thousand passengers, 300 crew members and 500 cars.

The ferry will sail on two routes. From the port of Colón to Cartagena 2000, called 'Cartagena Express'; the reverse route (Cartagena-Colon 2000) will be sold as' Panama Express, "and the 2000 Columbus-Bocas del Toro (Isla Colon) route will be promoted as' Bocas Weekend '.

The onboard amenities include three restaurants, a nightclub, casino and duty free shop.

The route statement raises out every Monday and Wednesday from Colon to Cartagena 2000, and the return would then be Tuesday and Thursday. Fridays sail from Colon to Bocas del Toro 2000, returning Sundays.

Prices are around $ 90 traveling chair and $ 190 traveling in the cabin, both per person each way. The Columbia-Bocas section would cost about $ 95 via traveling without a cabin, or $ 277 per sleep the three nights of travel in the cabin, reported the source, adding that the tickets could be purchased through travel agencies nationwide .

Mayra Zebede of Tropical Cruises, said the 'Adriatic' is a new option for business travelers, tourists and cargo that will impact positively on the economy of the ports that will come.

'The ferry is an opportunity to reduce costs in shipping goods to the islands of Bocas, for the arrival of tourists to a destination with over 100 small hotels. The trip to Bocas is 12 hours, Zebede added.

The boat's dimensions are: Length: 164.4 meters, beam 27.6 meters, draft 6.3 meters and has 31,910 tons.

Surely the Atlantic coast will receive a new injection of tourists, partly mitigate the volume that was lost with the removal of one of the cruise company Royal Caribbean from Port Columbus Home 2000.

 

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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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A visit to the Authority of Tourism of Panama

In August 7th, we had the opportunity to meet with the new Minister of Tourism of Panama, Jesus Sierra, to talk about the development of Medical Tourism in our country. Amongst many topics, we talked about our wellness program called LaVida Optimal Wellness Destination in which we are receiving retired NFL and NBA players from the United States, to come and visit Panama.  

Medical Tourism in Panama is a product that has the potential to promote the country around the world as the Hub of Wellness. 

 

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Panama: Fastest Growing Economy in Latin America - 6.7% in 2014

LaPrensa - Panama will grow 6.7% this year, which will make it the fastest growing economy in Latin America, according to the latest projection of the Economic Commission for Latin America and the Caribbean(ECLAC.

The Ministry of Economy and Finance (MEF) of Panama said the new estimate after learning that "progress ECLAC match those announced by the MEF, which place the performance of the local economy with a positive change this year will range between 6 % and 7% ", a result that would be below 8.4% in 2013.

Behind Panama is Bolivia with (5.5%), Colombia, Ecuador, Nicaragua and Dominican Republic (all with 5% growth)

Across the continent, Venezuela only experience negative (-0.5%) growth.

The growth forecast for all l Latin America and the Caribbean was reduced from the 2.7% to 2.2% forecast last April.

According to the Economic Survey of Latin America and the Caribbean 2014, since 2011 the economic growth of the region has been slowing, a trend that continues this year.

"In particular, during the first months has seen a sluggish due to a stagnation of gross fixed capital formation and slowing growth in private consumption. Counterpart has accelerated government consumption and net contribution exports has been more favorable than in the same period last year. growth for the exercise of economic activity in the region of 2.2% is expected, "said ECLAC in its report.

 

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