Panama Investor Blog

"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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Panama is one of the most Economically Stable places where Multinationals can have their Operations.

Panama has played its cards right when it comes to business, because of the enacted tax breaks and broad economic incentives it is becoming an allure for companies looking to relocate.

There are many exemptions and benefits offered by the Law 41. It exempts money earned abroad from income tax. This is the biggest benefit that multinationals get especially that they only operate in Panama but render services abroad. Panama's infrastructure and location also allows these corporations to operate from a strategic point without undergoing the usual red tape for foreign owners and CEO's.

Hiring personnel and staff have also become easy through the said law. It allows international companies to hire foreign born employees without worrying about immigration restrictions. This even includes visa assistance to employee's families which allow them to stay in Panama even without obtaining work permits.

It is also a big plus that the country uses the US dollar as its official currency. Multinationals have the convenience of being in a global banking hub, as well as having a strategic geographical location which connects the North and South America.

Companies from around the world have already began their Latin American presence in Panama.

A few companies that have decided to benefit from Panama's laws include: Procter and Gamble, Caterpillar, Dell, Hyundai Heavy Industries, , Western Union, 3M, Vanity Fair, Peugeout, Roche and Merck.

Executive relocations mean furnished rental demand and increased home sales in certain sectors of Panama City for example in Panama Pacifico. 

The Panamanian Government has made key decisions to continue alluring foreign investment, with its continuous pursuit to improve infrastructures around the country such as airports, metro system, bridges, roads and more – We see a bright future in Panama for the decades to come. That is – if, we began to improve the overall distribution of resources to continue receiving the waves of people entering Panama and thus be more self-sustainable, independent and free when uncertain times come (we all remember the world economic crisis and to many degrees people believe we are yet to experience the unfolding of the global monetary system) – time will tell. 

Until then, Panama seems to be in an advantageous country for business - because of its geographic position, strategic importance (Panama Canal) and continuous economic growth.

The Panama Canal: Money making Machine

Panama Pacifico - A City with a Bright Future.

 We recently made the decision to move across the Bridge of the Americas from Panama City into the area of Howard where Panama Pacifico is in development. 

This is why:

“Panama is renowned worldwide for its connectivity. This competitive advantage is reflected in every detail of Panama Pacifico’s master plan, from fiber-optic networks to the latest trends in green building to walkable neighborhood designs. London & Regional Properties (LRP) is committed to the concepts that: sustainable redevelopment can complement environmental preservation; private enterprise and government can collaborate for the greater good; and long-term view creates long-term value. 

From its first steps through its evolution, Panama Pacifico demonstrates the power of connectivity in every aspect of this growing community.

 From studio apartments to family residences, retail spaces and Class-A offices to custom built warehouses, at Panama Pacifico there are a variety of options available for home buyers, investors, and business owners in this fast growing community.

 Panama Pacifico is a world that forms a bridge between tradition and innovation, country breathing space and big-city accessibility, private funding and government support. A true master-planned community that brings together people of all ages to live, work and play. A residential haven with a vibrant mix of walkable neighborhoods and smart homes. A global enterprise that offers unprecedented business advantages. All set within a sustainable landscape linked by parks and trails. 

The cornerstone of Panama Pacifico’s carefully phased development is its world-class master plan, laid out in four ambitious phases over the coming years. During its first eight years (2008-2016), Panama Pacifico is slated for $405 million in total real estate development. Actual investment as of December 2012 totaled $250 million. When complete, Panama Pacifico will offer: 

1 million square meters of new commercial space over the life of the project

$4 billion in total investment

20,000 new residences

40,000 new permanent jobs

1,500 construction jobs

Millions of dollars in goods moved through the community on an annual basis.”

So why exactly did we choose to move to Panama Pacifico? Its simple:

There are lots of Opportunities for business and investments

We LIKE nature,

Its close to Panama City,

And we get to cross the bridge of the Americas more frequently, reminding us how amazing the Panama Canal is and how important it is for the world!

If you wish to know more about Panama Pacifico you can check out their website www.panamapacifico.com  – also, you contact us directly if you wish to discuss any particular area for your investments in the Republic of Panama. 

 

Panama Pacifico Launches High Tech Office Building

  Jan 27, 2011 – London & Regional Panama, Master Developer of PANAMA PACIFICO, hosted the formal launch of the fifth office building in the International Business Park (IBP) to over 35 real estate agents and special guests this morning.

Located inside the IBP, the building’s design includes six floors of 2,000 square meters each, which are divisible from 50 to 2,000 square meters.  A new parking garage is also being constructed, and is located directly behind the new office building. The new garage has five levels of parking and more than 600 spaces.

This newest office building at Panama Pacifico was designed and is being constructed to the highest international standards.  Building features include back-up electrical systems, a central air conditioning systems, fire suppression systems, access to fiber-optic cable for high speed data, and standard lobby and building core finishes on each individual floor.  
The new facility also includes a number of ‘green building’ features such as double-pane windows which equate to lower cooling costs for future tenants.

London & Regional Panama’s (LRP) Managing Director, Henry Kardonski, highlighted the rapid development taking place in Panama Pacifico, and the numerous benefits for companies located in this Special Economic Area. Dan Marcus, LRP’s Director of Development, gave a detailed overview of the innovative new building, as well as an update on the exciting new residential projects.  New amenities being built in the community in 2011 include a new pool and sports club, the first phase of a sports park, four new restaurants, and a new medical clinic in the IBP.

Panama Pacifico is the largest, most innovative new development in the Central American region, located on the site of the former Howard Air Force Base, and adjacent to the Panama Canal. The Special Economic Area is also well-connected by a 15-minute drive to major ports on the Pacific Ocean, the Panama Canal Railroad and the PanAmerican Highway, in addition to the newly re-named Panama Pacifico International Airport.

London & Regional Panama, is investing a minimum of $705 million dollars for the development of the most modern and newest master-planned community at Panama Pacifico, which has Special Economic Area status.

London & Regional Panama is the master developer of the former Howard US AFB in Panama, now called PANAMA PACIFICO. A mixed-use, business, residential and recreational center, it´s been devolped by London & Regional Panama.

Over 70 companies now at Panama Pacifico

The new master-planned community at Panama Pacifico passed the 70 mark this December, with more than 70 companies now onsite, operating, or moving to this Special Economic Area.  Located adjacent to the Panama Canal and an easy 15-minute drive to urban downtown Panama City, Panama Pacifico started construction this past month on its third office building offering 12,000 m2 of Class-A space for lease.  For industrial users, three more warehouses are currently under construction with first space availability this March.  In the new Town Center, in addition to the first two residential projects under construction, renovations have begun on the historic Olympic-size outdoor pool into a new recreation center.  Infrastructure on a new sports park with future football, soccer, basketball and tennis facilities is also now underway.  If you are interested in learning more about the residential and commercial opportunities available in this landmark community, visit PanamaPacifico.com or PacificoTownCenter.com for more information.

Catapillar to open training center in Panama Pacifico

I love driving heavy equipment and own an excavator, several back hoes and a bobcat. (All for sale now that my project is completed) I really enjoy digging in the dirt with these incredible earth movers. The excavator can move so much material in in one scoop it does the work of a hundred men  with shovels.  The bobcat is a blast to maneuver and makes quick work in tight spaces. So if you ever get a chance to drive any of these tools try it, it will be a thrill, as long as it is not your everyday job.

With all of the infrastructure projects and the huge open pit copper mine coming online, Panama is a natural choice for Caterpillar to open a training center for Latin America. This facility will draw operators and buyers from all over the this part of the world.

La Prensa

The Caterpillar heavy equipment multinational firm began building its training and demonstration center in the Panama Pacifico Special Economic Area, Howard's former base. 

Chris Martinez, media liaison in Latin America for Caterpillar, said that work began on June 1 and be completed in the first quarter of 2011. 

While noting that total investment has not been defined yet, said the purchase of 100 hectares where you build the center represents an investment of 60 million dollars. 

When the center is operating, the company plans to handle a volume of 12 000 visitors annually and generate 300 direct jobs. 

Martinez said the company chose to Panama by air connectivity, which offers better access to its distributors and customers, in addition to the tax benefits offered by the country to multinational enterprises.

Wartsila opens operations in Panama Pacifico

Jun 22, 2010 (Thomson Reuters ONE via COMTEX) --

Wartsila Corporation, Press release, 22 June 2010

Wartsila in brief:



Wartsila is a global leader in complete lifecycle power solutions for the marine

and energy markets. By emphasising technological innovation and total

efficiency, Wartsila maximises the environmental and economic performance of the

vessels and power plants of its customers.



In 2009, Wartsila's net sales totalled EUR 5.3 billion with more than 18,000

employees. The company has operations in 160 locations in 70 countries around

the world. Wartsila is listed on the NASDAQ OMX Helsinki, Finland.



www.wartsila.com


Wartsila, a leading provider of power plant and ship power solutions and

services, today opened new offices and a workshop in Panama. Located in the

International Business Park of Panama Pacifico, the new facilities are intended

to meet growing market demand from customers in the area. The new workshop

enables Wartsila to offer a wide range of services for engines, electrical and

automation systems, propellers and thrusters, and to provide reconditioning

services.



"Panama's strategic importance as one of Latin America's largest logistics

centres and as a major area for ship servicing will grow in importance along

with the expansion of the Panama Canal," says Markku Aspholm, General Manager,

Wartsila in Panama. "We see this as an excellent opportunity to offer

maintenance and spare part services to vessels waiting for access to the canal.

For ship owners, considerable downtime can be avoided through arranging

maintenance operations while their vessels are queuing."



Each year, some 15,000 vessels pass through the 80-kilometre canal linking the

Atlantic and Pacific oceans. By investing in new machinery, Wartsila has been

able to extend its range of workshop service offerings to customers to include

maintenance of two-stroke components, propulsion unit services, electrical and

automation services, and reconditioning services. The metallurgical repair of

propellers is another important service segment now being offered.



"For Panama, the expansion in service business means increased job opportunities

and a better image, and we are proud to be part of that development," says

Aspholm.





Large modern facilities



The new International Business Park in Panama Pacifico is being developed into a

26-hectare industrial and logistics park with corporate offices, call centres

and facilities for distribution and light assembly companies. Hotels and the

on-site airport provide travellers with easy access. As Panama Pacifico is a

special economic area, certain industries benefit from special labour, legal,

customs, immigration and tax incentives.



Wartsila's newly constructed facilities consist of offices covering 440 square

metres and 1500 square metres of workshop space, a five-fold increase over

existing arrangements. The range of services offered will be extended and the

staff will be increased through the recruitment of 12 new employees. These new

recruits will receive orientation training at the Wartsila Land and Sea Academy.

The company will employ 45 professionals in Panama by the end of 2010.



Operations at Wartsila in Panama include customer support, workshop and field

services and the warehousing of selected components for engine and propulsion

systems. Key customers for the company include international shipping lines

whose vessels pass through the canal and visit its ports and shipyards.



A strategic location with increasing importance



Panama's strategic importance in Latin America has grown in recent years. The

expansion work to the Panama Canal currently being carried out will double the

canal's capacity by 2014. The new lock chambers will be 427 metres long, 55

metres wide and 18.3 metres deep, allowing the transit of vessels with a beam of

49 metres, an overall length of 366 metres and a draught of 15 metres. The

growing number of vessels passing through the canal will increase the need for

maintenance services, while the Special Economic Area will make the importation

of spare parts quick and easy.



Wartsila has been operating in Panama since 2007. In Central America, the

installed capacity of Wartsila power plants totals 1600 MW as well as one power

plant with a capacity of 96 MW. In Panama, Wartsila's installed capacity

includes ship power on 12 vessels.





Media contact:

Ms Marit Holmlund-Sund

Senior Manager, PR and Marketing Communications

Wartsila Corporation

Direct tel: +358 10 709 1439

Direct fax: +358 10 709 1425

e-mail:[email protected]

Internet:www.wartsila.com