Thursday, March 29, 2007

Credit Suisse on Panama, March 2007



March 16 2007


Ba1/BBThis week, the International Monetary Fund (IMF) released its Public Information Notice for theArticle IV consultations with Panama which concluded last month. The assessment was quitepositive as the Fund applauded the work the Panamanian authorities have done for their soundmacroeconomic management, which have produced an average real GDP growth of 7.2% in the2004–06 period, coupled with low levels of inflation (albeit high oil prices) and a decliningunemployment rate.

The Fund’s staff supported the governance given so far to the Panama Canalexpansion project and welcomed the safeguards and monitoring put in place to avoid thedevelopment of economic imbalances. Specifically, the IMF praised the authorities’ intention tomonitor expenditures and borrowing strategies. Regarding the all-important public-debt-to-GDPratio, which is currently around 63%, the staff suggested to the Panamanian authorities to anchortheir medium-term to long-term economic policies with a target fiscal deficit of 1% of GDP after2009. With this target and the expected high levels of economic growth rates, the debt-to-GDP ratiowill likely trend downward and become better aligned with average BB-rated credits. The Fund alsorecommended that such a criterion should be part of the Fiscal Responsibility Law currently underpreparation. In other news, Alejandro Ferrer, Panama’s Minister of Commerce, stated on Thursdaythat Panama is working towards having the free-trade agreement with the United States signed onJune of this year. Negotiations concluded last December, and currently Panamanian authorities arelobbying to get the agreement approved by the U.S. Congress. We reiterate our underperformrecommendation on Panama based on valuations. (CR/FU/EM)
Credit Suisse

Tuesday, March 27, 2007

Fatal Attraction-Building and Infrastructure


Panama, Sunday 25 of March of 2007

Panama will attract thousands of Latin investors in the next years.The metamorphosis of the city the real estate development raises a new urgent challenge of urban ordering for the authorities. For the next years it will have to invest about 2 billion dollars in improvements to the infrastructure. Víctor D. Torres vdagoberto@prensa.com

All species of the planet have a special relation with its immediate habitat. From the evolution of the cities, the human beings have identified themselves with their metropolitan surroundings, developing a complex symbiosis in which the city molds its inhabitants as much as they themselves change the large city. A booming real estate sector, Panama faces the challenges simultaneously to improve the territorial ordering that it looks for to solve the deficient road infrastructure and of basic services.

"We must define the city of the future towards year 2019 and that we cannot obtain it if there is no consensus between all the sectors", Juan Carlos Navarro, mayor of the district of Panama, during the forum "Panama 500" that was celebrated last week. But pretensions of country to turn city cosmopolitan as the emergent large cities of Singapur or Dubai are threatened the measurement that continues the rate of disordered growth, with streets in badly shape, a chaotic and obsolete massive transport. "We must take advantage of the experiences other countries and to make of Panama a city with much development, ordered for people", said the minister of House (MIVI) Balbina Herrera.

Boom without precedent In the last years, the real estate impact in Panama has been accelerated. In 2006, the construction registered the highest growth of any economic segment of the internal sector, raising 17,4% 665,7 million dollars. According to the Panamanian Association of Brokers and Promoters of Real estate, the real estate investment went off 25% to 2 thousand 775 million dollars. "the real estate development does not have precedents and the foreign and local investment will continue growing in the next years", assured architect Ignacio Mallol, who does not share the opinion of which the city has grown in disorder. "All my life have constructed with an urban planning of the Ministry of House". But all do not agree. Alliance Pro City was founded on 2006 indeed to express the citizen frustrations by the excesses of the construction. "quality of life with the dangerous saturation of our cities is destroyed", wrote one of its founders, architect Rodrigo Mejía-Andrión.

At least 100 buildings of more than 20 floors are programmed to be constructed in the next years in different points from the city and some already they are in execution, according to the company Prima Panama. Almost 11 thousand apartments will be available, mainly in Balboa Ave., Costa del Este and Punta Pacifica. The hundreds of projects of residential houses are added that are constructed in beach and mountain areas.

Fatal Attraction
The political problems in Venezuela, Colombia, Peru and Ecuador continue favoring immigration towards Panama. In next the four years it is hoped that thousands of Latin American buy more properties in the country, added to thousands of baby boomers of approximately 80 million that will look for second residences in the region. The migratory restrictions imposed by the United States for foreigners also have overturned the glance towards the country, fortified with the regional connections of hub of the Américas de Copa Airlines.

Poor infrastructure But, according to the MIVI, in the next years at least 2 billion dollars will be needed to renovate the systems of sewage system, potable water and electricity. "the State is not removing the greater benefit from the investment", said Raisa Banfield, member of Alliance Pro City. "it is leaving investors use as the existing infrastructure that was designed and planned in the ´50s". Banfield indicates the changes allowed in the zonifications, the gift of the land capital gain and the lack of reinvestment of the gain of the proprietors in infrastructure improvements.

Jaime Salas, municipal engineer of the district of Panama, thinks that it is the best moment to solve the infrastructure problem, which are backdated. There are samples of what the govt have been doing. The projects of cleaning of the bay of Panama, the coastal tape, the urban transport, the Panama-Colon highway and the systems of potable water conduction, are passages in the correct direction.

Sunday, March 25, 2007

Panama is Paradise for Retirees


Panama is paradise for retirees


Cheap real estate, a low cost of living, fabulous scenery and relaxed pace should put this gem at the top of the list for Americans on a fixed income.


Panama is one of the best places in the world for retirees today, combining a low cost of living, near-perfect weather and one of the world's best discount programs for retirees, with up to 50% off everything from public transport to movies, mortgage rates, doctor's visits, electricity, restaurants and airfares.

When you compare Panama with its neighbors, you'll see that it has more amenities than traditional retirement spots such as Mexico and Costa Rica, with lower costs and crime rates. In Panama, you'll encounter less red tape and less interference from local authorities.
To encourage long-term foreign investment, Panama requires no special authorizations, permits or prior registration for foreign investors. The Investment Stability Law, passed in 1998, protects foreign investors from any change in tax, customs, municipal and labor rules for a period of 10 years after an investment is registered. Major companies doing business in Panama include Federal Express, DHL, Sears, Price Costco, BellSouth, Kansas City Southern Railways, Continental and American Airlines, Warranty Company of the Americas and Hutchison Whampoa. Plus, you'll find just about every American franchise you can imagine on the streets of Panama City.

And there are other incentives for foreigners to spend time here, invest here … or retire here. For example:
Newcomers who buy or build a new house won't owe any property taxes for 20 years.
Residents pay no taxes on foreign-earned income.
Tourism investments have 20-year exemptions from import duties, fees for construction materials and equipment, and income, real estate and other taxes.
The U.S. dollar is legal tender in Panama, which insulates its economy from global shocks. During the Asian monetary crisis of 1998, Panama became one of the healthiest economies in Latin America.

Panama's pensionado program Once you become a resident "pensioner" of Panama under the Tourist Pensionado Visa, you are eligible for the most appealing program of benefits for retirees available anywhere in the world right now.
Now, you may be thinking: "Pensioner? Retiree? That leaves me out."
Not necessarily. The rules for becoming a "pensioner" and qualifying for this visa program in Panama are probably not what you'd expect.
In fact, anyone over the age of 18 may apply and can qualify as a pensionado in Panama. All you need is a guaranteed pension income of $500 per month ($600 for a couple). It must be a pension from a government agency (e.g. Social Security, disability, armed forces, etc.) or a defined-benefit pension from a private company. Sorry, but an immediate, fixed annuity doesn't qualify.

As a qualified pensioner in Panama, you would be entitled to:
50% off entertainment anywhere in the country (movies, theaters, concerts, sporting events, etc.)
30% off bus, boat, and train fares
25% off airline tickets
50% off hotel stays Monday through Thursday, 30% off Friday through Sunday
25% off restaurant meals
15% off at fast-food restaurants
15% off hospital bills (if no insurance applies)
10% off prescription medicines
20% off doctors' consultations
15% off dental and eye exams
20% off professional and technical services
50% off closing costs for home loans and more

Crossroads of the Americas Panama is also perhaps the most accessible retirement haven for Americans.

There is a frequent nonstop service to Panama City's Tocumen International Airport. It's a 2½-hour flight from Miami on American Airlines and COPA, Panama's national airline, which also flies from Los Angeles and Orlando, Fla. Continental flies from Houston, and Delta flies from Atlanta. Aeroperlas and Mapiex Aero are two domestic carriers that offer daily flights throughout Panama.

Beware, however, that as accessible as Panama is to the U.S., it's still a foreign country. There are certain cultural differences that you can either accept and embrace . . . or try to ignore and become miserable and frustrated.

Time moves at a more leisurely pace in Panama. A one-hour wait might mean two, and a simple meal out with friends can turn into dancing "tipico" at a local disco until five in the morning. It takes a certain disposition not to lose your cool when, for example -- and this happened to a friend living in Panama City -- the computer repair man phones to say he is estoy llegando (on his way over to your house), only to arrive two days later without explanation . . . but ready to work.

Cost of living Panama has one of the lowest costs of living in all Central and South America:
A U.S.-style home can be built for about $40 per square foot; unskilled labor costs $6.40 per day; a full-time live-in maid costs $120 to $160 a month; a beer at a bar costs 35 cents; a cup of coffee, 30 cents; a haircut and shave can cost as little as $2; an afternoon at a beauty salon is $8; electricity is about 10 cents per kilowatt-hour; water bills are $18 per year; telephone service costs roughly $30 a month; Internet access is $14 a month; wireless is available for a bit more; cellular-telephone service costs about $30 a month plus a per-minute charge of around 22 cents; and cable TV will cost you about $30 a month.

As a foreign resident, if you buy or build a new house, you won't pay property taxes for 20 years, nor will you pay taxes on foreign-earned income. Personal income tax is based on a sliding scale from a minimum of 4% to a maximum of 30%. A Value Added Tax of 5% to 10% is charged on most products and services. Transfer taxes on real estate are paid by the seller, and there is no inheritance tax or gift tax.
Mountains, beaches or the big city? The three best places to buy real estate in Panama are: the mountains of Boquete, the beaches of the Pearl Islands, and the First World metropolis of Panama City.

Boquete: Boquete sits in Panama's mountainous Chiriqui region at an elevation of about 3,500 feet. It's quiet, unspoiled, uncrowded. Mountains, rivers, waterfalls. Lush green hills and great masses of red and purple flowers. This is coffee country, and in harvest season the Indians come down from the hills to find work. The men call and sing to each other as they pick. Their children run through the fields and play in the streams.
The climate in Boquete is ideal, spring like year-round with reasonable daytime temperatures, cool breezes, and chilly nights. Beachfront living is nice, but the mountains of Boquete are hard to beat. If you like Colorado, you'll love Boquete. Three-bedroom custom-built houses start at $138,000 and ocean-view lots are under $30,000.

Pearl Islands: If you're searching for sand and sun, Panama has that in abundance.
The island of Contadora, the seventh biggest of the 90 named islands in the Pearl Islands archipelago, is in the Bay of Panama, just off the coast of Panama City.
This is the stuff of travel-magazine cover photos: turquoise waters, 13 white-sand beaches, secluded coves, bright red and yellow fishing boats, swaying palm and cashew trees, giant coral reefs, coconuts, mangoes, parrots, hummingbirds, pelicans, sea turtles and bright tropical flowers . . . with occasional sightings of gray and orca whales just off the island's shores.
Today the island is a closely guarded secret playground for wealthy and famous political leaders, writers, entertainers and businessmen -- not just from Panama but from all over the world.
Renovated beachfront villas start at $160,000.

Panama City: Panama City is probably the least expensive place in the world to live in a First World city. Here you'll find world-class restaurants, every imaginable luxury, hundreds of multinational businesses . . . all at about half the price you'd pay in Miami, or any other U.S. city for that matter.

Furnished studios start at less than $60,000, beachfront condos from $77,000. A two-bedroom, 1,300-square-foot apartment in the banking district in a building with a pool and gym costs around $150,000. A two-bedroom apartment with views of the bay and maid's quarters costs $160,000 (and rents for $1,100 per month).

By Kathleen Peddicord, International Living

Tuesday, March 20, 2007

Top 5 overlooked luxury vacation destinations of 2007



According to the gourmet-related travel site foodvacation.com, the most overlooked luxury vacation destinations are:



  1. Canada’s Atlantic provinces (including Nova Scotia, P.E.I., and New Brunswick)

  2. Bordeaux, France

  3. Granada, Spain

  4. San Sebastian, Spain

  5. Bocas del Toro, an archipelago of Caribbean isles in Panama

The list considers factors such as the location’s scenic beauty, availability of luxury-level accommodations and gastronomic-style dining, and general ability to offer an extremely high-quality vacation experience. It is based on proprietary research and editorial staff travel during 2006.

Bookmark this post on: del.icio.us - Digg it - Furl - Yahoo! MyWeb - thank you! Filed under: Regions, Central America, Panama, Europe, Western Europe, France, Spain, North America, Canada

Panama's native Indians may hold the secret to good health


Cocoa ingredient 'rivals penicillin' By Roger Highfield

Last Updated: 2:19am GMT 12/03/2007

The health benefits of one ingredient of cocoa are so striking that it "may rival penicillin and anaesthesia in terms of importance to public health".
The ingredient - epicatechin - can reduce the risk from diseases such as stroke and heart failure, Norman Hollenberg, professor of medicine at Harvard Medical School, told the journal Chemistry & Industry.
Prof Hollenberg has spent years studying the benefits of cocoa drinking on the Kuna people on the San Blas islands off the coast of Panama. They drink up to 40 cups of cocoa a week. Among the Kuna, he found that the risk of stroke, heart failure, cancer and diabetes was reduced to less than 10 per cent.
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"Epicatechin could potentially get rid of four of the five most common diseases in the western world," Prof Hollenberg told the journal.
The cocoa that the Kuna drink is homemade and very rich in chemicals called -flavanols, notably epicatechin, which is known to have cardio-vascular benefits.
Flavanols are removed from commercial cocoas because they tend to have a bitter taste.

Monday, March 19, 2007


Check out The
ABC Video on The Retirement Boom hitting Panama's real Estate Market!

Tuesday, March 13, 2007

Newsweek International Blurb on Panama



Newsweek International
Updated: 7:03 p.m. ET March 10, 2007


March 19, 2007 issue - The capital of Panama may be best known for its canal, but there's plenty more to see, from its Spanish colonial heritage to its sleek modern skyscrapers.

STROLL through theCasco Viejo neighborhood of colonial buildings, cobblestone streets and 18th-century churches. Visit the dungeons at the Plaza de Francia, once used by the Spanish and later the Colombians, now a French jazz café.
EAT at Manolo Caracol, where local art brightens the walls and the Spanish chef serves grilled local fish and roasted vegetables (Avenida Central and Calle 3 Oeste, Casco Viejo).
GAZE at the cargo ships passing through the canal from the open-air restaurant at Miraflores Locks. Visit the four-story multimedia museum charting the history of the canal (pancanal.com).
SHOP for handmade baskets and locally embroidered dresses at the Artisans' National Market in Panamá Vieja.

Friday, March 09, 2007

February Trip Photos


Here's the link to the scenic photos from Last month's trip.




Wednesday, March 07, 2007

US Firm White & Case bags Panama Canal Development


US giant White & Case has bagged a lead role advising the Republic of Panama on the redevelopment of the Howard Air Force Base next to the Panama Canal.


The $700m (£357m) project covers 2,750 acres of land and is expected to create around 20,000 jobs. The scheme, known as the Howard Project, will redevelop a 1.7 mile airstrip built by the US but largely abandoned since its forces left the country eight years ago.
Leading UK developer London & Regional Properties has secured initial rights to build a new ‘mini city’ on the banks of the Panama Canal.
The project is expected to be ratified by the Government of Panama in a matter of weeks.
The team at White & Case was led by Miami real estate partner William Walker.
Walker commented: “About 60% of the trade in and out of the US passes through the Panama Canal. When you combine thousands of new homes, hotels, a science park and a golf course, with the proximity to the world’s busiest trade canal, you can see why the global investment community is taking note of this project.”The flagship project will also spark a race among UK advisers to secure the coveted lead counsel role to London & Regional. Herbert Smith, a regular adviser to the developer, has been cited as a leading candidate, although the firm declined to comment.

A Booming Panama City - Wall Street Journal


Good times are expected to keep rolling: The country's famous canal is about to get a multibillion-dollar makeover, and a chunk of its down-and-out colonial city center is getting a facelift.

read the entire article here

PANAMA: Tax Deferred Investing in Panama

PANAMA: Tax Deferred Investing in Panama

Tuesday, March 06, 2007

Baby Boomers Move to New Places to Kick-Start Their Lives- ABC NEWS


Baby Boomers Move to New Places to Kick-Start Their Lives
From Beach Houses to Mountain Towns, Americans Find New Beginning


March 5, 2007 — - As American baby boomers grow older, many are considering moves and asking themselves where they should go. The answer? Anywhere.
"There are very few times in your life when you can move. … And this is one of them," said Sara Davidson, author of "Leap! What Will We Do With the Rest of Our Lives?"
"When you suddenly have no children in school, you may not have a job and you are free to think, 'Where would I really go just for me?'"
Davidson left her life in Los Angeles to replant herself in Boulder, Colo.
"I was sitting by myself in my house with no work, no kids, nothing on my calendar and I thought. … 'Maybe it's time to move,'" she said.
Joe Urby and his wife went to a convention in Panama to explore their options.
Relocation conventions are often held in Panama City, Panama, to instruct foreigners on how they can take advantage of the latest hot spot, where Americans can enjoy a sun-filled life at an affordable price.
"I personally don't want to work until I'm 65 or 70 years old," Urby said. "I'd rather work to be 50 years old and reinvent myself in a different type of business or enterprise in a Latin American country and only need half as much income to live off of."
Another trend is co-housing developments like one in Ann Arbor, Mich. The idea behind co-housing is to create a community -- residents own their own homes but share common gardens, dining halls and parking areas.
"The great thing about this time in your life is that you are not stuck," Davidson said. "So if it doesn't work out. … You go somewhere else."
What Areas Are Popular Today?
There are three hot places to relocate right now, according to Wall Street Journal editor Wendy Bounds.
San Juan, Puerto Rico, is a U.S. territory with an average home price between $250,000 to $300,000. While the property taxes are less than in the United States, the benefits -- like Medicare -- are the same.
Like San Juan, the coastal town of Beaufort, S.C., has homes priced on average between $200,000 and $300,000. The area has a small-town feel with ice cream shops, libraries and theaters, and it's located right on the beach.
The average home price in Loveland, Colo., known for having some of the best skiing and snowboarding in that state, is just $195,000. The city is surrounded by mountain views, and downtown Loveland has tons of restaurants and art galleries.
Bounds said it's important for people to consider what their taxes will be in any new city, as well as what kind of expenses, such as medical care, they may need before making the move.
Copyright © 2007 ABC News Internet Ventures

PANAMA PANORAMA - NEW YORK POST


BENEATH THE TOWERS OF THE CAPITAL LIES A HISTORIC NABE THAT'S GROWING BY LEAPS AND BOUNDS, DAVID APPELL



March 6, 2007 -- DON'T know about you, but when I think "stunning colonial architecture," Central America doesn't even crack the five that come to mind. And Panama? Isn't that the place with the big canal, some rainforests, and skyscrapers? Yep.
Everybody's talking about Manuel Noriega getting out of the slammer, the expansion of the canal, and don't forget the $220 million "Ocean Club" complex The Donald's planning to plop amid the Hong Kong-esque skyline down here by 2009.
But what grabbed me more than any of that on a recent visit is something that's not on many radar screens, but sure will be soon.
On a promontory jutting out 100 acres into the Pacific, Panama City's 17th-century Casco Viejo or Casco Antiguo (old quarter, also known as San Felipe) is as ravishing as any colonial cityscape in the Americas - gracious, glorious shades of Old San Juan, Old Havana and Colombia's Cartagena. El presidente presides along these red-brick streets in a handsome white manse, and the minister of tourism, salsa legend Ruben Blades, lives several blocks away.
The elegant National Theater is here, as are several handsome churches (including the Iglesia San José with its eye-popping gold altar) and great museums covering religious art and the history of the country and canal. And you can stroll on the waterfront promenade and buy a colorful cloth mola from Kuna Indians straight from the pages of National Geographic.
click here to read the full article

Tax Deferred Investing in Panama


No CGT, Says IRS
Saturday, March 3, 2007

Several readers wanted me to clarify the position of the IRS re: Section 1031 of the Internal Revenue Code, also known as "like-kind exchanges."
Here's the scoop: This incredibly powerful wealth-building strategy has been around since 1921 and is still used by the country's most savvy real estate investors. Remarkably, the IRS made this tax deferral possible.
Through like-kind exchanges, property owners responsible for paying taxes to the U.S. government from the sale of either U.S.-based or foreign-based properties can defer payment of the capital gains taxes.
Perhaps most important, like-kind exchanges allow you to use the funds that would have otherwise gone into the government's coffers to significantly increase the net worth of your real estate portfolio.
It's simple to take advantage of, can be used on several properties at once (even between family members), and is an excellent estate-planning tool...but timing is critical, and the IRS is immovable when if comes to granting extensions.
You can also defer capital gains tax on foreign property through Section 1031. Your accountant may tell you otherwise; that exchanges can only be made within the U.S. and that a change to the law in the 1980s ruled out the participation of foreign properties. Technically, he's correct, but he's not telling you the full story.
Here's the important part: It has to be a LIKE-KIND exchange, i.e. you can sell a foreign property and defer the capital gains tax if you buy another foreign property (both properties don't have to be in the same country…but they both have to be outside the U.S.).
You CANNOT sell a U.S. property and defer the capital gains tax from that sale by buying a foreign property.