Setting up shop in Panama by Panalex

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Setting up shop in Panama - Presentation by Alvaro Aguilar Alfu 5 Jun 2014

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									 Setting up shop in Panama
University of Charleston International Practicum
                   June 5, 2014
                   Tryp Albrook


              Just South of the Border
●20 countries in North America (Mexico), Central America (from
Guatemala to Panama), certain islands of the Caribbean and South
America, Latin America now has a collective population of over 490
●The GDP of many countries in Latin America grew. Brazil experienced

5.1 percent growth, Mexico 4 percent, Chile 5.9 percent and Argentina
8.5 percent. These four countries account for 83 percent of the gross
domestic product of Latin America
●The strong growth was accompanied by declining inequality, poverty,

and public debt levels.
●The net commodity exporters—that is, the South American countries,

which exhibited increasing commodity dependence and an export base
highly concentrated in primary goods—have grown, on average, 4.5
percent a year since 2003. But the rest of the region—Mexico, Central
America, and the Caribbean—was much less buoyant, growing only
about 2.5 percent a year.­

Where to do business?

               Purchasing Power?
                 Friend or foe?

Where to do business?

     Air? Sea? Land?
   Time vs Convenience
                  Jaguar of the decade

●Panama’s economy has seen rapid growth in recent years, with the last
five years averaging 8.75% yearly increases in GDP (IMF, 2011).
●The current labor force boasts 1.509 million with an unemployment rate

of 4.4%
●The majority of labor is concentrated in the service sector with 64.4% of

the population working in services.
●Bilateral investment protection treaties with U.S., Germany, U.K.,
●Real estate and construction surge (US$1.2 billion)

●Panama Canal Expansion (US$4 billion)

●Fueling growth is the development of Panama’s infrastructure as an

emerging country, specifically a project aimed at widening the Panama
Canal which is expected to be completed in 2016.

            Panamá as financial center

●Income earned from international activities is exempt of income tax
●Interest earned from Panama bank accounts is exempt from

●100 years using the U.S. Dollar – No foreign currency restriction

●Economic and political independence preserve tax and corporate

●Financial center with 100 banks, multiple trustees and insurers

subject to quarterly government supervision
●Intersection of fiber optic cables routes between the Americas

●Double     taxation agreements with Luxembourg, Cyprus (under
negotiation), Italy, France and 12 countries
●Direct flights to capitals of the Americas, Amsterdam and Madrid

                                                 6   7   8   9
                    The Essentials
Which form to take?
●   Sole propietorship
●   Unlimited liability company
●   Limited liability entities (corporation, LLC)
●   Branch of foreign entity
Tax registration
●   National tax registration ( online)
●   Local tax (Municipality – online only in Panama City)
Business registration
●   Business license ( online)
●   Social Security Employer ( online)   10
                   More requirements
Registration of Employment Agreements

Opening of Severance Fund (“show up for work” prize)

Construction Permits (0.01% of construction value)

Acquiring Title to property

(or) Registering Rental Agreement (1 month deposit)

Opening Bank Account and passing KYC test

Getting Electricity and Water (1 month deposit)

P.O. Box ($40 yearly)

Car Registrations ($27/car yearly)

Payment of Taxes (up to 25% of net local income yearly)

Special permits (Restaurants, Hotels, Industries, Professionals, FTZ)

                        Case studies
A Colorado couple performs 360 marketing campaigns for second

home developments. With the slump in US real estate, they heard
that Panama has real estate projects catering to foreigners so they
plan to do the same from an apartment in Panama.

3 California thirty-somethings have raised capital to buy/rent a

property in Casco Viejo to set up a bar and boutique hotel.
A New York businessman sets up an office in Panama to buy wine

from US, Chile and Argentina.    New brands keep coming up all the
time and he plans to resell them in emerging markets like China and

For more information
          ●   Contact Alvaro Aguilar
          ●   Aquilino de la Guardia St.
              Ocean Business Plaza, Piso
              12, Ciudad de Panamá,
          ●   Tel: +507 340-6444
          ●   Fax: +507 340-6446
          ●   P.O.Box 0831-1110
          ●   E-mail: aaguilar@
          ●   www.laglex. com
                           Jun 5 UCVW Setting up shop in Panama.odp


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