Foreigners will find that Panama has special regulations which favor investments in real estate.

• Unlike other tourist destinations, foreigners and nationals can:
• Buy almost all kinds of property (except for the rainforest 5km way from the border)
• Own property through shares in corporations, private foundations and trusts
• Open bank accounts in US dollars free from exchange conversion loss, as well as in euros and other hard currencies
• Live without having to file Panama tax returns as long as they are not making an income from their Panama property or their activities inside Panama
• 5 to 20 year property tax holidays, depending on the date of construction of improvements.Foreigners have the added advantage of bilateral investment treaties with the U.S., France, United Kingdom and most European countries which further ensure protection of their investments in Panama.

Just as with any investment, proper due diligence is necessary before paying for any property – even before that first downpayment. A savvy buyer must verify that the seller is the true owner of the property for sale and that no restrictions or liens forbid its sale. The first payment must be accompanied by a written agreement describing the property and executed by a seller property authorized to do so under local law. Appropiate counsel can assist in avoiding unnecessary delays in the transfer of title.

European, Canadian, US and citizens of several Asian countries can stay in Panama with tourist visas for up to 90 days. Full residency is granted to foreigners:

• Investing US$160,000 in a Panama non-retail business and effectively employing 5 Panamanians,
• Holding a US$300,000 CD time deposit (plazo fijo) account in a Panama bank for at least 3 years or in the National Bank yielding US$2000.00 monthly for 5 years,
• Buying a house in Panama mortgage-free for US$300,000 and/or a mixture of the house paid for and time deposit for at least 3 years totalling US$300,000,
• Investing at least US$60,000 to buy at least 10 hectares of rainforest for reforestation
• Earning a pension from a social security or any foreign government pension authority above US$1,000.00 monthly as Pensioner ("Pensionado").Other residence categories exist that are applicable to foreigners sponsored by local employers or educational institutions as part of a foreign worker quota of no more than 10% per company or who marry a Panamanian spouse. Residents for 5 years can apply for naturalization as Panama citizens and have a Panama passport.

Information is valid as of 9/2/2008 and is subject to changes. More information is available from Alvaro Aguilar aaguilar@ nysbar.com Tel. ꧳ 340-6444 / 6638-8707

LOMBARDI AGUILAR & GARCIA – Aquilino de la Guardia St. Ocean Business Plaza, 12th Floor, Panama City, Panama
Tel: ꧳ 340-6444 – Fax: ꧳ 340-6446 – P.O.Box 0831-1110 – http://www.laglex.com

Lombardi Aguilar & Garcia is a civil law partnership registered in Panama with registered number SC-25029 and its members are regulated by the Panama Bar Association

Author: Alvaro Aguilar Alfu

This information is not meant to provide any legal advice. Foreigners are always subject to the laws of their countries of citizenship or residency and should seek appropiate additional counsel in their countries. This information is not intended or written to be used, and may not be used, for the purpose of (i) avoiding tax-related penalties under tax regulations or (ii) promoting, marketing or recommending to another party any tax-related matters addressed herein.

Article Source: http://EzineArticles.com/?expert=Alvaro_Aguilar_Alfu

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