Panama Looking To Attract More Overseas Investors

As the potentially lucrative South American property market continues to grow, we are seeing more and more competition for the attention of overseas property investors.  Panama is the latest of the expanding South American countries to see the potential for attracting external investors with the government recently announcing an extension of their property tax exemption laws on both new and old property transactions.  In effect all building permits issued before the 31st December 2009 will have a 20 year exemption, but what exactly does this mean?

In effect owners of such properties will be exempt from the country’s property tax until 2030, taking another cost out of the system and leaving more funds to be invested directly into the sector.  The country of Panama has been one of the more proactive in the region of late, recognising that by reducing the burden for both new and existing property investors, they will attract more external income, attract more visitors and have the opportunity to create a long term steady economy – something which has been missing from so many countries in the region.

So what are the prospects for Panama itself?

Panama is actually slightly different to a number of neighbouring countries in that it has not seen the extremes of economic activity, inflation and volatile interest rates which the likes of Brazil and Argentina have experienced.  Inflation in Panama has been around 1% for some 30 years thanks in the main to a very beneficial taxation system which has attracted substantial external investment.

The country itself is in something of a privileged position with the Panama canal offering a vital trade route for many around  the world, heavy US government investment in recent times and masses of property and land being drip fed onto the market as the US authorities loosen their grip of parts of the country.  However, it is the taxation situation which has seen the country turn into one of the more popular tourist and retirement areas of the world.

As many property investors look for so called “safe havens” for their investments in times of potential economic turmoil, places such as Panama offer a security which few others can match.  The economy is growing, tourism is up and the stable political background to the area has always been a plus for many.  The government have been very focused in their belief that external investment will drive the country forward, something which has been well reflected in the property market.