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 Panama’s economy grew 10.5 percent in 2012 and is projected to moderate to 8 percent in 2013. A steady flow of investment is ensured by top ratings awarded by the “big three” risk assessment agencies. Standard & Poor’s raised Panama from BBB3 to BBB2 with a “stable outlook”. Fitch Ratings affirmed Panama’s sovereign ratings at BBB and Moody’s gives a rating of BAA3. The country belongs to a small club of other Latin American countries with similar scores: Brazil, Mexico, Chile and Peru.

Big investments, not to mention the $5.2 billion enlargement of the Canal, have been causing a snowball effect, reaching down into nearly every economic activity. Investors who wish to establish an industrial enterprise can benefit from various incentives if they sign a special contract with the Ministry of Commerce and Industry – a “Contract with the Nation”, as it is called.

Panama is also experiencing demand for immigration. The country is attractive for investors and job-seekers from Latin America and retirees and others from North America and Europe.

Panama’s greatest asset, perhaps equal to the Canal, is the fact that the American dollar is in practice the currency of the country. Officially Panama’s currency is the Balboa which exists in coinage form only, identical in size to U.S. coinage.

The country uses American paper currency, and therefore the Balboa is automatically at par with the U.S. dollar.

This situation derives from the unique association between the U.S.A. and Panama as a consequence of the Canal.


In 1959, Panama’s legislators paved the way for the exploitation of this fiscal legacy and passed Law 18 making provision for numbered bank accounts. Further stimulation came in 1970 with Decree Law 238 providing both more incentives and controls for growth.

At that time there were 10 banks in Panama. Today the count is about 72.

The growth of the banking sector has made Panama the financial capital of Latin America – a safe international haven for money attracted by tax exemptions and the absence of exchange restrictions or controls.

The regulating agency is the Superintendencia de Bancos, which studiously applies the laws to all financial institutions.


Another of Panama’s assets is its geographical position, where world trade routes converge.

This has nurtured the Colon Free Zone, unchallenged hemisphere champion, and has made Panama prime head office or regional H.Q. choice for multinationals covering Latin America and the Caribbean. Panama’s international ship registry, with the largest fleet in the world, also adds boom and brass to Panama’s commercial orchestra.

This diverse activity has spawned a lucrative infrastructure supporting business and service organisations. Insurance, re-insurance, legal, account-ing, trust services, business and tax consultancy all add to the harmony of Panama’s bustling business community.


Part of Panama’s success as a haven for private business can be attributed to the country’s attractive corporate legislation, modeled on that of the State of Delaware. It is relatively easy to establish a corporation in Panama.

Those who wish to form a Panamanian corporation can benefit from the vast pool of experience and the international reputation of the many firms of lawyers and accountants established in Panama.

Panamanians and foreigners are equal before the law. There is no distinction between foreign and Panamanian companies regarding the formalities for their constitution.


A Panama Corporation held by a Panama Private Interest Foundation makes a very strong corporate asset protection structure for both holding passive assets and managing active investments including bank accounts, brokerage accounts, real estate, and ongoing businesses.

Panama’s international banking center has become a global leader partly as a result of the corporate laws for creating excellent asset protection structures since 1927 when the International Business Corporation law was first created. With strict bank secrecy and anonymous corporate ownership laws, Panama offers a unique combination, creating one of the strongest asset protection vehicles in the world.

The Panama Private Interest Foundation law is modeled after its counterparts in Switzerland, Liechtenstein and Luxembourg. The Panama Private Foundation is primarily used as a holding entity for passive assets such as bank accounts or brokerage accounts, and in addition serves as a holding for corporations that may engage in active businesses or investments.

Under the internationally accepted banking regulations relating to due diligence and “Know Your Customer” (KYC), banks around the world require knowing the true owner of an account, whether the account is opened as a corporation, foundation or trust. The advantage of using a Foundation as shareholder of a corporation is that you can legally state that the Private Interest Foundation owns the corporation since the corporation’s shares are issued to the Foundation.

As the Founder, Council or Protector of the Private Interest Foundation, you can designate Beneficiaries who are appointed through the Foundation By-Laws. Under Panamanian laws, the assets distributed to the beneficiaries of the Private Interest Foundation can legally avoid probate, gift taxes, estate taxes, inheritance taxes or legal delays at the moment of distribution of those assets to the beneficiaries.


As is well known, Panama is a tax haven because of its income tax structure, founded on the concept of taxing income only if it is earned within the national territory. Transfers of funds for any purposes in and out of the country from abroad are completely free of tax.