Panama: Real Estate Market In Panama

Most likely, you have heard of the recent real estate BOOM currently occurring in the Republic of Panama. Perhaps, there are several internet sites you have read or visited searching for further information on this topic. Or maybe you are one of those persons that have taken already the decision of buying an apartment or a beach house, but you don’t know where to start or wish to start your own real estate project in Panama, yet still need more information.

Well, I have prepared this article in a practical and simple way in order to guide you in our real estate market. You will find this paper helpful, whether it’ll be for the direct buying of a property or to start your own real estate project in Panama or simply to have a more complete notion of this rising real estate BOOM.

What is happening on in the Panamanian Real Estate market?

What is going on in Panama is without any sort of precedent. The market is growing rapidly and such real estate development has never been experienced before in our country. Monthly, we are visited by hundreds of foreigners interested in buying real estates in Panama, in the City, the coasts and the mountains.

The constant rising of the value per square meter is almost in a monthly rate. For example: in January, 2006 it was possible to find apartments in Panama City for around US$ 1,000 per square meter, which is nearly impossible nowadays (US$ 2,000 – US$2,400 and rising). This has generated the value per square meter to triplicate in the city and even to quadruplicate in the rest of the country. The main real estate broker associations have foreseen that the general value of the land in Panama could rise up to 30% to 40% in the next three years, due to this price increasing flow.

Extreme luxury towers of over 100 stories, residential houses of over a million dollars, yachts and marine clubs, huge luxury hotels, golf camps designed by well-known international specialists, as well as top of the line malls, are currently under construction or in process of delivering in the next couple of years; renovating the face of the city into an international and cosmopolitan metropolis.

Promoters, private investors and international real estate companies, from United States, South America and even Europe, have started the construction of real estate projects of great impact. Also, a great number of international real estate broker companies are currently setting up businesses in our country per month.

Specifically we could say that six of the highest towers under construction in Latin America are being built in Panama City, within the areas known as “Avenida Balboa” (this area is projected as the skyscraper in front of the sea in the city). We could mention, among others: Aqualina, Aquamare, Vitri, Ocean Two and One and Los Faros de Panama, ready to be delivered for the year 2009; besides the hundreds of apartment towers bring developed around the city.

Great beach lot projects, island resorts, as much as in the Caribbean Sea (Bocas del Toro) as in the Pacific Ocean (Pearl Islands); as well as delightful retirement mountains (Boquete, Altos del Maria) are part of the avalanche of real estate projects that seems just to be starting.

Which are the real factors that caused this real estate boost?

We all know that after the hostilities occurred in Panama in 1989, the Panamanian real estate market remained hesitant and the small amount of inversions in this sector were led in its majority into commercial projects. Fifteen years had to run by after this event (year 2004) for the leaders in the tourist sector of the Panamanian government (led by the well-known Panamanian singer Ruben Blades) to take action initiating a serious campaign for the enhancement of the country’s image. Panama was shown as “the path less travelled”, stressing not only in the advantages of being and international banking services and offshore centre, but also in the social, tourist, ecological and geographic elements that until then were unknown to the rest of the world. This successful campaign was promoted worldwide in the main international television chains, in Europe as well as in the United States.

Added to this, something that has to be acknowledged, for the year 2003 Panama comes back to the international field with the announcement that a young Panamanian lady (Justin Pasek) won the Miss Universe contest, situation that allowed by extension the range of advantages of our country as a tourist and commercial destiny.

Between the years 2003 and 2005, little by little the number of visitors increased as a consequence of these two important catalysts.

Meanwhile, small groups of professionals (lawyers, brokers, and independent professionals) were offering seminars about the Panama’s advantages or organized small real estate tours to foreigners. Several articles published in international retirement magazines (generation known as “Baby Boomers”) and second residence abroad, started to acknowledged Panama as one of the best countries in the world to live at high standard levels, but with low costs; all of this caused due to excellent projects addressed to this market, as “El Valle Escondido” in Boquete – Chiriqui or “Altos del Maria” in Panama.

One of the main triggering factors of this real estate boost in Panama occurred last April 24^th, 2006, when Donald Trump announced in New York City the construction in “Punta Pacifica” area in Panama City of a 65-story tower branded as “Trump Ocean Club International Hotel”, with a cost of 220 million dollars. Further more, on October of the same year, the national acceptance for the enlargement of the Panama Canal was given, initiating construction works in the year 2009.

Starting from this point, there is no doubt that Panama would become the centre and role model of real estate investments in the area, situation that has been increasing exponentially.

Which are then Panama’s advantages as a real estate destiny?

Well, let’s get into the subject. Let’s study those advantages that Panama offers and that will allow you, effectively, to take the decision to buy a property in our country, as many foreigners have done. From the real estate point of view, we could mention:

• Panama offers the best banking centre in the region, with the use of the American dollar as legal currency and with top of the line banks (HSBC, CITIBANK, BBVA, etc.) which will facilitate the process of obtaining mortgages for foreigners, offering a fast international bank transaction process for deposits and reservation of properties.

• Panamanian immigration law has one of the best retirement programs in the world, which will allow you to become a “resident” in less than two months. This program offers several incentives as the possibility to import goods and personal values into your new properties free of import duties, as well as motor vehicles also free of import duties.

• An outstanding service, utilities and infrastructure system for properties, such as: high speed Internet (there are five of the main Internet interconnection Networks crossing through Panama), Cable and Satellite TV, public potable water, wide range of telephony offer, fixed and cellular.

• The opportunity to buy extreme luxury apartments with ample spaces to a price amazingly low compare with apartments of the same quality in USA and Europe.

• The opportunity to acquire properties exempt to the 0% of property taxes for a period of 5, 10, 15 and even 20 years (depending on the date of construction’s commencement).

• A vast variety of companies and bilingual professionals involved in the real estate market.

• If you are a businessman, Panamanian law has fiscal benefits to constructors and promoters that start real estate projects in the country.

Additionally, there are other advantages to take into consideration that even when you are not directly involved in the real estate business, they can become helpful at the moment of taking the decision of buying a property:

• Panama has been acknowledge for companies as Pinkerton Intelligence Agency as a high standard security country in contrast with the current situation in neighbouring countries.

• You can hire house keeping services for a low cost (around US$ 150.00 per month)

• Up-to-date high standard technology available.

• The opportunity to acquire products from all over the world in the Colon Free Zone, due to the noticeable position of the Panama Canal and the transit of over 14,000 ships per year.

• The conditions of Panamanian taxation law allow the tax payer not to pay taxes on bank interests or even income taxes when the service and/or business are performed abroad.

• An exceptional geographic position to perform international commercial transactions, with fast access to the Pacific Ocean as well as to the Atlantic.

• Panama has a low-risk profile in regards to natural disasters, such as earthquakes and hurricanes.

These are some of the many advantages that Panama can offer if you decide to acquire a property in our country, whether it is to invest or simply to relocate and enjoy life.

Which are the most attractive places to buy properties?

To better answer this question, we have to divide our answer in four groups: Panama City, the mountains, the Pacific shore and the Atlantic shore.

Panama City

The main seaside view luxury condos are found in Panama City, distributed as follows: Balboa Avenue, Punta Pacifica and Costa del Este. The region known as “Avenida Balboa” has become the icon of real estate development in Panama. The reason for this is due to the current construction of luxury residential apartment towers with an outstanding architecture with a height of over 75 stories, to be concluded in the year 2009. Balboa Avenue offers quick access to the whole city, the banking area, as well as to the main avenues, given that it is the coast boulevard. One hundred meters away from this area you will find restaurants, bars, hotels and several facilities. European promoters, American and South Americans have foreseen the real estate potential in this area, equivalent to condos phenomenon occurred in Miami during the eighties.

“Punta Pacifica” area was developed over the old City airport (for the reason that it was next to the pacific coast and inside the city). This region was designed specially to provide an answer to the upcoming real estate demand. The area offers beautiful projects and high standard apartment towers. You will also find in “Punta Pacifica” malls (Multiplaza Pacific), Hospitals (John Hopkins Hospital), corporate buildings and access to highways (Corredor Sur) which will grant you fast access to the international airport in 15 minutes. Is also in this sector where the Trump Organization and K Group will raise their promoted real estate project.

Another of the desired areas for foreigners is Costa del Este. The “other city” as is referred to was also conceived and designed for the development of apartment buildings and closed residential communities. It is the perfect place for a foreigner to completely relocate in Panama. This region has it all schools, malls, wide avenues; this sector offers several real estates with a gorgeous view to the sea or to the city, located five minutes away from the city and only ten from the international airport.

It also important to stress out that this luxury tower’s development is not circumscribed to these few areas. There are also urban projects in the region of Punta Paitilla, Coco del Mar and San Francisco (all of them in front of the sea), as well as beautiful developed residential areas in the surroundings of the Panama Canal, such as Albrook, Clayton and Quarry Heights.

The Mountains

Gorgeous mountain projects with cool, fresh weather from 18Cº to 20Cº (64ºF to 68ºF) have been developed in the provinces of Panama, Cocle and Chiriqui. In the province of Panama, the most representative mountain project is found in the region of Sora, 75 minutes away from the City and known as “Altos del Maria”. This project consists of a well-organized foreigner’s community with utilities and spectacular landscapes.

Another region of urban development can be found in what is known as “Tierras Altas” (High Lands) located in the province of Chiriqui (Volcan, Boquete and Cerro Punta). Among these places, Boquete has become one of the most relevant real estate centres in the whole country, given that it counts with a wide supply of real estate projects, residential houses in the mountains with amazing landscapes. Boquete has been recognized by specialist in the subject as one of the best places for retirement in the world, fact that has generated in this region the highest concentration of retired foreigners in the country.

Finally, in the province of Cocle, you will find the region known as “El Valle”. Located in an extinguished volcano, El Valle offers the perfect weather, rivers, waterfalls and tourist attractions. El Valle is at present taking measures to become one of the most wanted regions in the field of mountain real estate properties, owing to its facilities and infrastructure, as well as to its proximity to Panama City (1hr. 45 mins.)

The Pacific Shore

The supply of lots in front of the sea starts in the pacific coast line of the Province of Panama, and it goes all the way until the mid-country provinces. Most Panamanian high-class families have their beach houses on this sector; due to its proximity to the City (45 minutes). This coast line offers residential areas such as Chame, Coronado, Punta Barco, San Carlos, Gorgona, among others. Within these beach residential areas we have to remark the region known as “Coronado”, region which counts with one of the best professional Golf camps in Latin America, pools, beach clubs, equestrian clubs, several restaurants and great supply of houses and apartment buildings in front of the sea.

Additionally, further on in the pacific coast line, we can find the region of Playa Blanca. Since the development of the macro hotel project known as “Royal Decameron” in the area, the infrastructure and general surroundings have grow significantly. In Playa Blanca, you will be able to find casinos, swimming pools, restaurants, bars and discotheques, beach clubs and a great variety of real estate projects just right next to the beach.

Finally, we should also mention the recent development experienced in the seaside areas the provinces of Los Santos (Pedasi) and Veraguas, such as Playa Arenal, Punta Mala and Playa Venao, among others; which have become the new destiny for many foreigners (mostly Europeans) that are searching for great extensions of lands in front of the sea.

The Caribbean Shore

In this area, we can find a similar supply of real estate properties to the one found in the pacific coastline of the mid-country provinces. There are several properties in front of the sea, as well as vast extensions of hectares next to the beach. This region is located two hours away from Panama City and it offers the option to buy in the well-known Colon Free Zone.

On the west side of the country, you will find in the Caribbean coastline, the spectacular region of Bocas del Toro, where properties next of the sea or in the middle of an island are simply astounding. A great variety of international real estate companies have started projects in the crystal clear waters of Bocas del Toro. Bocas is one of the most known tourist destinies in Panama, located only 1hr and 45 minutes away by plane. It offers an amazing night life, restaurant, hotels and tours around the different islands of the area. Bocas del Toro coastline has become the most wanted real estate choice for retired or pensioned foreigners in the Caribbean.

Among the best areas of Bocas del Toro you can find Isla Colon, Boca del Drago, Red Frog Beach and Playa Larga. The residential project known as Red Frog is of renowned reputation in the international spheres, given that it offers an incredible exclusively designed development for foreigners in one of the most beautiful islands in Bocas del Toro, Bastimento’s Island. The project has marine clubs, restaurants, houses and a dazzling infrastructure.

Islands

The most notorious group of islands is found in Bocas del Toro, given that, as we already mentioned it offers a wide variety of real estate projects in the Caribbean, scenario of several TV series broadcasted around the world. The most important islands of the archipelago are: Isla Colon, Isla Bastimentos, Isla Solarte, Isla Cristobal, Isla Popa and Isla Zapatilla. Likewise, we can found several small independent islands for private projects. Bocas’ islands counts with an astonishing ecosystem for scuba diving, marine activities, and bird watching.

Another group of islands that is raising popularity is the real estate market found in the archipelago of Mosquito’s Gulf, in front of the pacific coastline of the province of Chiriqui. This Gulf has been granted by the Panamanian government the title of Ecological Reserve, as a consequence of the great diversity of marine fauna found in the area. Most of the islands have registered real estate titles, which allow its prompt buying. The surroundings of these islands are famous for being one of the best places in the world for Black Marlin fishing.

The Pearl Islands are located within the Gulf of Panama, three hours away from the city in the open sea, offering a group of more than 35 beautiful islands with spectacular landscapes, surrounded by coral reefs and vast vegetation. The beauty of this area attracted the production team of the popular reality show “Survivor”, who has filmed several times in this region.

Finally, you will find the island of “Coiba” in the Pacific Ocean, formerly a prison already abolished and currently a National Park. The main island and its small islands such as Isla Iguana have become in top destinies for scuba diving and water sports.

What should I and shouldn’t do when buying a property in Panama?

As a final tip, we will recommend you some practical advises in case you decide to buy a property in Panama:

• Recommendation # 1: You can visit the projects on your own, but it is advisable to be assisted by a professional who could properly introduce you to the promoters, avoiding the pointless increase on the price.

• Recommendation # 2: If you are not fluent in Spanish, you should ask the promoter to get you the contract both, in Spanish and in your native language, for all legal transactions to be performed.

• Recommendation # 3: Once you reserve your property, immediately ask for a receipt and the signature of the Promissory Purchase-Sale agreement.

• Recommendation # 4: Once you have signed this agreement, double-check the deadlines for the subsequent down payments of your property. If you miss one of these, you are exposed to lose the money already paid to the promoter.

• Recommendation # 5: Try to take a quick decision on acquiring the property; given that once you reserve it, the price is then frozen. Due to the current demand in the market, prices on apartments rise at a monthly rate.

• Recommendation # 6: Once you reserve your property, look for the professional advice of lawyers or real estate brokers, in order to verify all documentation and contracts are due to the procedure of registration.

• Recommendation # 7: Think about the possibility of acquiring your property through a Panamanian corporation. They are of fast incorporation, considerably cheap and easy to manage. Using a corporation to acquire a property in Panama will ease a future transfer of it, if that’s the case.

Article by Emilio José Cornejo Vernaza
M & E Abogados

Subscribe to this blog's RSS feed

”Where are you staying? La Veranda?” asked the woman at the counter, in an English that had a heavy West Indian accent. ”Well that’s right over there,”

She pointed out a blue house, just on the other side of the small dirt runway, and I headed that way. The rain, and the urgency of settling into a dry place with my gear, had distracted me so much that it took me another 20 paces for it to register — I’d just had a conversation in English (West Indian-style) in Panama.

The Bocas del Toro Archipelago, on the Caribbean coast of western Panama, is a tiny enclave of English-speaking Afro-Antilleans in a Spanish country. History, politics and labor migrations have created a handful of these colonias, as they’re called, all along Central America’s east coast — Nicaragua and Honduras, for example, have the Garifunas, and there are Afro-West Indian communities in Limón, Costa Rica; Colón, Panama, and on the tiny Colombian islands of San Andrés and Providencia.

The colonia in Bocas Town, on Colón Island, came about because the United Fruit Company built a headquarters here around the turn of the century. The company hired Caribbean migrants, mainly from Jamaica, to work banana plantations. When United Fruit moved to the Panamanian mainland some years later, the Caribbean workers stayed on the islands, settling in to fish, farm and trade.

More than 100 years later, Bocas Town still feels like an abandoned company outpost. Walking quickly along dirt streets, I noticed that the houses were mostly wooden two-story cottages with identical silhouettes: wide porches; framed, shuttered windows; and, occasionally, wood gingerbread trim. Many appeared on the verge of collapse, others were well-maintained and boldly painted — red with green, yellow with blue. Laughter, music (gospel and B. B. King), and the sputter of old car engines being tinkered with drifted through the air — the sounds of Saturday on any small Caribbean island.

While I was intrigued by Bocas’s unusual past, I had other reasons for including it in my trip to Panama last January. With 9 islands, 51 keys and more than 200 islets spread across the lagoon of Chiriquí, the Bocas del Toro Archipelago is like a mini-Caribbean off Panama’s coast. But it gets a fraction of the Caribbean’s tourist traffic, and there are no resorts or big hotels on the islands, only small inexpensive guest houses. A national marine park in the lagoon, on the nearby island of Bastimentos, protects the archipelago’s nearly pristine reef for snorkelers and divers.

Shivering under a thin blanket on my last night in Panama’s mountains, I dreamed about swimming in blue-green waters, lying on empty beaches and snorkeling with the equipment I’d lugged from New York.

Bocas Town, the provincial capital on Colón, the archipelago’s main island, didn’t have much of a beach (the public beach there fronts on the ominously named Bahia Sand Fly), but it is where most travelers go because of its central location. From there I could rent little boats to take me on short day trips to the marine park, 20 minutes away, and to uninhabited islands.

By the time I reached La Veranda guest house, the rain had slacked to a gentle drizzle. I’d found La Veranda in a roundabout way. When I called a nearby guest house, Cocomo on the Sea, it was full. I asked the friendly sounding American owner if she could recommend something, and she suggested La Veranda, which wasn’t in either of my guidebooks (both had been published before it opened two years ago). I liked the name, picturing a house with a big, cozy porch. On this instinct alone, I called the day before I arrived in Bocas Town and booked a single with bath for $25.

Not knowing what to expect, I realized after I walked up the old wooden stairs to the big second-story porch that I’d stumbled upon a rare find — a cheap guest house with terrific style. Heather Guidi, a former nurse from British Columbia who bought and restored the house, had turned it into a funky Caribbean fantasy of blue, yellow, purple and sea-green walls, original wood plank floors, ceiling fans and gingerbread trim. In my room were many things that pleased me — thrift shop mirrors, a billowy white mosquito net, handmade chairs painted turquoise, and, beside the queen bed, a lamp that made me laugh with its shade speckled with tiny sea shells.

The large veranda had an antique sofa and comfy wicker chairs with batik cushions. There was a kitchen at one end, with a big refrigerator, a stove and a sink. ”You’re welcome to use it,” Heather said, and told me the grocery was two blocks away.

Lounging on the couch and chairs were three of my fellow guests, two blond crewcut men, and an earnest blond woman, in their 20’s. One young man was working on a computer, the second was cleaning the sink; the woman was reading the Bible. They were freelance missionaries from Colorado, on a break between projects in Central America.

I found this out because shortly after I unpacked, the rain came back, this time in exuberant waves, sheet after tropical sheet. There was little to do but sit on the veranda, chat and wait for a break in the clouds. A brief one did come, and I ran down the street to the grocery store, the ”Epicenter of Savings,” for coffee, milk, water, bread and cheese. On my way back, drops began to trickle down again. I scurried up the stairs as thunder began to roll.

It was not the rainy season, Heather said. In fact, it was the time of year that is supposed to have the lightest rainfall. This made me hopeful that tomorrow would be sunny. My mood lifted, and when the missionaries invited me out for a beer, I joined them.

The next morning, the sky was gray, but there were some breaks in the clouds that encouraged optimism. After fixing coffee and eating some fruit, I walked down Bocas Town’s main road to the town center in about 10 minutes. Along the harbor was a road lined with fishermen’s bars, dive shops and places that arranged boat excursions. I got as far as asking about a snorkel expedition when the gray clouds turned black again, and I headed back to the guest house pronto.

But the rain caught me in the middle of Calle 3, Bocas Town’s main street. I jumped onto a creaky wooden porch where an elderly man sat silently, watching the nearly-empty street. He’d caught my eye because his house listed about 30 degrees to the left and appeared to be only moments from collapse, and because he looked like a member of the Buena Vista Social Club, distinguished in a starched white guayabera. In an Afro-Antillean town, the man stood out, a reminder of Hispanic Panama.
His name was Don Mario, and when I introduced myself, he immediately got up and went back into his house. I heard some scraping and banging, and he emerged holding an old steel folding chair.

Rain pounded, I sat, and Don Mario entertained me with episodes from his 83 years, beginning with the time he ran off, in his 20’s, to Havana. ”Oh, mi amiguita, what a time it was!” he said, his eyes clouding wistfully. ”I danced in the clubs, I heard all the great musicians, saw the great comedians — it was the best time of my life.” More stories emerged, of his travels around South America on a merchant marine vessel, his adventures in Panama City during World War II. He did not explain in detail how he’d ended up as a tailor in Bocas Town, but I did find out what made his house tipsy: an earthquake in Bocas about 10 years ago. In any event, explained Don Mario, it would be torn down soon, for, like many Bocas old-timers, he was selling his property to an investor who would probably put up a little hotel, or a restaurant, to join the others now popping up along Calle 3.

After my conversation with Don Mario, I drifted along the main street, noticing now how tourism was reshaping the sleepy little backwater. There were three or four restaurants with Italian names and owners, and the clatter of hammers announced renovation and new construction. Over a terrific, simple lunch of fish and rice at Restaurante Kuna, run by Kuna Indians from eastern Panama, I overheard Latin men with mustaches speaking rapidly into cell phones, while their gringo lunch companions questioned them, in bad but enthusiastic Spanish, about real estate opportunities.

I realized I’d arrived in Bocas Town at that pause before the tourism machinery kicks in, before the friendly smiles of the locals turn into professional grins (or irritated masks). Suddenly, I didn’t really care if I ever used that snorkel here.

The rains continued to pass over La Veranda. Between downpours, I walked in the neighborhood, met the neighbors and explored the little piers that jutted out from the light brown crescent-shaped beach opposite Sand Fly Bay (which, happily, didn’t live up to its name). On one old wooden pier, a group of children sang me Spanish pop songs, spoke to me in the local English patois, and showed me how to fish with a plastic line.

And then, one afternoon, the sun appeared, and I ran down to the central docks. Suddenly, everything was in color: green sea, blue sky, little red and white boats. It was now or never — I hired a small boat (a bote) to ferry me across the bay to Isla Bastimentos (for $1), the next largest island in the archipelago, and home to an Afro-Antillean community that was preparing for a big carnival. (I had been eagerly reading the posters that announced the parades.)
In a tiny wooden vessel that had been carved, Indian style, from a single piece of wood, I set out with two boatmen, one talkative, the other strangely silent. Suddenly, about five minutes out to sea, the wind kicked up, sending the little craft slamming down with a loud thump. The silent boatman didn’t even flinch.
”Don’t worry,” said the chatty boatman. ”He’s deaf.”

”Deaf?”

”He can’t speak, either. We’re a team — he drives, and I talk.”

We put in at Isla Bastimentos, and I noticed there weren’t any other taxi boats. So I asked the partner to wait while I explored the island for around 30 minutes. I offered him an extra dollar, and he said O.K. Seconds after I turned my back, I heard the motor sputtering; the boat turned around and sped across the bay back to town.

Isla Bastimentos has one main street, about a half-mile long. At one end, women were playing drums and chanting and clapping carnival songs. At the other was an open-air bar jutting into the harbor. It was old and funky, with missing floorboards and a strong smell of rum and sea salt. Only after I walked in did I notice that the only other woman in the place was the bartender.

Soca music pounded and echoed across the empty dance floor, and so did my heart. Was I stranded? Had I taken enough cash in case I had to spend the night? Worst of all, the sky was turning into a gray soup again. My face must have telegraphed my panic because moments later, one fisherman had bought me a beer and another had gone to look for his neighbor. ”Yuh no worry,” said the neighbor in patois, ”I can take you back in my boat.”

The rain held off until just before we pulled into Bocas Town harbor. Then the sky burst, all at once, and the showers came down, thick, warm and comforting.

The bottom line: an island enclave

I spent $38.62 a day on food, hotel and transport during four days and nights in Bocas del Toro. Prices are in United States dollars, which are widely used in Panama. The international dialing code for Panama is 507.

Transportation

From David, in southwestern Panama, I flew to Bocas del Toro for $24. My flight back to Panama City cost $49.35. Both were on Aeroperlas, Panama’s main domestic airline; (507) 757 9341, on the Web at www.aeroperlas.com.

My guest house, La Veranda, was a five-minute walk from the airport. Water taxis, which leave from the main dock by the harbor, charge about $1 for the 15-minute ride to Isla Bastimentos. Boat owners congregate at the pier, offering various excursions; I would have gone on a four-hour snorkel trip to nearby Hospital Point if it had ever stopped raining. The price I negotiated was $8.

Street addresses are not commonly used in tiny Bocas Town; the streets, arranged in a grid, have numbers or letters. Most hotels and restaurants are on or near Calle 3, the main drag, which can be walked from end to end in 15 minutes. The airport is near the center of town.

Places to Stay

The four-room Veranda guest house, telephone and fax (507) 757 9211, www.laverandahotel.com, had a sense of personal style that is rare in budget lodgings. Rates are now $35 a night, but my large room cost $25 a night and had its own bathroom with a shower, a queen bed, and lots of shelves and pegs for hanging and storage. La Veranda doesn’t serve breakfast, but the guest rooms open to a large, airy veranda with couches, a dining table, chairs and a communal kitchen. Perhaps the only drawback is that it is two blocks away from the sea (guests have access to the hotel’s swimming dock).

If a sea view is a priority, I’d recommend the nearby Cocomo on the Sea guest house, (507) 757 9259, www.panamainfo.com/cocomo, a more upscale, more conventional place with an inviting deck overlooking the water, and four rooms, which I couldn’t inspect because they were full when I visited. Rooms cost around $50, with breakfast.

A budget standby is Las Brisas Botel, (507) 757 9248, where a rather drab, dingy room without windows is about $25 a night. The draw of the place is its spacious breezy deck overlooking the water.

Where to Eat

La Ballena, (507) 757 9089, is an Italian-owned restaurant on Avenida E one block off Calle 3. It’s upscale for Bocas Town — dinner entrees are $9 to $12 — but the portions are huge. My meal of tomato and mozzarella salad, followed by spaghetti with octopus sauce, could have fed two. The bill was $18 with a glass of surprisingly good house wine.

Kuna is an unpretentious restaurant across from Las Brisas Botel. Seafood dinner entrees (around $7) are served on a wide, breezy porch overlooking the main street. I had very good shrimp and calamari in garlic sauce, and returned the next night for grilled red snapper. There is no phone. DAISANN McLANE

NYTimes

HISTORY

 Panama has been a country of commerce almost from the time the New World began to be colonized. Centuries before the Panama Canal was built, merchandise crossed this narrow isthmus between North And South America on mule trains. Gold and silver plundered from the Incas of Peru traveled this way to be loaded onto galleons bound for Spain. The same galleons brought luxuries from Europe, bartered at fairs at the Atlantic ports of Portobelo, Chagres and Nombre de Dios and carried back across by the same mule trains to the “Southern Sea” destined for colonies along the West Coast of South America.

Since 1917, only three years after the opening of the Panama Canal, the possibility of having a free zone area in Colon was discussed. It was not, however, until the end of WWII that the idea became substance. During the war many locals obtained employment in the construction of defense facilities and service facilities for the movement of troops, and with the end of troop arrivals, came the hard times. Later, Dr. Enrique A. Jimenez, President of the Republic in 1945, took the initiative to make the free zone project a reality, making use of the geographic position of the ports and the interoceanic waterway, a compulsory route for worldwide navigation. He recommended the reconsideration of a project prepared by George E. Roberts, Vice President of the First National City Bank of New York, which contemplated the creation of a free zone area in Colon and which had been submitted to the Government in 1929.

In 1946, the Government employed Dr. Thomas E. Lyons, renown authority on free zones, to carry out a feasibility study in the area suggested for the project. Based on his recommendations, the Government approved Law No. 18 of June 17, 1948, which creates the Colon Free Zone as an autonomous institution.

Nowadays, at the city of Colon, commerce goes at fast pace, in volumes which the earlier traders would have been unable to conceive. The reason is the Colón Free Zone at the Atlantic mouth of the Panama Canal. Its growth in recent years is eclipsing the Canal itself in terms of the country’s progress and reputation. Today, the Zone occupies an area of more than 800 acres. Over 2000 companies operate or are represented there. Containers clog the roads; buyers and representatives of thousands of trademarks flock in and out to generate the staggering $11 billion which the Colón Free Zone turns over now in the course of a year.

Colón Free Zone is easy to understand. It is a segregated, walled area where companies may import free from import duties or quotas and with a minimum of taxes. The obvious result, from the beginning was that merchants could import in bulk from the Far East, Europe and the U.S.A. and re-export in quantities to suit their Latin American clients.

Expansion has been steady and the original walled area of 94 acres had been filled with warehouses and showrooms by 1978. Hemmed in by the city of Colón around half of its perimeter and with the waters of Manzanillo Bay lapping almost to the foundations of the buildings on the other side, there was nowhere for the Free Zone to go - except into the bay with landfills and across the bay where former Canal Zone land had reverted to Panama under treaties between Panama and the U.S.A.

Accordingly, 131 acres were set aside at Old France Field, so named for an old airstrip which served the Atlantic port before the present France Field runway was built in World War II. This became exclusively a warehouse area in contrast to the original Free Zone, with its mix of warehouses and showrooms, which is now known as the Commercial Area. It is now joined to France Field by a bridge.

The variety of merchandise and brand names available is awesome, hardly surprising when you consider that any day’s inventory can be in the range of $1.5 billion. Companies vary from mega-stores with hundreds of famous brands and luxury goods, down to small variety stores or single agency businesses. A number of large multinationals have also realized the advantages offered.

Not all of the business in the Free Zone involves the merchandise rolling in and out of the gates. If quantities are big enough and transportation suitable, a Free Zone company will find it more convenient to have goods shipped direct from source to customer, although. Most Colón Free Zone companies have their main offices and showrooms in the Commercial Sector separated from the city of Colón by a high security wall. A visitor’s pass can be easily obtained from the administration’s reception office just inside the gate. Take in consideration that since the Colón Free Zone is not designed for retail sales, and merchandise cannot be carried out with the purchaser, some companies will send goods to Tocumen International Airport in-bond to be collected by a visitor on departure.

But the commerce of the Free Zone is in grosses, case-lots and container loads. It is a city dedicated only to commerce, with sidewalks often thronging with people and streets jammed with trucks and trailers. But after 5 p.m. when the workers and the buyers and business people have gone to their homes and hotels, the security guards are the only inhabitants.

Reasons for the phenomenal success of the Cólon Free Zone are numerous. Not only is the use of the U.S. dollar as the currency of the country owing to the special relationship of Panama with the USA since the construction of the Panama Canal. Another reason is that the Zone has access to 5 huge ports all situated within a few miles radius.

The Free Zone is a classic example of interaction between Government and private enterprise. Panama’s laws have always been aimed at encouraging business, including the establishment of companies from abroad. The Free Zone laws establish that businesses may operate with the absolute minimum of controls (incredibly, merchandise entering and leaving the Free Zone requires the filling of only one form).

Some tax and other benefits are as follows:
0% taxes on income derived from export activities
0% tariffs and quotas on imports and exports
Highly competitive costs
Immigration benefits for executives and foreigners

INFRASTRUCTURE AND SERVICES

The Colon Free Zone is today more than just a traditional free zone; it is a Global Logistic Center for the world. Its annual commercial transactions generate US$11,000 million in imports and exports. The success of the Colon Free Zone is reflected in the more than 400 hectares and 1,800 established companies and 250,000 visitors a year.

The existence of the International Financial Center, the efficient maritime infrastructure, the free circulation of the US$ Dollar as legal tender, a great many fiscal incentives under an exceptional tax free system on sales or manufactures and on imports and re-exportations to foreign countries, tax exemption on income generated abroad, and a sophisticated communication network are some of the factors that contribute to facilitate the operations from the Colon Free Zone and which makes it an ideal center for International Commerce.

The businessmen and investors will find:

The largest collection and redistribution center of cargo in the Americas

Open to businessmen from Monday to Friday from 8:00 a.m. to 5:p.m

Modern display rooms, warehouses and commercial premises

Security inside and in the surrounding areas

Twenty five local and international banks provide services

Large labor force is available

High technology communications network

Air terminal in the France Field area to transport passengers or businessmen between the terminal cities of Panama and Colon

Specialized labor force and at a low cost

Multinational freight companies provide services in less than 24 hours

Proximity to the ports, railroad terminal, airport, cruise ship terminal and 5 star hotels

 

INVESTMENT RECOGNITION SYSTEM

Recovery of the amount of investment in infrastructure

Compensation in the rent payments

The lease back system consists in the recognition of the user’s investments on public works. Through this mechanism, the user gets back the amount of the investment in infrastructure through a compensation in the monthly rent payments to the administration of up to 70% of the monthly rent.

In this way, the construction and habilitation of a property inside the free zone is facilitated, giving the new user the opportunity to start operations quicker to the benefit of the new enterprise.

GETTING STARTED

Any person or company can set up operations in the Colón Free Zone by applying to the Administration and supplying commercial and bank references, a Panamanian Government tax clearance (paz y salvo) and the articles of incorporation in the case of a company. No commercial license is required and no minimum capital investment is stipulated. The only condition is that a minimum of five Panamanians be employed.

Setting up can be achieved in any one of four ways:

A premises can be rented from a private owner.
A 20-year lease can be obtained on a lot of land and a company can construct its own facilities subject to Administration approval of plans.
An existing company can be used as a representative. A number of companies are organized for this service and the advantages they offer provide a convincing argument for this type of operation. The representative company makes transport arrangements, receives goods, does the documentation, packs and re-packs if necessary, re-exports, bills and even collects. The instructing company retains title to the merchandise. Agreements of this sort need approval of the Administration and the condition will be that at least 60% of the goods be re-exported. The advantages of this system are obvious: no capital investment, no overheads, no headaches providing the relationship between owner and representative is a good one.
Merchandise can be handled by the public warehouse system. The businessman stores his merchandise in a public warehouse but in other respects functions like any other business established in the Free Zone. As in the case of employing a representative, the advantages are: no overheads such as salaries, rent, telephone.

MARKET FACTORS

The Colón Free Zone functions just like any other marketplace —its success is due in large measure to price and variety. Prices are bound to be competitive because of volume. The basic premise of the Free Zone is that goods arrive in large quantities from factory or supplier in the Orient, Europe, North or Latin America. Variety is constantly improved as the Free Zone grows and ever more companies introduce new lines.

Delivery time is the other vital factor which boosts the commercial movement statistics each year. Weeks and even months can be cut off delivery times for Latin American clients who order from the Colón Free Zone because firstly, the goods are already here on the continent and not subject to manufacturing quotas and freight schedules from half way round the world. Secondly, Free Zone companies, anxious to turn over their inventories as fast as possible, assisted by the almost total lack of red tape and supremely knowledgeable in the paperwork involved in all the countries of the marketplace, dispatch the goods in record time.

Thirdly, the transport network from Panama to all parts of the Latin America and the Caribbean is unbeatable. This rapidity of service allows customers to operate on inventory margins which otherwise would be impossible and therefore saves them interest charges.

BACKGROUND AND LEGAL BASIS

The tendency of the world economy in the 21st century is characterized by the disappearance of borders and an increase in the movement of goods. Hence, legal frameworks and observances that allow for the best development of these changes are required to guarantee the technology transfer, investment and national progress. Panama, as a member of the WTO and negotiating the materialization of the Free Trade Area of the Americas (FTAA), has addressed the topic of intellectual property as a priority in its policy agenda. The creation and enforcement of the decisions of the department of intellectual property in the Colon Free Zone Administration is a measure of the will of the government to make effective the protection of intellectual property rights, not only at the national level, but also in international markets, which our country plans to enter.

The privileged geographical position of Panama has allowed the Colon Free Zone to traditionally exercise a leading role as a logistic distribution center. Therefore, the work of the intellectual property department has been indispensable to assure that the infrastructure and the services offered by the free zone are not used for the illegal traffic of goods. This year marks the fourth year since the creation of the intellectual property department whose duties have been carried more efficiently, adjusting to the changes that the new projects and expansion of the free zone require.

The executive decree No.79 of August 1st, 1997, which regulate Articles 176 and 177 of law 35 of 1996, empowers the Colon Free Zone Administration to guard the intellectual property rights in the Colon Free Zone.

HOW THE FREE ZONE ADMINISTRATION FUNCTIONS

Responsibility for the efficient running and continued development of the Colón Free Zone is in the hands of the Free Zone Administration. The Zone is an autonomous institution of the Panamanian Government and functions under clearly defined laws and precedents. The Administration controls rents, public warehousing, promotion, development and construction. It keeps statistics and administers the flow of imports and exports.

THE USER’S ASSOCIATION

The User’s Association of the Colón Free Zone is an active and prestigious body with its own offices, conference and exhibition rooms, whose principal function is to look after the rights and interests of its members and increase the prosperity of the Free Zone. It publishes an annual directory and catalogue, “FOB Zona Libre de Colon”. Its website, www.colonfreezone.com, which includes company, product and trademark information, features individual home pages for most of the companies operating in the zone. The Users Association also organizes commercial missions abroad with the aim of introducing its products to foreign companies.

FUTURE OF THE COLON FREE ZONE

An ambitious project, which unites existing infrastructure and transport entities (maritime installations, airports, railway) into one permanent network to facilitate the movement of cargo from coast to coast across the Isthmus of Panama, will be developed in Colón within the next five years, which entails the expansion of the Colon Free Zone to a further 1200 hectares (approximately 3000 acres). The planning of the project involves coordination of the Civil Aviation Authority (DAC), the Maritime Authority of Panama (AMP), the Interoceanic Regional Authority (ARI), the Colón Free Zone Administration (CFZ) and the Customs Department. From the private sector, port operators of Manazanillo International Terminal, Colon Container Terminal, Panama Ports, Cocosolo Ports Terminal, the Panama Canal Railway Company and the Enrique A. Jiménez Airport to France Field are involved.

The project will integrate the railroad terminal, the three ports, France Field airport and a new road system. This will permit the development and establishment of new companies dedicated to commerce, light industry, service and high tech industries as well as multimodal transportation to complement each other in a secure and integrated area. This will operate within one customs regime, allowing the efficient and economic transfer of goods from one modal to another without paying any fees. As well as reducing the cost of freight and bureaucratic requirements the center will reduce the transport time for cargo making export operations more economic and efficient.

The purpose is to convert the Colón Free Zone into the “Multimodal Logistics Center of the Americas”, attracting new investors and buyers and helping to increase international commerce.

http://www.zonalibredecolon.com.pa/main_eng.htm

Special thanks to Focus Publications (Int.), S.A.

 

This is such an interesting program started in the old Fort Clayton military base, returned to Panama when the American soldiers left the Isthmus. An international complex for education, research, and innovation. Developed to promote cooperation between universities, scientific research centers, businesses, and international organizations. The City of Knowledge is governed by a private, non-profit organization, The City of Knowledge Foundation, which was created in 1995.
Here’s a brief description of what the City of Knowledge’s ideal is, I thought might be of your interest:

“The City of Knowledge offers the world unique opportunities of linking science, culture and business towards the common purpose of serving human development. With this, we create a space for encounters between Panama and the world, with no other limits than those of creative imaginations.

As we welcome you to the City of Knowledge, we sincerely hope you find here the opportunities for collaboration and the services and facilities necessary that will allow you to transform your innovative ideas into tangible realities. This is the City of Knowledge Foundation’s most profound mission. While grasping this feeling, we offer you the warmest welcome, and hereby invite you to participate with us in the task of making globalization a means to display the best of human spirit.”

 

Words by: Juan David Morgan who is the President of the City of Knowledge Foundation

 

 

For more information Visit:www.cdspanama.org/index.php?cccpage=index&set_language=en