Panama has been long known for its investor friendly tax policies with many tax exemptions given to lure foreign business men, retirees etc. to invest in the country. It has a strong financial network with over 80 national and international banks operating there. It has strict banking secrecy laws which keep the investment details of individuals out of purview of public scrutiny. Despite severe international pressure, Panama has stuck to its policy of providing 'level playing field' to investors i.e. the sharing of banking information will be strictly on reciprocal basis with other countries.



Panama provides complete capital gains tax exemption to foreigners, the income earned abroad is tax free and even the interest income is tax free. It has a strong legal system which keeps frivolous law suits against foreigners acquiring physical assets in Panama out of courts purview. Panama has a stable democratic government and a growing economy. It is a republic as per its constitution and provides complete religious freedom and freedom of speech to its citizens. Its asset protection laws date back to over a century and Panama provides statutory financial privacy and banking secrecy to investors. It provides attractive incentive schemes to retirees deciding to settle down in the country.

Panama has strong independent government from the days of its former ruler Omar Torrijos who was responsible for securing the management control of the Panama Canal from the U.S. in 1979. He was a dictator who did a lot to improve the economic as well as social status of Panamanians. He brought about land reforms, opened up universities to blacks and defended the rights of the indigenous Indian and Creole populations who have for long been kept out of the mainstream economy by the white elite oligarchy. Most of Panama's white people live in the area near the Panama Canal and many of them are extremely wealthy. A small group of Panamanians, most of them wealthy whites, are called the elite. Their families have had wealth for several generations. The elite take great pride in their traditions, and they tend to avoid social contact with other Panamanians. This group includes many large landowners, and doctors, lawyers, and political and military leaders. The elite control Panama's economic and political systems. Omar Torrijos fought against the dominance of the white elite in the society.

The canal is central to Panamanian economy, providing income to the tune of a billion dollars per year to the government. The economy is growing at over 6% fueled by a boom in construction activities. The real estate prices, though rising, are still affordable compared to that in the U.S. The prices in the capital, Panama City, are almost half of that in Florida. Panama has unique relationship with the U.S., its biggest trading partner, right from the days of building the canal in 1914. The present government also has taken a pro business stance and wants to continue its investor friendly tax laws. Panama would continue to be an attractive destination for foreign investments in the years to come.