Wednesday, February 21, 2007

Setting up an e-business in Panama

>> setting up an e-business in panama
by Alvaro Aguilar

In this day and age of connectivity, modern technology allows many individuals to run their business from wherever they are. When considering where to relocate, Panama provides excellent opportunities to continue managing a business and tend to customers worldwide from your new tropical location.

High bandwidth increases connectivity
The central location of Panama, right in the middle of the Americas, makes it the place where submarine fiber-optic communications circuits between North and South America converge. This allows users in Panama to enjoy extraordinarily ultra-high-speed bandwidth intensive applications such as multimedia and digital video, enabling fast and reliable connections for B2B, banking, ecommerce and other businesses as well as additional high-speed consumer activity units. Currently, Panama has the same bandwidth capability as New York City, with the difference that Panama uses 3% of its capability as opposed to 70% in New York.

Several local companies have set up data warehousing facilities in the Panama Canal area, where these circuits converge. These companies provide large and small online businesses with the use of their servers or can host their servers in special secure rooms
dedicated to providing rack-mount space.

The increased connectivity has encouraged 20 call center companies to employ around 5,000 workers, available for customer service. Currently, most centers serve businesses in the United States, especially Hispanic customers. The Government has increased the availability of English-speaking personnel for these centers with special education programs. An expatriate who only needs a single person for customer service can retain one of the many small virtual office services which provide a receptionist and a dedicated telephone line.

Special laws for online activities
Larger online businesses may have their office in Export Processing Zones, which allows them to claim benefits such as duty-free importation of equipment, low taxation and more flexible labor conditions. Offshore services, such as international marketing, financing, management, consulting and all services related to information technologies for data processing and technological research for clients abroad, may be set up at these Zones.

Additional benefits are provided to businesses set up in the City of Knowledge, a special technology park zone located next to the Miraflores Locks of the Panama Canal. Businesses have a 25-year income tax exemption and are exempt from limits on hiring of foreign staff.

The government grants online gaming licenses to operations whose owners provide full background information and pay a S$20,000 yearly license fee. In addition, they must maintain a bank account in Panama to ensure payment of prizes.

Tax and Financial Framework to Ensure Success
Once the hardware and logistic issues are dealt with, there are many advantages when setting up a business in Panama. A Panamanian corporation can be set up in a few days and its activities are not subject to Panamanian taxes as long as it sells to clients located outside of Panama. With proper legal advice, shareholders can arrange the structure of the corporation to defer or reduce the taxes they have to pay in their home country. In most countries, online transaction tax is based on the nationality of the corporation owning the domain of the business or on the location of its server, which further favors choosing a Panamanian corporation with Panamanian servers to conduct business.

A foreigner who qualifies for a retiree visa but wishes to maintain an active lifestyle can run a business online without the need of a work permit if he or she maintains a minimal business presence.

Alternatively, an expatriate owning a business with physical offices in Panama, 3 full-time employees and US$40,000 in investment can apply for a small investor visa. Other visa options are available when higher amounts are invested.

Panama has around 100 banks, out of which several actively seek out clients for e-commerce services. Prospective businesses must provide all due diligence information on the background
of their owners. Basic information on the structure of the online transactions must be provided to the bank to ensure that no unlawful activities will be conducted through the bank. Once the
bank official is acquainted with the purpose of the e-commerce activities, transactions are conducted in a secure manner under Panama’s confidentiality laws. Alternatively, micro payments can be routed through non-bank “digital cash” online services, some of which are incorporated in Panama but do business though banks elsewhere.

This combination of advantages makes Panama the ideal location for an e-commerce operation. º

lombardi aguilar & garcia
Tel. ( 507) 340-6444

Monday, February 19, 2007

Is Panama City The Next South Beach?

Is Panama City The Next South Beach?

By Ceci Connolly
Special to The Washington Post
Sunday, February 18, 2007; P01

It was sticky hot, and I was grungy after a morning exploring the cobblestone passageways of Panama City's Casco Viejo, a 300-year-old cross between the crumbling charm of Old Havana and the restored glow of New Orleans's French Quarter.

In my baseball cap, khaki shorts and sweaty T-shirt, I was dressed for a sidewalk hot dog stand. But a Panamanian friend had been raving about S'cena, the new Mediterranean restaurant in this colonial-era part of town, and when I stumbled upon its entranceway, it seemed the food gods were summoning me.

Still, I felt a little sheepish as I passed the first-floor jazz bar and stepped into a scene of sophisticated serenity: white tablecloths, fresh flowers and waiters in pressed shirts. I braced myself for dirty looks and a dreary table near a swinging kitchen door.

Instead, the owner greeted me like a lost cousin, whisking me to a prime table and gently draping a linen napkin across my lap.

And apparently I wasn't the only one getting VIP treatment. They were calling the guy in the next room "Mr. President."

"No, no," the waiter whispered, "it is the president -- of Panama."

Somehow, it all made sense. After just a few days in Panama, you start to recognize faces, and the prospect of sipping a midday chardonnay a few feet from the country's most powerful man doesn't seem so far-fetched.

I had seen ads touting Panama City as the next super-swanky Miami, and I was prepared for velvet-roped lines and South Beach-style snobbery. Heck, Jenna Bush was clubbing here just before I arrived. So not having to deal with a waiter with an attitude was a relief.

But I can see why it gets the Miami comparisons. The city tucked on Panama Bay offers a hip urban vibe and a distinctive skyline. It has sunshine, seafood and shopping opportunities galore. And although Panama is part of Central America, its rhythm and stylish Latin inhabitants have a Caribbean flavor.

There are notable disappointments. Panama's tourism industry sometimes struggles to meet the demands of travelers. (The man at the Avis counter had no idea how to get downtown, and cabdrivers were no better.) And though the country has many exquisite beaches, none is within walking distance of the hotel strip as in Miami's South Beach.

But ultimately, the beauty of Panama City is that it hasn't become Miami yet. It's much more welcoming and manageable. And now is the time to go -- before the Panama Canal gets its third set of locks, before Donald Trump finishes his 65-story tower and before the prices shoot just as high.

Glitches, Then Fixes

The woman behind the Louis XV desk at the Hotel DeVille looks puzzled.

Ten, the bistro inside the Hotel DeVille, a new boutique hotel with soaring ceilings, comfortable beds and plenty of room to stretch out.
Ten, the bistro inside the Hotel DeVille, a new boutique hotel with soaring ceilings, comfortable beds and plenty of room to stretch out.
Hotel DeVille

"No, I'm sorry," she tells my fiance, Manuel, and me. "I do not have a reservation for you."

After arriving late at night in a foreign city where we do not know a soul, this is not the greeting we want to hear, especially because the lobby of this boutique hotel hints at a pleasant stay -- Persian rugs, plush sofas, soft lighting and newspapers on every table.

"It's not a problem," the woman chirps before I can pull out our confirmation slip. "I can take care of you."

It is a scene that will be repeated over and over in Panama -- a glitch followed by an enthusiastic fix. Our room, with 20-foot-high ceilings and exposed wood beams, has all the modern amenities of a five-star hotel, except it's larger and much more affordable. There's a desk with Internet access, piles of feather pillows and soft robes for us both.

We head back downstairs to the hotel's groovy new Ten Bistro, where the gimmick is $10 entrees. (Yes, Panama's currency is the U.S. dollar, so dinner is a bargain.) After two flights, bad directions and a missing reservation, a decent meal and big goblet of wine are just what we need.

But there's a problem: The restaurant is closing at the very un-Miami hour of 10 p.m.

This being Panama, the problem evaporates as fast as it appeared. The manager stays open just for us, guiding us to a table aglow with orange candles. The soothing palette continues overhead, with glorious bird of paradise blooms sprouting out of suspended glass vases. And to top it off: a chilled bottle of a crisp, absurdly inexpensive Chilean sauvignon blanc.

The Canal, of Course

Even today, 93 years after completion, the Panama Canal is an awesome engineering feat, guiding ships the 50 miles from the Caribbean Sea to the Pacific Ocean.

We arrive at the Miraflores Locks and head to the outdoor viewing deck. The sight of 965-foot-long behemoths squeezing through the canal is unbelievable, the precision timing of the locks a marvel. Over a loudspeaker, a bilingual guide rattles off canal stats and fun facts. "The lowest fee ever assessed for passage was 36 cents," he says. "It was for Richard Halliburton to swim the canal." An impressive museum inside is complete with a simulator that gives a realistic sense of what captains experience as they navigate the narrow locks.

The next day, while Manuel works, I ask my cabdriver to drop me at the Plaza de la Independencia in the center of Casco Viejo. The modest square looks much as it did 100 years ago: narrow one-way streets, stone edifices and a few rusty cannons.

On the corner is a lovingly restored four-story colonial built by the French in the 1870s and now home to another canal museum. At one-fifth the price and almost empty, it is a much better deal than the locks museum.

The story of the canal -- from the failed effort by the French in the 1880s to current widening plans -- is presented in bright, colorful interactive exhibits. There's a full recounting of the 22,000 workers who died, most by malaria or yellow fever, and a sobering account of the segregated system that left dark-skinned workers with less money in their pockets at the end of each workday.

Outside the museum, the neighborhood offers the best of Panama City -- past, present and future. In 1671, after pirate Henry Morgan burned the original city to the ground, the King of Spain chose this boot-shaped peninsula to rebuild.

Although Casco Viejo fell into disrepair in the 1950s, today it is enjoying a revival. The two worlds meet on its labyrinthine streets: Elderly women hang laundry on wrought-iron balconies as construction workers transform dilapidated convents into swanky loft-style condos.

By sheer luck, I happen upon the presidential palace just as four magnificent herons strut across the porch. A few blocks away, at the seawall, I take in a gorgeous view of a half-dozen ships queuing up under the Bridge of the Americas.

I'm intent on finding the Church of San Jose with its Golden Altar, and as I study my map, a 30-something man named Ricardo offers his services. In most big cities, this would be the signal to sprint in the opposite direction. But with squadrons of tourist police patrolling on bicycles, I accept the invitation.

Ricardo, a native Panamanian, makes the sign of the cross as we step inside the plain white church. The interior is an odd -- even unsettling -- jumble of periods. But the baroque altar, salvaged by a priest who hid it from the plundering Morgan, is a mouth-gaping gem, an enormous mahogany piece covered in gold leaf.

Later, another local, Julio, guides me to the dungeons used first by the Spaniards and later the Colombians. One has been converted into a touristy restaurant. But Julio leads me to another. I climb through a low-slung doorway, and in the dank, poorly lighted room is a genuine surprise: paintings of every shape, color and style. Portraits of the Virgin Mary lean up against seascapes; stacked in another corner, geometric abstractions are mixed with battlefield images. Many look to be schlock, but a few are captivating.

The paintings, Julio says, are all from the collection of jailed dictator Manuel Noriega. There's no proof of this, but the dungeons are super cool and Julio and his tale -- true or not -- sure beat the standard tour guide spiel.

Tropics to Mountains

We are driving through Cocle Province, 75 miles southwest of Panama City. As we negotiate yet another tight curve, the landscape shifts from the tropical palms of the capital to the sturdy pines of this mountainous region -- all in less than an hour.

As we reach the top of one particularly steep hill, I holler, "Stop the car!" On our right, in the distance, is the Atlantic Ocean's Caribbean Sea, and to the left, down a terrifyingly steep rocky cliff, is the Pacific. We are poised on a ridge separating two continents.

There are many reasons to escape the city and explore Panama's natural wonders. But it is hard to imagine a better one than this view, arguably one of the most distinctive vantage points in all of Central America.

Farther up the slope, we reach El Valle, a town that sits inside a crater created 3 million years ago when a huge volcano blew its top. Today El Valle is one of the largest inhabited dormant volcanoes in the world. The town's fresh air, leisurely pace and cooler temperatures make it a popular weekend retreat for Panama City's elite. (Signs along the road tell the story: "Door to Paradise" and "Villa Nirvana.") Nature lovers rave about the region's hiking trails, waterfalls and horseback riding.

But the main "activities" we encounter are relaxing and eating. New Panamanian friends have arranged lunch on the patio of La Casa de Lourdes, a Tuscan-style mansion with an idyllic poolside restaurant and terraced gardens. Surrounded by Panama's leisure class, we follow their lead and order a bottle of wine. It goes well with a table full of fresh Panamanian and Creole seafood dishes accented by spice rubs, mango salsas and yucca, the ubiquitous root that locals mash, fry and even toss into cakes.

We take a room in the adjacent building, which is not nearly as architecturally inviting as the main house. But our suite is enormous, with a luxurious modern bathroom and tiny terrace looking out on a ring of mountains. At dinnertime, we stroll through the gardens to the restaurant, now aglow in candlelight.

The next morning, heading back to the city, we stop at a roadside stand and order two chichemes, a heavenly blend of milk, sweet corn, cinnamon and vanilla. If we sip them slowly, they should last us all the way to Panama City.

Fish Market Finds

With just a few hours left in Panama, we decide to go to the source of the country's culinary goodness: the Mercado del Marisco, or fish market.

We slosh around the smelly warehouse, marveling at the piles of beautiful, slimy sea creatures. The vendors, friendly if slightly surprised to see a pair of gringos, teach us words in Spanish. The mero we devoured one night is grouper, longo is a giant tubular clam, and corvina a buttery, rich sea bass.

We meet a vendor named Niño and tell him we're craving lobster. But he shakes his head. "Not fresh," he confides.

Standing 5 feet tall in his rubber galoshes, Niño tells us he has worked the same stall for 33 years. He wants to make a sale, but he also wants satisfied customers. He recommends prawns and calamari. A pound plus of super-fresh seafood for $5.25? Who can argue?

With our catch in hand, we climb a rickety wooden staircase to a restaurant of sorts. Our waitress is brusque and the napkins are paper. There's a menu, but we don't need it.

We ask the kitchen to grill up Niño's goodies. The chef adds a pile of perfect French fries, and our bill comes to $6.

Ceci Connolly, a Washington Post reporter currently on leave, is based in Mexico City.

Panama City's Casco Viejo neighborhood has been revitalized after falling into disrepair in the 1950s.
Panama City's Casco Viejo neighborhood has been revitalized after falling into disrepair in the 1950s. (By Keating Holland)

This Week in Travel

Credit: David Tipling

Panama: Bird watchers flock to Canopy Tower. Also, is Panama City the next South Beach?
Photo Gallery: Panama's for the Birds

A Booming Panama City Awaits Noriega's Return

The Wall Street Journal

February 17, 2007

A Booming Panama City Awaits Noriega's Return

How American retirees -- and a canal makeover -- are transforming the capital
February 17, 2007; Page P1

PANAMA CITY, Panama -- When Gen. Manuel Antonio Noriega gets back to this lush tropical city after a 17-year absence, the former Panamanian strongman will scarcely recognize his old haunts. I barely did.

[Panama City]
Makeover: Balboa Avenue, Panama City

The news that Mr. Noriega plans to come back to Panama in September after spending nearly two decades in a U.S. prison since being deposed in a 1989 invasion, is the talk of the town. His return has momentarily eclipsed the other omnipresent subject of conversation here -- the real-estate boom fueled in part by American retirees, which has turned this once laid-back city, known as a refuge for spies, arms dealers and out-of-work dictators, into an enormous building site with a Manhattan-like skyline in the making.

Good times are expected to keep rolling: The country's famous canal is about to get a multibillion-dollar makeover, and a chunk of its down-and-out colonial city center is getting a facelift.

Landing here recently for the first time in many years, I recalled Mr. Noriega's last day in Panama, which I covered for The Wall Street Journal. That day, I spent hours waiting for Mr. Noriega to come out of the Vatican embassy, where he had taken refuge from U.S. troops. Days earlier, soldiers had blared ear-splitting rock from sunup to sunset to drive Mr. Noriega out of his refuge, but to no avail. I still remember some of the rather pointed musical jabs -- Jimi Hendrix's electrifying version of "The Star Spangled Banner" and Elvis Presley's "Jailhouse Rock."

[Go to Trip Planner]
See where to stay and what to do in Panama's capital city.

Inside, the late Msgr. Jose Sebastian Laboa, who once held the job of devil's advocate in the Vatican -- arguing the canonical case against candidates for sainthood -- used his lawyerly skills to convince Mr. Noriega to surrender. Mr. Noriega, with his acne-scarred face, made a perfect villain, the type of tyrant the U.S. at first loves to use, and then loves to hate. After three days of loud music and 11 days of artful persuasion, Mr. Noriega walked out into the waiting arms of U.S. anti-drug agents and on to an eventual U.S. trial and conviction on drug-trafficking charges (if he does return to Panama, authorities have said they will put him on trial for murder).

In his Miami prison suite, Mr. Noriega became a born-again Christian. In his absence, Panama City has also experienced a rebirth of sorts. The place teems with hip new restaurants and salsa joints. New beach and eco-friendly jungle hotels are nearby and ground has been broken on a long-planned biodiversity museum by renowned architect Frank Gehry.

[Panama Canal]
The Panama Canal

The rebirth is partly the result of another U.S. invasion -- this time by the advance guard of baby-boomer retirees who have landed on Panama City's shores. Not only are the Americans here. So are the Canadians and Europeans. Venezuelans, one step ahead of the installation of fiery President Hugo Chávez's version of "21st-century socialism," are arriving in growing numbers.

Another factor in the remaking of the city was last year's vote via national referendum to go forward with a $5.2 billion government-funded project to widen the Panama Canal a few miles from the city center. A third set of locks, which will allow larger vessels to go through the waterway, is expected to be completed by 2015. Panamanians are betting the canal's expansion will boost other related businesses such as insurance and financial services, and help maintain growth rates of about 7%.

The canal has been central to Panama's history -- and its sometimes turbulent relations with the U.S. In 1903, President Theodore Roosevelt more or less carved out an independent Panama from Colombia in return for control of a 10-mile swath of Panamanian territory cutting through the middle of the country where the canal was built. U.S. control of the "Zone" fed Panamanian nationalism, leading to bloody riots in 1964. After thorny negotiations, the U.S. finally turned over total control of the canal to Panama in 2000.

Change is even making a dent in Panama City's slummy colonial city center, once the domain of prostitutes, pimps and pickpockets. Years ago, even looking at the fetid, jam-packed, crumbling buildings of the old city made one feel in danger of contracting the yellow fever that mowed down thousands of canal workers in the 1880s. There's still work to be done, but private and public money is being used to clean up some streets and a couple of squares are now home to trendy eateries.

[Bristol Hotel]
The Bristol Hotel

Many Panamanians appear happy with the way their city and country are going. Carlos Weil, a former Swiss currency trader turned Panamanian art dealer who has six passports, says the country is attracting people from all over the world. Half his clients are now foreign, boosting his prices and expanding his market. Foreigners have brought with them lots of new restaurants -- and even the city's first serious bookstores.

From colonial times, when the city was a key transit point for the transport of gold and silver from the mines of Peru to imperial Spain, commerce has always been Panama's driving force. The loot then woke the greed of famed pirate Sir Henry Morgan, who sacked the city in 1671. The ghostly ruins of that first Panama City can still be seen a couple of miles from downtown.

One of the world's largest offshore banking centers, Panama still attracts its share of pirates and flim-flam men. My all-time favorite for sheer verve and virtuosity was Lloyd S. Rubin, a Jackie Gleason look-alike widely admired here as the king of the upfront-fee scam. For years, Mr. Rubin lured hundreds of would-be entrepreneurs to Panama where he relieved them of millions of dollars by charging exorbitant fees in exchange for promises to provide investment funds that never materialized.

[Bay of Panama]
The Bay of Panama

In 1991, I wrote about Mr. Rubin in The Wall Street Journal. The following year, a notice appeared in local newspapers announcing Mr. Rubin's untimely death in Thailand. Three years later, Mr. Rubin rose from the dead. He surfaced in Ecuador, with an alias, Carlos Campbell De Cordoba, a name I felt almost turned him into a long-lost cousin. He was returned to the U.S. where he pled guilty in Georgia to fraud charges to do with his Panama scheme, and spent some time in prison. (Mr. Rubin now runs an art gallery here.)

Panama has historically been a refuge for deposed autocrats and disgraced politicians. After Iran's Shah of Shahs lost his Peacock Throne, he lived for a few months on nearby Contadora island. Haiti's strongman, Gen. Raoul Cedras, a diving enthusiast, found refuge here after the U.S. knocked him out of the box in 1994. And in 1997, Ecuador's President Abdala "El Loco" Bucaram ended up here after the congress dismissed him from office for living up to his nickname. Mr. Bucaram, who insisted I was an agent for the Central Intelligence Agency in my one interview with him, is said to be a habitué of the city's casinos, but I've never spotted him among the one-armed bandits.

[Statue of Balboa]
A statue of Balboa

I'm happy to say that my favorite bar, El Pavo Real, or the Peacock -- billed as Panama's only British pub -- is still around. The Pavo Real was Panama's version of Rick's Café from "Casablanca," a place where gun runners, drug pilots and one of my best sources -- a Cambridge-educated insect exterminator who was also an acute social critic -- got together for drinks. The late prima ballerina Dame Margot Fonteyn, who was married to a Panamanian politician, would drop in for lunch. So did more recently John le Carré -- in town to write "The Tailor of Panama," his remake of Graham Greene's "Our Man in Havana."

[Casco Antiguo]
Casco Antiguo

Old Panama City had a cozy, almost familial air to it. Anybody who was anybody was related by blood or marriage. That was brought home forcefully to me on my first visit to the country. I was covering the 1987 riots that eventually led to Mr. Noriega's downfall, when unbeknownst to me, my future father-in-law, the deputy administrator of the Panama Canal and a man proud of his Sicilian bloodline, asked Panamanian and U.S. military police to give me some rough treatment.

For reasons too complicated to go into here, he thought -- mistakenly -- that I hadn't done the honorable thing by his daughter, a diplomat in Miami whom I had recently met. To set things right, he wanted the police forces to find me in the chaos of tear gas and flying rocks and give me a light work-over to teach me a lesson in proper etiquette. Luckily, the forces were busy with more important things. I married his daughter shortly afterwards, and now get along famously with her father.

That small-town feeling -- where such favors are asked and granted -- is fading fast.

Write to José de Córdoba at jose.decordoba@wsj.com1


Trip Planner: Panama City

How to Get There: Regular direct flights leave from Miami.

Where to Stay: The Bristol Hotel, a boutique hotel close to the city's financial center, is a favorite; rooms start at about $300 (www.the bristol.com2). Close by is the Hotel de Ville, another boutique hotel where rooms start at $175 (

Where to Eat: Panama has great seafood restaurants. Try Siete Mares, where the specialty of the house is Msgr. Laboa's Lobster, topped with red caviar and named after the late papal nuncio who talked Gen. Noriega into abandoning the Vatican embassy and surrendering to U.S. troops (Tel: 507-264-0144). Madame Chang's is considered one of the best Chinese restaurants in town (Tel: 507-269-1313).

What to Do: A visit to the Panama Canal is a must -- take a taxi to the Miraflores locks. Stroll by the ruins of the first Panama City, sacked by the pirate Sir Henry Morgan in 1671, a couple of miles from downtown. Visit the present Old City, known as the Casco Viejo, which is being rehabilitated. There, stop by the cathedral and the Plaza de Francia, with its touching monument to the French engineers who died in the first failed attempt at building a canal. The Amador causeway has lots of bars and restaurants and is great for jogging and bicycling.

José de Córdoba
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