Tuesday, August 27, 2013

Permanent Resident Visa for 47 countries of US, EU and OECD

Citizens of 47 countries qualify for the Permanent Residence Visa for university graduates holding $5,000 in a Panama bank account and their dependents.  Applicants must start a new business, purchase an existing business or be hired to work for a Panama company.  The countries until now are:
Andorra, Argentina, Australia, Austria, Belgium, Brazil, Canada, Chile, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hong Kong, Hungary, Ireland, Israel, Japan, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Monaco, San Marino, Montenegro, Netherlands, New Zealand, Norway, Poland, Portugal, Serbia, Singapore, Slovakia, Spain, South Africa, South Korea, Sweden, Switzerland, Taiwan, United States of America, Uruguay, United Kingdom (Great Britain & Northern Ireland).
A separate work permit is granted by the Labor Ministry which is valid for the duration of the visa.

Thursday, August 08, 2013

Panama: Rise in regional trade brings new opportunities

Panama: Rise in regional trade brings new opportunities

With work to expand the Panama Canal’s capacity taking shape, the economy, especially its growing retail sector, is already benefiting from an increase in the flow of goods. The purchasing power of Panama’s 3.57m consumers continues to increase, mirroring the recent dramatic rise in GDP. However, international retailers’ primary interest is the potential that Panama offers as a logistics and distribution centre for the wider Latin American market.

The construction of the canal gave Panama, which had long served as a bridge between North and South America, the opportunity to carve a niche as a regional trade hub across the globe. The country is also exploring ways of using its strategic position to build growth in new segments, such as the value-added logistics services industry.

Panama’s Colon Free Zone has proved to be a key attraction for retail manufacturers and distributors looking to make the country a regional hub for their operations. The area, which is second in size only to Hong Kong’s international free zone, already acts as an important trans-shipment point for consumer products.

The dollarised economy, stable political environment, and tax and fiscal incentives have all helped Panama attract new international players to its shores. Retail companies make up many of the 100-plus foreign firms that have established regional headquarters in Panama. Consumer electronics, textiles and machinery feature strongly, with the list including global names such as Adidas, Hewlett-Packard, Caterpillar and L’Oréal.

US-based retailers, in particular, have shown a keen interest in establishing or expanding operations in Panama. A recent poll taken by the Retailer Industry Leaders Association (RILA) in America found that 58% of US-based retailers were considering either expanding or establishing operations in Latin America over the next five years. The data also showed that 59% of its retailers had supply chains that included distribution to and from Latin America.

While many international retailers are attracted to Panama because of its strategic location, the US Commercial Service has also pointed to the opportunities that the domestic market offers, despite its diminutive size. In its Doing Business in Panama 2012 report, the service highlighted the consumer attitudes and brand preferences that the two countries shared, together with the positive reputation US manufacturers enjoyed across the region.

Nelson Cabrera, director of Miami-based logistics firm Lilly Associates, recently told the local press that while Panama’s role in shipping goods from the US was pivotal, the country offered several additional attractions for US retailers, such as cheaper freight rates, an open and efficient Customs department and significantly lower wages.

Experts also suggest Panama is well positioned to expand its yet-to-be-developed manufacturing industry to include value-added assembly, packaging and labelling of retail products. A value-added logistics services industry could add between $600m and $1bn, according to estimates from Panama’s Agency for Investment and Export Promotion (Proinvex).

Last August, the first such value-added project within the fashion industry was launched after Panamanian firm Exclusive Brands Logistics Corporation (EBL Corp) signed a partnership with Damco Panama, the logistics arm of the AP Moller-Maersk Group. The collaboration will see a fashion hub created to handle 35,000 cubic metres of goods per year that will also carry out value-added services such as packaging and labelling.

Under the partnership, Damco will focus on transportation and international supply chain management, while EBL Corp will handle value-added logistics. EBL’s managing director, Alfredo Maduro, told the local press that logistical and value-added manufacturing set-ups had the added benefit of enabling managers and clients to concentrate on purchasing and sales.

Panama’s bid to expand its role as a regional hub is opportune in that it coincides with an increase in trade to and from Latin America. International firms headquartered in North America, Europe and Asia will also be aware that a move to establish a logistics and final-assembly base in Panama means shifting the decision-making process closer to their operations, facilitating quicker reactions to changes in the marketplace.

For full text see http://www.oxfordbus inessgroup.com/
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Friday, August 02, 2013

Panama: Developing a financial centre

Panama: Developing a financial centre
Latin America | 26 Jun 2013

Lending in Panama continues to grow at a healthy pace, while important regulatory changes are being carried out to ensure the stability of banks. At the same time, authorities are boosting transparency of the system, increasing their cooperation with the international community and strengthening Panama’s position as a regional financial centre.

Domestic credit within the national banking system grew by 14.2% in 2012, reaching more than $33bn, according to data from the Superintendent of Banks (Superintendencia de Bancos Panamá). The increase was largely on the back of private sector loans, which accounted for 94.2% of credit as of the end of last year. Overall asset levels were up by 10%, hitting $72.94bn.

Panama’s international financial centre – established in 1970 and home to nearly 100 offshore banks – also saw growth in 2012, with assets rising by 10% to reach $89.78bn. While the country still has relatively strong banking secrecy laws, it has started to disclose more financial information through bi-lateral agreements such as the US-Panamanian Tax Information Exchange Agreement (TIEA), which went into effect in April 2011, and the more recent TIEA with Canada signed in March 2013. Panama was removed from the OECD “grey list” in 2011 after signing its 12th TIEA in just under two years.

More generally, the country is taking steps to strengthen the regulatory and oversight frameworks for its financial system, in line with recommendations from the IMF. These include the establishment of a liquidity facility to act as a lender of last resort, as there is no central bank, as well as the ongoing development of capital adequacy and regulatory reporting standards for holding companies in the financial sector and the finalisation and implementation of regulations on operational and interest rate risks.

In its latest Article IV staff report, published in March 2013, the IMF also pointed out that, with high levels of trade and foreign financing, Panama remains vulnerable to external shocks. In particular, sudden fluctuations in capital flows to Latin America or a slowdown in Colombia and/or Venezuela, major trading partners and important sources of foreign deposits, could have an adverse effect on private sector credit growth, although the recent establishment of a sovereign wealth fund will reduce these risks.

Despite these concerns, Panama remains a top regional financial centre, with total assets equivalent to about 215% of GDP. Domestic lending to the private sector amounts to about 90% of GDP, and loans have exceeded deposits since mid-2010. Indicative of its importance, Panama was recently included for the first time in the March 2013 edition of the Global Financial Centres Index, which is published every six months by London-based think tank Z/Yen.

The country’s overall rank of 67 out of 75 of the world’s leading financial centres is indicative of its small size, yet it is not far behind its regional competitors Mexico City (55), Buenos Aires (53), Rio de Janeiro (48) and Sao Paolo (44). With a population of 3.57m, Panama is tiny in comparison to these giants, but its rapidly expanding dollarised economy, political stability and strong network of banks have allowed it to punch well above its weight in the regional and global contexts.

Since Panama first established itself as a centre for finance in 1970, the banking sector has undergone a number of important changes, particularly in the past few years. Improving asset quality, increased cooperation with the international community, and strong growth in domestic deposits amidst prominent economic expansion have all contributed to the development of the banking and larger financial systems. However, the strengthening of one of Latin America’s five-largest financial centres remains a work in progress.

For full text see http://www.oxfordbus inessgroup.com/
More information is available in http://www.oxfordbusinessgroup.com/product/report/report-panama-2013