Nikki Beach owners want Panama resort to stop using its name

After 6 years of aggressive marketing, the partners of the Nikki Beach panama development have parted ways. According to court papers filed by Penrod International, a Panama company Casa de Campo Farallon misused its Nikki Beach trademark to open a resort in December 2010 and finally to misrepresent the nature of their termination in a publication of February 10, 2011.

Eventually, the hotel changed its name to Royalton Playa Blanca, after a management agreement was signed with Blue Diamond, a hotel operations company owned by Sunwing Group of Canada. Panama company RG Hotels announced this change in a March 14 press release which still contained the NB word.

While U.S. courts may be appropriate venue for a legal action under U.S. law, a winning plaintiff could find problems when enforcing a judgment against assets abroad of the foreign defendant unless proper notice of the initial action from the beginning.

The 2007 article gives an idea of the high expections under which the original project was sold to individuals. Thse buyers may be the ones left to lose more as they purchased relying on an internationally known brand of the "sexiest hotel in the world".

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Nikki Beach Severs Ties with Playa Blanca Resort

Playa Blanca, Panama (January 2011)

Nikki Beach has severed ties with a condominium hotel project under development in Playa Blanca on Panama’s Pacific Coast.

In 2007, Nikki Beach signed an agreement to operate Nikki Beach Hotel and Resort Playa Blanca, the first condo hotel in this coastal location. The opening was originally scheduled for 2008, but the project was delayed more than two years. The agreement has been terminated and all ties severed. Approximately 80 of the 140 condo hotel units are now finished, and the owner is continuing to market the property as a Nikki Beach Hotel & Resort.

Nikki Beach has no affiliation with the project and does not condone use of the Nikki Beach Trademark which is unauthorized and the subject of litigation.

For further information, please direct all inquiries to Nikki Beach Corporate, 786.515.1130.

Text from Company page http://www.nikkibeachhotels.com/ipage/notice.php cached in Google

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Nikki Beach sues owner of Panama hotel

By Jerry Limone

Full text in http://www.travelweekly.com/Travel-News/Hotel-News/Nikki-Beach-sues-owner-of-Panama-hotel/#

Nikki Beach drops hotel project in Playa Blanca Panama, Due to non-compliance with brand Standards

February 11, 2011 05:44 PM Eastern Daylight Time

MIAMI BEACH, Fla.--(BUSINESS WIRE)-- Nikki Beach recently severed its ties with a condominium hotel project under development in Playa Blanca on Panama’s Pacific Coast, and has taken legal action against the local developer, Panama’s RG Inmobiliaria, according to Peter Higney, director of operations, Nikki Beach Hotels & Resorts, Miami Beach.

“As a global five-star brand, we set certain standards for the design, construction and operation of our properties”

“As a global five-star brand, we set certain standards for the design, construction and operation of our properties,” Higney said. "We have a responsibility to maintain our brand standards and under no circumstances would we allow the developer to use our brand and misrepresent us to our loyal Nikki Beach customers."

On Thursday Nikki Beach filed an injunction in U.S. District Court in Miami against the Panama developer to prevent the unauthorized use of its name, brand and any other intellectual property belonging to the company.

A growing global hotel and resort operator, Nikki Beach has a strong Hotel Division with offices in Europe and the Middle East. The company has 10 projects in the pipeline in locations such as Croatia, Greece, Cyprus, Qatar, Cape Verde, Thailand, Spain and new projects in the making, added Higney.

Referring to the situation in Panama, Higney said that as of August 2010, the local developer had breached an operating agreement by failing to conform to the brand’s standards, architectural guidelines and operating requirements, as well as by misrepresentation of the brand. Additionally, the developer missed the opening date in 2008.

Consequently, Nikki Beach declared the developer in default, but gave the developer another chance to correct the numerous problems found by an on-site inspection in September 2010. When the developer did not respond, Nikki Beach sent a notice of termination on November 22, 2010.

Without Nikki Beach serving as the “exclusive operator” of the resort as called for in the contract, the developer had no right to open the resort in December, 2010 using the Nikki Beach brands, added Higney, since Nikki Beach had no way to insure quality control over such unauthorized use of its five-star brand. “As a global lifestyle brand firmly growing in the luxury boutique hotel niche, protecting our brand’s standards and intellectual property are paramount issues,” Higney said.

Full text in http://www.businesswire.com/news/home/20110211006243/en/Nikki-Beach-Drops-Hotel-Project-Playa-Blanca

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Nikki Beach owners want Panama resort to stop using its name

The Daily Business Review

...Panama resort to prohibit use of its name. Miami Beach-based Penrod International, which operates Nikki Beach, claims in a lawsuit filed Thursday in...

02/14/2011 John Pacenti Subscription Required

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Penrod International LLC dba Nikki Beach v. Casa de Campo Farallon, S.A. dba Nikki Beach Playa Blanca Resort et al

Date # Docket Text 2/11/2011 6 MOTION for Preliminary Injunction and Supporting Memorandum of Law by Penrod International LLC. (Attachments: # 1 Exhibit A, # 2 Text of Proposed Order)(Peretz, Steven) (Entered: 02/11/2011) 2/11/2011 5 Clerks Notice to Filer re: Electronic Case - Documents Improperly Arranged. The Filer did not properly attach the Civil Cover Sheet & Summons. Future filings must comply with the CM/ECF Civil Case Opening Guide. It is not necessary to re-file this document. (vjk) (Entered: 02/11/2011) 2/11/2011 4 FORM AO 120 SENT TO DIRECTOR OF U.S. PATENT AND TRADEMARK (vjk) (Entered: 02/11/2011) 2/11/2011 3 Summons Issued as to Casa de Campo Farallon, S.A., Rugiere Galvez. (vjk) (Entered: 02/11/2011) 2/10/2011 2 Judge Assignment RE: Electronic Complaint to Judge Jose E. Martinez (vjk) (Entered: 02/11/2011) 2/10/2011 1 COMPLAINT for Compensatory Damages, Treble Damages, Statutory Damages, Injunctive and Declaratory Relief and Attorney Fees against Casa de Campo Farallon, S.A., Rugiere Galvez. Filing fee $ 350.00 receipt number 113C-3511301, filed by Penrod International LLC. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4, # 5 Exhibit 5, # 6 Exhibit 6, # 7 Exhibit 7, # 8 Exhibit 8, # 9 Exhibit 9, # 10 Exhibit 10, # 11 Exhibit 11, # 12 Civil Cover Sheet, # 13 Summon(s) Casa De Campo, # 14 Summon(s) Rugiere Galvez)(Peretz, Steven) (Entered: 02/10/2011)

Court documents available in:

http://www.rfcexpress.com/lawsuits/trademark-lawsuits/florida-southern-district-court/70986/penrod-international-llc-dba-nikki-beach-v-casa-de-campo-farallon-s-a-dba-nikki-beach-playa-blanca-resort/summary/

http://www.scribd.com/doc/48621718/Penrod-International-v-Casa-de-Campo-Farallon-et-al

CASA DE CAMPO FARALLON, S.A.

PRESIDENTE RUGIERE GALVEZ

TESORERO MARUQUEL GALVEZ

SECRETARIO AURISTELA DE NARANJO

VICE-PRESIDENTE MARIO GOMEZ ESTRADA

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Industry Insiders: Jack Penrod, Nikki Beach Principal

By Marcy MacDonald December 21, 2009

A family tragedy led entrepreneur Jack Penrod to choose a garden spot at his beach resort and name it after his daughter, Nikki. After some outside influences expressed interest in the location, Penrod decided to allow the garden to be used for parties and events, and it eventually became the well-known Nikki Beach Miami. The empire now includes locations in Cabo San Lucas, Marrakech, Marbella, Koh Samui , New York, Panama, St. Barts and Toronto, to name a few. The avid pilot and diver manages the jet set-friendly brand with his wife, Lucia and talks about the humble beginnings of a nightlife staple after the jump.

Full text in http://www.blackbookmag.com/article/industry-insiders-jack-penrod-nikki-beach1/14445

Comments by buyers in http://www.blackbookmag.com/comments/industry-insiders-jack-penrod-nikki-beach1/14445#comment-1

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Nikki Beach Panama holds "Launching with Stars" http://mensual.prensa.com/mensual/contenido/2008/01/26/hoy/sociales.shtml Photo: Lucia Penrod and Rugiere Galvez, from prensa. com

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Nikki Beach is Coming to Panama

By Mona Sutherland Published: 2007-01-22 Mona Sutherland

Mona Sutherland is the Search Marketing Specialist for WSI Panama.

A key player in the impressive growth of Panama real estate is the recently arrived Nikki Beach. Nikki Beach, created by Michael Penrod, is one of the trendiest beach clubs in Miami, frequented by celebrities and models. Nikki Beach possesses facilities in Miami and Hollywood in Florida, New York City, Saint Bartholomy in the Caribbean, Cabo San Lucas and Puerto Vallarta in Mexico, Marbella in Spain, Sardinia and Saint Tropez in the Mediterranean, in Morroco, and now, in Panama. Two hotel projects will be constructed and will operate under the brand Nikki Beach, one in Playa Blanca and the other at the Amador Causeway.

Michael Penrod, the international representative of Nikki Beach, was in Panama the first week of December to attend the launch of Destiny Real Estate Sales & Marketing. At the launch party, Destiny Real Estate & Sales presented three real estate developments to be constructed in 2007, which will be primarily promoted to the United States market. The three real estate developments represent a combined investment of 110 million dollars.

The project Casa Grande Luxury Beach Community involves a total investment of 60 million dollars over its three stages. The project, administrated by Nikki Beach International, will be located in Playa Blanca and possess a Polynesian style residential community, including a 100-room condo hotel and resort. Construction will commence in January 2007 and the first phase is scheduled for completion in December 2007.

Nikki Beach will construct the Panama Canal Hotel & Spa on the Amador Causeway, between the Yatch Club and the soon-to-be Ghery Museum. Approximately 30 million dollars will be invested in the Panama Canal Hotel & Spa, and construction will begin mid-2007. The arrival of Nikki Beach may attract a new crowd to Panama.

Traditionally, Panama has been an attractive destination for retirees, baby boomers and snowbirds. However, the concept of Nikki Beach is quite distinct from these other groups. Nikki Beach is focused towards an exclusive market: People over 30 with purchasing power that want to have a good time in an exotic, unique environment.

Nikki Beach is exclusive property of Michael Penrod and his family, though at some of their clubs and hotels they do maintain strategic alliances with local investors. Also, they own their own magazine, music division, clothing line and television station.

How did Nikki Beach arrive in Panama? Raul Almeida, Puerto Vallarta’s Nikki Beach representative, reveals that they were in search of new markets when they met Rugiere Galvez, president of Destiny Real Estate, who proposed the ideal. After they visited Panama, the rest was a matter of sorting out the details.

Panama could be the new destination for this exclusive market of “jet setters.” Almeida, stressing the positive economic impact that these projects have on a region’s tourism industry, spoke about the group of individuals that travel to other countries for a weekend’s entertainment, and that Panama could soon become a hit destination for this distinct crowd.

Penrod, who spent his entire visit signing contracts with 5 new hotels that will operate under Nikki Beach, added that they plan to offer a place where tourists and personalities can come during the winter to have a good time.

Pendrod has seen in Panama an “international environment” and believes that Nikki Beach will complement those characteristics. His aspiration is to make “something big” in Panama, such as celebratory parties for film or fashion festivals, such as those in Cannes and Venice.

From panamarealtor. com

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Howard AFB becomes Panama Pacifico

Many vets formerly stationed in Panama remember Howard AFB, named after Maj. Charles H. Howard (1892–1936), who flew in Panama during the period 1926-1929 and who had been part of the crew on a flight of B-10 bombers to Alaska in 1934. With the decommissioning of the base in 1999, Panama realized that leaving it to private enterprise was better than having any government run it, so it has become a low-tax zone for service exporters called Panama Pacifico.

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The Panama Pacifico Special Economic Area is an area assigned for the production of goods and services with high added value and technology. It is located in the former Howard Air Station. Panama Pacifico governs its relations with the Panamanian State by means of Law 41 of 2004.

Incentives are granted for the following activities:

• Corporate Main Offices
• Back Office operations
• Call Centers
  
• Multimode and logistics services
• High technology products and manufacturing through processes
• Aircraft maintenance, repair and reconditioning
• Services transfer to the aviation industry
• Offshore services
• Movie-making industry
• Transmission of data, radio, television, audio and video
• Transfer of inventories between companies established in the area
• Transfer of goods and services to ships, airplanes and their passengers
• Sale of merchandise not manufactured in Panamá Pacífico, destined for export, when manufactured by multinationals or any other of its affiliates, subsidiaries or companies of the same economic group.

Fiscal Incentives:

• Exemption of any tax, fee, tariff, encumbrance or customs duties on any merchandise, product, equipment, service and other goods in general that are introduced in Panamá Pacífico.
  
• Exemption of Transfer Taxes of Real Estate transfer and Services Taxes (ITBMS).
  
• Exemption of any tax, customs duties, tariff, fee or charge with respect to the movement or storage of fuel or other hydrocarbon and its byproducts.
  
• Exemption on any commercial or industrial license or registration tax.
  
• Exemption of the Fiscal Stamp Tax.
  
• Exemption of the Real Estate Tax on lands and commercial/industrial improvements, as well as improvements as of Real Estate Transfer Tax.
  
• Exemption of the export/re-export tax of any other type of merchandise, product, equipment, goods or services.
  
• Exemption of any tax, fee, customs duties, encumbrance, retention or other charges of similar nature applied to foreign creditor payments, for the interest, commissions, royalties and other financial charges generated by the financing or re-financing granted to companies of Panama Pacifico and for the financial lease of the equipment necessary for the development of the activities, businesses and operations that take place within Panamá Pacífico.

Labor Incentives:

• Fixed tariffs for overtime (25%) and work in laborers holidays (50%).
• Flexibility for assigning holidays to the employees.
• The companies can open on Sundays and other holidays.
• Foreign laborers: possibility to exceed the percentage rule of the Labor Code. The companies can request additional expat employees in excess of 15% if local labor is unavailable.
• Higher Education Training Center.
• Justified cause for dismissal due to losses and/or market fluctuations.

Immigration Incentives:

• The one-stop-shops of the site handles all the procedures related to visas and labor permits for their employees.
• Special visas are available investors and laborers (3 to 5 years is the standard period of time).
• The visa benefit is extended to the immediate relatives of the laborer: spouse, dependant children up to 25 years of age, dependant parents over 62 years of age.
• Introduction, only once, and tax-free of any personal and domestic belonging (up to US $ 100,000).

Important: Panama Pacifico has a One-Stop-Shop, where the process is promptly attended for the establishment of a business in the Howard area. This process joins the coordination of 15 government offices within the one sole site, and includes the paperwork of the visas and labor benefits which saves time and money to the companies.

http://www.aaeepp.gob.pa/
www.panamapacifico.com

Property Investing in Panama

View a database of carefully selected investment property in Panama

SUMMARY : Panama City is one of the world's least expensive first-world cities. It is also among the most modern and prosperous cities in Latin America with over 3 million people. The city's array of tall skyscrapers is reminiscent of Miami. It boasts incredible shopping where almost any product from the U.S. may be easily found. During the past several years Panama has been consistently rated in the top ten for the best retirement locations worldwide. A welcoming community, safe environment, low crime statistics, excellent incentives for retirees, together with the natural beauty and ethnic diversity that is Panama, all appeal to the increasing number of baby boomers from North America and Europe who are looking for a different option for retirement.

Currency: (USD) Dollar

US Dollar: A global benchmark currency. Little or no exchange rate parity fluctuation against Middle East currencies. The cost of living is significantly lower than that of Western Europe.

Economic climate: The trend towards an open economy and possible trade pacts with such nations as the U.S. and Mexico are conducive to investment in Panama. There are also no government expropriation or interference as in many Latin American countries. A business-oriented government encourages foreign investment. A government that realizes the value of private business to a developing country backs all investment. In 1946 Panama's business-oriented mentality led to the creation of the Colon Duty Free Zone, considered to be the second largest free trade center in the world, after Hong Kong. In addition, the Panamanian government offers foreigners who invest in Panama many attractive incentives such as legal residency and tax privileges.

Capital Gains tax: Since the enactment of Law 8 of 1956, successive legislation has been passed offering tax benefits to developers. It has been widely accepted that, as a result of these incentives purchasers of real property have also benefitted. This tax is applicable if there is a capital gain. This tax is also regulated by Article 701 and applied at a flat 10% rate, whether a corporation or an individual is acting as a seller, on the gain resulting from the price of the sale minus the price of the acquisition by seller, as well as registration, notary and real estate agent expenses. If there is no capital gain on the transfer of a property, the 2% transfer tax, is also paid in advance for the sale, levied on the difference between the price of the sale or an appraised value increased at a 5% yearly rate (whichever is higher) and the price of acquisition by the seller.

Popular investment areas: Panama City has become a cosmopolitan modern metropolis - there are many raise buildings overlooking the ocean and the Bay of Panama. Exclusive residential areas like Marbella, Paitilla, Coco del Mar, Punta Pacifica and San Francisco offer a good range of apartments and condominiums for sale. Suburban residential areas in the former Canal Zone like Amador Heights, Balboa, Albrook and Clayton offer large and attractive single-family homes and condominiums. Casco Viejo -- the oldest city on the Pacific Coast of the Americas -- has become a desirable place for real estate investment, encouraged by the Panamanian government Casco Viejo investment incentives for the restoration of the historic Casco Viejo district. Outside Panama City, there are beautiful real estate properties located in popular destinations including, Chiriqui, El Valle, and Altos de Maria. Known mostly for their cooler climates, incredible flora and quiet peaceful atmosphere, real estate in the highlands of Panama are ideal for those interested in retiring abroad. Bocas del Toro is another popular destination for Panama real estate. Most known for its crystal clear waters, rich Antillean culture, unique over-the-water architecture and laidback tropical atmosphere. In recent times, Bocas del Toro has become a booming center for European and American Expats, as well as an impressive number of tourists. Several of these destinations are also considered Tourism Development Zones, where additional tax benefits are granted to investors in hotel projects. Real Estate Values in Panama and primarily in these Pacific Coast Beach areas has been appreciating very steadily, and as interest and growth increases so to do the real estate values.

Price ranges: The Panamanian government incentives for the restoration of the historic Casco Viejo district encourage investment here, this area reminiscent of New Orleans or SoHo years ago abounds with shells of graceful buildings that are crying out for renovation. Outside of Panama City excellent real estate properties are available for developers and individuals. The more remote the location the more reasonable the cost but be aware that you may be far from utilities or roads. The real estate in Bocas del Toro offers beautiful Caribbean beach property. Here palm-fringed golden sands surround the islands and turquoise waters where the rain forest meets the ocean. Here families shop by boat, enjoy water sports and the natural beauty of this wonderful location - better yet it is still affordable.

Budgetary guide: Prices per square meter in Panama vary according to the location (city, mountain, beach). In the city, you may find prices starting 1000$ per square meter in a new condominium. In the mountain, the price may drop down to 20$...yes this is not typo however in those cases you might want to research the access possibilities to this property. Many areas in the mountains have no road of access and local transportation might not be available. In the beach, prices depend on the zone. An hour away from the capital prices start at 600$ per square meter depending on the quality of the beach and neighborhood.

Service Fees: Fees charged by the Public Notary and the Public Registry which total in the range of $200 to $300 for registering a buy/sell contract for the sale of real estate in Panama.The closing costs vary depending on the particular transaction. For example, if the property is held in the sellers personal name, and the buyer is transferring the property title to a Panamanian corporation (most recommended), then the closing costs would include; (1) the legal property transaction fee of US$1200 (includes; title search, buy/sell contract, closing, & property title transfer service), (2) public registry title transfer fees of approx. US$2.50 per every US$1,000 of the sales price and – if applicable - the mortgage amount, (3) escrow fees from 0.5% to 1% of the transaction amount (vary depending on amount of transaction), and (4) incorporation fee of US$1000 to setup the Panama corporation. However, if the property is held by a Panama corporation already, and the buyer is purchasing the shares of the corporation, then the transaction is relatively simple because there is no registration of title transfer, meaning that there is no title transfer tax, and no public registry title transfer fees. In this case, the closing costs would include; (1) the legal property transaction fee (includes; title search, review of tax liabilities, purchase of shares contract, and closing for US$800), (2) change of directors / resident agent of the corporation (approx. $350), and (3) escrow fees from 0.5% to 1% of the transaction amount (vary depending on amount of transaction).The notary and public registry costs total up to approximately $200 to $300 depending on the particular transaction. Title transfer taxes are by law paid by the seller. Escrow fees (if an escrow company is used), are normally paid by the buyer, and range from one half of one percent (0.5%) up to one percent (1%) of the transaction.

Mortgages: Between 60% - 70% of the purchase price or appraised market value, whichever is the lesser. Interest Rate from 5.5% to 6.5%, plus FECI tax of 1% per year.

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For more information go to:
www.slampanama.com
www.pensionadovisa.com
www.strategicpointconsulting.com

Can Panama Become the Singapore/Rotterdam-style Hub for Latin America?

at 11:25 am by David

• Keynote: H.E. José Domingo Arias, Vice Minister of Commerce and Industry, Panama
• Keynote: Philip Yeo, Chairman, SPRING Singapore, Special Adviser for Economic Development, Prime Minister’s Office (view background presentation)
• Keynote: Frank Heemskerk, Member of the Board of Management, Royal Haskoning
• Moderator: Don Ratliff, Executive Director, Georgia Tech Panama Logistics, Innovation & Research Center

Frank Heemskerk: Happy to see economic relations between Panama and Netherlands growing stronger. President Martinelli is visiting Netherlands this year, discussing how to avoid double taxation between the countries. These have been some of the fastest negotiations ever.

Location is important, but it needs to be maintained and shared. The Netherlands’ success is a combination of location, business/tax climate, and quality of life. Education is very important and people want the best environment for their children. Freedom of press and freedom of speech — this is what people want. The Netherlands has met these goals and this the reason for their success.

Panama outpaces the Netherlands on GDP growth, but this an advantage to the Netherlands and to Singapore as it creates more wealth and more trade for the entire world.

José Domingo Arias: Panama has been developing it’s place as a trade and logistics hub for 400 years, starting with the gold trade from the continent’s Pacific coast to Spain. Terms have now changed. Trade comes from the west of the United States and travels to the east.

The Canal will expand its capacity to be able receive bigger ships. This takes a great deal of investment. Panama is already the eleventh most competitive country in the world, and offers the most efficient and competitive port in the Western Hemisphere. The free trade zone of Colon moves $20 billion in trade a year. The airport Tocumen is seeing 12 million passengers per year and expected to see this grow to 14 million. The government is also in the process of building the highway between Panama City and Colon and extending the highway across the country. The most important thing is that the government is doing all this with global commercial partners.

We are focusing on developing teaching and education in Panama, especially executive education. Most of these students are from the public sector. Our long term project is to renovate the country’s entire education system. Our private partners and universities have the capacity to identify their needs are and will handle their training.

Experience exchange with Singapore and the Netherlands is vital for us. We have studied their model. We are learning enormous amounts from Singapore in terms of technology, a field in which they have considerable experience. Someone from the private sector asked me what guarantees we could provide that we can deliver. Our prestige is on the line, and our style of the administration is to get things done.

Panel conversation: Success comes from collaboration of the private sector, the public sector, and investigations. The impressive thing about Singapore is they never stop trying to be the best, even though they are considered by many to be the best. Panama is trying to encourage entrepreneurship. How can it encourage creating a “critical mass” of ideas?

Will East coast U.S. ports on the East Coast be able to handle new big ships that will be passing through the expanded Canal? If not, this will be to Panama’s advantage as it mean ships will be unloading their cargo, although the United States will catch up eventually.

Panama is more of a logistics hub than a trade hub. Panama needs to build on this and improve. Suggestions include broadening the agenda using better social policy and better water management. Singapore and the Netherlands have been able to convince shippers of the value of going through Rotterdam’s and Singapore’s ports. They’re efficient, tariffs are cheaper, and they’re easier to use. Panama should follow these models.

More in http://www.as-coa.org/blogs/panama2011/

24 Feb 2011: Panama - Where the World Meets

PANAMA
WHERE THE WORLD MEETS

Thursday, February 24, 20118:00 a.m. to 3:45 p.m.Registration: 8:00 a.m. to 8:30 a.m.Presentation: 8:30 a.m. to 3:45 p.m.
Panama Marriott HotelSalon Campo AlegreCalle 52 y Ricardo AriasPanama City, PanamaMap of location

Panama is set to continue growing at one of the fastest paces in Latin America. For 2010, Panama’s growth is expected to be 7 percent, and the IMF and UN forecast the country will lead GDP growth in the region over the next five years thanks in part to its public investment plans, which is close to $20 billion for the 2009 to 2014 period. More than 40 multinational headquarters have moved their regional operations to Panama due to its economic and political stability and have taken advantage of its strategic position and government incentives to attract investment. By continued strengthening of its logistics sector, Panama may be well positioned to become the Singapore-style hub for Latin America, providing foreign investors with a high-standard regional platform to develop its products and services in order to reach other markets.
For the second consecutive year, AS/COA, together with the World Bank and the government of Panama, is organizing a conference to provide an in-depth analysis of these issues. This year, the conference will be focused on the country’s economic prospects and the efforts and challenges to improve its competitiveness in the logistics sector.
Please join us as we address these issues with a group of internationally recognized senior business executives, government officials, economists and investment analysts.
CONFIRMED SPEAKERS:
Ricardo Martinelli, President of Panama
Demetrio Papadimitriu, Minister of the Presidency, Panama
Alberto Vallarino, Minister of Finance and Economy, Panama
Roberto Henríquez, Minister of Commerce and Industry, Panama
Alberto Alemán Zubieta, CEO, Panama Canal Authority
Edgar Blanco, Research Director, Center for Transportation and Logistics, MIT
Tanya Avellán, Director, Central America, Coca-Cola FEMSA
Frank Heemskerk, Member of the Board of Management, Royal Haskoning
Samuel Israel, CEO, Latin America, DHL Global Forwarding
Felipe Jaramillo, Central America Director, The World Bank
Sergio Luna, Vice President, Department of Economic and Sociopolitical Research, Citi Latin America
Rubén Ramírez, Representative Director, Panama, CAF
Don Ratliff, Executive Director, Georgia Tech Panama Logistics, Innovation & Research Center
Stefan J. Roehr, Director, Latin America Supply Chain, Sanofi-Aventis
Jordan Schwartz, Lead Infrastructure Economist, Latin America and the Caribbean, The World Bank
Peter V.A. Shaw, Regional Credit Officer for Latin America, Fitch Ratings
Carlos Urriola, General Manager Manzanillo International Terminal and Senior Vice President, Stevedoring Services of America
Philip Yeo, Chairman, SPRING Singapore, Special Adviser for Economic Development, Prime Minister’s Office (view a background presentation on Singapore’s economic development)
Susan Segal, President and CEO, Americas Society and Council of the Americas
ACCESS THE AGENDA.*

To register go to http://www.as-coa.org/blogs/panama2011/

Widening of Panama Canal results in more spending elsewhere

The $5.25 billion being spent on widening of the Panama Canal is only the beginning of expenditures in the rush to accommodate giant container ships. Billions more dollars will be spent in the United States, as ports rush to expand facilities to receive the post-panamax ships passing through when the expansion is completed in 2014, one hundred years after it first opened.

Panama has been hosting delegations or port authorities and logistics experts from New York to Miami, including Savannah, and Atlanta, Georgia; Charleston, South Carolina; and Jacksonville Florida.

The widening will lead to the biggest shift in the freight business since the 1950s, when ships first started using giant containers of equal size.

Some of the ships known as post-Panamax can carry three times as many containers as the largest ships currently making the 48 mile transit.


The widening will also allow the U.S. Navy to transit some of its super sized aircraft carriers that currently have to make the long haul around the cape.

The expansion will enable products made in Asia to be sent directly to the East Coast instead of being unloaded on the West Coast and then sent east by train or truck.

A result could be a shift in business worth billions of dollars to ports, and big savings for companies like Ikea, Home Depot and Wal-Mart, always on the hunt for more efficient ways to serve shoppers in the Eastern third of the United States, where a majority of the U.S. population lives.

To capture some of the new traffic, almost every large East Coast port and those along the Gulf of Mexico have projects under way. Some ports that are too small to handle the giant ships are improving railroads and truck routes, making them more efficient in anticipation of an overall increase in the number of containers coming to the East says the New York Times.

Others want to dig deeper channels and become the leading port in their regions for companies operating the big vessels.

Containers have become the name of the game in shipping says a lead article. Although cruise ships and imports and exports of cars, oil and bulk agricultural loads like cotton and fertilizer still make up a good portion of port traffic, most of the growth is in containers filled with products that Americans like to buy.

The newest, biggest ships can carry the equivalent of as many as 15,000 containers that are 20 feet long. But they are also heavier, wider and require deeper water. In Savannah, for example, the water is only 42 feet deep. That is enough, with tidal variations, to handle ships loaded with 5,500 containers.

The port at Norfolk, Va., is 50 feet deep, and is the only one on the East Coast that can handle the biggest, fully loaded container ships.

The navigation channel that feeds the Port Newark-Elizabeth Marine Terminal in New Jersey is deep enough, but the Bayonne Bridge is not tall enough for the new container ships to pass under.

Officials at the Port Authority of New York and New Jersey are studying options. They might raise the bridge by 64 feet. A study estimated the cost at $1.3 billion.

As Savannah port officials are learning, digging up six feet of mud is not easy or cheap. Environmentalists are concerned that dredging will cause historic Savannah buildings along the shore to tumble into the water, suck sand from the shores of Tybee Island and ruin freshwater marshes.

The Corps of Engineers' environmental impact document, issued after a 14 yearstudy, suggested deepening but not widening the channel to protect the buildings along the shore and adding 3,000 acres of wildlife preservation land to help offset the impact on freshwater marshes.
http://www.dredgingtoday.com/2010/12/13/panama-canal-expansion-to-bring-major-benefits/

Panamapundit logs off

Panamapundit is the username of Sam Taliaferro in his Panama Investor Blog postings until his unfortunate passing away. In his blog he provided updates about business developments in Panama not readily available in English, analyzed from a pro-business perspective and his experience developing a resort community in Panama. He will be missed....

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Samuel Walker Taliaferro VII

June 10th, 1952 – February 17th, 2011

Sam Taliaferro, devoted father and husband, developer, entrepreneur and cherished friend to hundreds of people around the world, passed away early this morning after a two year battle with cancer.

Words like "pioneer" and "visionary" are used frequently to describe successful people but few truly deserve those titles as much as Sam.

http://primapanama.blogs.com/_panama_residential_devel/2011/02/samuel-walker-taliaferro-vii.html#tp

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An inventor by profession, Sam developed and patented numerous technologies used by fortune 100 companies throughout the world. He built a number of manufacturing operations to build these technologies, the last one in Costa Rica in 1995.

In 2000 he had an idea to create Valle Escondido, a residential resort community in the mountain highlands of Panama that would appeal to those looking for an exotic yet first world lifestyle. The small village where the project is located has become known throughout the world as a retirement/tourist hot spot due to his marketing efforts and the success of the development. It was rated the number one foreign retirement destination in the western hemisphere by the AARP in 2002 and one of the top five best lifestyle values in the world by Fortune Magazine in 2005. The success of the project lit the fuse that started the real estate boom (and bust) in Panama.

In 2005 Sam began writing the Panama Investor Blog which focuses on the country from an investors prospective and reaches people interested in Panama from all over the world. Current subscription is about 7000.

Sam and his wife Thalia also operate the Valle Escondido resort Golf & Spa located in the center of the residential project. The resort employs about 80 full time Panamanians and is one of the areas largest employers.

http://primapanama.blogs.com/_panama_residential_devel/who-is-sam-taliaferro.html

Abuses by Panama Immigration Directors reach Inter-American Courts

Abuses by Panama Immigration Directors against migrants now have resulted in a decision against the Republic of Panama by the Inter-American Court of Human Rights. Ecuadorian citizen Jesús Vélez Loor entered Panama in November 2002, when he was detained by the National Police border post in Tupiza, Darien. A detention order was issued by the then Director of Immigration - at the time Ilka de Barés, unnamed in the decision - and Vélez was mixed with the criminal population at La Palma jail. This was the 2nd time Vélez entered Panama without a permit, so he was convicted without due process under an administrative order to 2 years of imprisonment at La Joyita Detention Center.

Why are Panama taxpayers saddled with having to pay the penalties ordered against the Republic for abuses by unelected public officials ?

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UPDATES FROM THE REGIONAL HUMAN RIGHTS SYSTEMS UPDATES FROM THE REGIONAL HUMAN RIGHTS SYSTEMS

Inter-American court of human rights rules against Panama for torture and wrongful detention of Ecuadorian migrant

In November 2010, the Inter-American Court of Human Rights (Court) ruled against Panama in its first case addressing the vulnerability of irregular and undocumented migrants. The decision in Vélez Loor v. Panama came seven years after the Court issued an advisory opinion on the rights of undocumented migrants. The opinion concluded that all migrants, irrespective of migratory status, must be guaranteed due process of law and full “enjoyment and exercise of human rights.” The advisory opinion also stipulated that states must affirmatively act to avoid limiting or infringing on the fundamental rights of migrants.

In November 2002, Panamanian police arrested Jesús Vélez Loor, an Ecuadorian national, for entering the country without appropriate documentation. He was subsequently transferred to a detention facility and sentenced, without legal representation or awareness of the proceedings against him, to two years imprisonment for entering Panama illegally multiple times. Vélez Loor testified to the Court that while imprisoned, he was subjected to tear gas, burns, sexual abuse, and beatings resulting in a cracked skull. Desperate to ameliorate his situation, Vélez Loor started a hunger strike and partially sewed his mouth shut. After Vélez Loor had endured deplorable conditions and abusive treatment for ten months, the Ecuadorian Consulate and Panamanian immigration authorities arranged his deportation, sending him back to Ecuador in September 2003. Although he reported his torture and the Panamanian Office of Foreign Affairs initiated an investigation, Panama made no further efforts to investigate Vélez Loor’s abuse. Vélez Loor, still suffering medical and psychological trauma as a result of his torture and prolonged detention, continues to speak out about the severe violation of his rights in the hopes that what happened to him “never happens to anyone else again.” More information on his story can be found on his blog at http://jessloor.wordpress.com//.

In Vélez Loor, the Court found that Panama violated the petitioner’s rights to humane treatment (Article 5), personal liberty (Article 7), judicial protection (Article 25), and fair trial (Article 8) under the Inter-American Convention on Human Rights (Convention). It also found that Panama violated Vélez Loor’s rights under the Inter-American Convention to Prevent and Punish Torture. Additionally, the Court ruled that Article 67 of Panama’s 1960 Decree Law No. 16, which allows punitive sanctions for violations of migration laws, is incompatible with the Convention when used as a basis for arbitrary incarceration. Rather, the Court held that states should only detain migrants sparingly and on an exceptional basis, for the shortest time and least restrictive means possible. Moreover, if an administrative body orders detention, a judge or tribunal must be able to review the decision and the detained migrant must be able to contact and receive help from his country’s consulate.

The decision indicates the Inter- American System’s intolerance of discriminatory, abusive, and punitive treatment of undocumented migrants as part of states’ broader attempts to curb illegal migration. With more than 214 million migrants worldwide and estimates of upwards of 400 million in the year 2050, increased attention to treatment of migrants and reform of broken immigration systems will be crucial. In Vélez Loor, the Court ordered Panama to pay monetary reparations to Vélez Loor, further investigate his allegations of torture, implement capacity- building measures for officials to enhance the investigation of torture claims, and provide appropriate detention facilities for those migrants it determines require state custody.

Full text in http://www.wcl.american.edu/hrbrief/18/3hrsystems.pdf?rd=1

Panama and Qatar Sign Tax Agreement

After many announcements and press releases, the Qatar refinery in Panama has not broken ground yet. At least they signed a double taxation agreement...

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HH the Emir Sheikh Hamad bin Khalifa al-Thani and Panama President Ricardo Martinelli witnessing
the signing of an agreement on the avoidance of double taxation and prevention of fiscal evasion
with respect to taxes on income and the protocol between the governments of the two countries in New York.

www.gulftimes.com

See also:

Panamá y Qatar firman tratado para evitar la doble tributación
Qatar and Panama sign agreement

Panama and Cyprus Discuss Tax Agreement

Panama and Cyprus are both countries which rely heavily on maritime logistics, banking center and tourism.

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Meeting of President Christofias with the President of Panama
23/09/2010

The President of the Republic Mr Demetris Christofias had a meeting, yesterday, with the President of Panama Mr Ricardo Martinelli.

Present at the meeting was also the Government Spokesman Mr Stefanos Stefanou, the Permanent Representative to the UN Ambassador Minas Hadjimichael and the Director of the Diplomatic Office of the President, Ambassador Leonidas Pantelides.

After the meeting President Christofias made the following statement:

"I had a very cordial and friendly meeting with the President of Panama, which he requested. Panama is a friendly country to Cyprus, we are together at the Non – Aligned Movement for several years, with a very firm position on Cyprus issue. Of course, the President has reaffirmed his position that Panama stands by Cyprus in its effort to reunite the country and implement the international law and the UN Resolutions on Cyprus.

Moreover, we talked about the need to expand bilateral relations between the two countries. Agreements are underway about the avoidance of double taxation and, also, the abolition of visas in both countries. We also talked about the need to develop economic relations between the two countries. The distance is great and this is the only problem, but I believe that there is enough that connects us, which we should take into consideration."

Asked if the possibilities of cooperation between the two countries for shipping issues were discussed, the President of the Republic said:

"These issues were discussed a few times, they are on the agenda too, but I repeat, the distance is great. The Government of Panama is doing whatever possible to avert the docking of the ships under Panamanian flag, in Famagusta".
www .presidency.gov. cy

See also:
Panamá y Chipre firmarán tratado para evitar doble tributación
New Ambassador of the Republic of Cyprus to Panama - 03/11/2010

Панама корпорации закона

Панама

Официальное название: Республика Панама
Площадь: 77 000 кв. км.
Численность населения: 32 560 000 чел.
Столица: Панама
Государственный язык: испанский, английский
Денежная единица: бальбоас, доллар США

Общая информация.

Уникальное географическое положение Панамы, занимающей длинный узкий перешеек между Атлантическим и Тихим океанами, издавна делало ее оживленным морским торговым перекрестком. Уже в начале XVI в., вскоре после открытия перешейка Колумбом, конкистадор Бальбоа по заданию испанского короля приступил к поиску соединяющего океаны морского пути. Он вышел через горы и тропическую сельву к тихоокеанскому побережью, но пролива не обнаружил. Безуспешными оказались и последующие попытки. Так что возникший в 1519 г. на месте индейской деревушки город Панама почти 400 лет оставался не межокеанским портом, а сухопутной перевалочной базой для ценностей — прежде всего золота и серебра, отправлявшихся из колоний тихоокеанского побережья Южной Америки в Испанию.

Преимущества:

• Панама является офшорным центром уже более 75 лет.
• Нерезидентные компании освобождены от налогообложения.
• Соблюдается конфиденциальность информации о владельцах, акционерах, директорах.

Законодательство о компаниях General Corporation Law, 1927; Law Regulating Enterprises of Limited Liabilty No. 24. Тип безналоговой компании Limited Panamian Corporation (LPC) — компания с ограниченной ответственностью, Partnership - товарищество. Разрешенная деятельность Любая незапрещенная деятельность. Запрещенная деятельность Вести бизнес с резидентами Панамы, за исключением фирм, предоставляющих юридические, бухгалтерские, банковские, консалтинговые и др. услуги, администрирование трастами и фондами. Владеть недвижимостью на территории юрисдикции. Вести банковскую, страховую, экспедиторскую деятельность без получения специальных лицензий и разрешений. Налогообложение Полное освобождение SAFI от налогов. Ежегодные отчисления Лицензионный сбор 600 USD (300 агенту, 300 регистрационному органу). Валютный контроль Нет. Соглашения об избежании двойного налогообложения Нет. Срок и условия регистрации новой компании 10 дней. Требования к названию компании Возможно любое название, не зарегистрированное в реестре, указывающее на международный бизнес. Уставный капитал 10 000 USD, разделенный на 100 акций по 100 USD каждая Для Limited Partnership уставный капитал составляет 2000—500 000 USD Нет требований относительно минимального уставного капитала. Предложенный уставный капитал Акции без номинальной стоимости и на предъявителя должны оплачиваться полностью. Акции на предъявителя хранятся у агента. Акции Акции на предъявителя или именные, с номинальной стоимостью или без номинальной стоимости. Акционеры Минимально — один. Директора - количество - требования - полномочия Три директора. Нет требований к национальности и гражданству. Требования к собраниям - директоров - акционеров Нет требований к проведению собраний директоров и акционеров. Зарегистрированный офис Обязательно. Секретарь - количество - требования - полномочия Нет требований. Зарегистрированный агент Один. Необходимость - ведения бухгалтерии - сдачи годового отчета Нет. Нет. Нет. . Конфиденциальная информация Сведения о владельцах, директорах, акционерах.

Source: Tax Consulting UK.

Panama as Regional Business Hub

Because of the geographical position of Panama, located in the center of the American Continent, with access through land, sea and air, with a tropical year round climate, free of natural disasters. With an open service economy, capable human resources, dollarized economy, the international finance center, world class logistics platform and economic political and social stability, make Panama the ideal site for making businesses in the region.

WHY INVEST IN PANAMA?

Panama is a country with a service vocation, that possesses a privileged geographical location, that has allowed us to become one of the most important logistic centers of the Western Hemisphere for the storing and distribution of world cargo, a bridge for the mobilization of passengers to the entire American Continent and facilitator of efficient and modern communication services. As a commerce promoter, both nationally and internationally, Panama enjoys political, social and economic stability.

Panama has gone from being a bridge to becoming a logistic platform by air, sea and land, with the Panama Canal as main axis, transporting over 300 million of CPSUAB (Container, Bulk, etc.) presently serving more than 14,000 ships through 144 maritime routes and complementing with a system of container terminals in the Pacific and the Caribbean, that serve as cargo transship and redistribution, that recorded an annual movement of containerized cargo of 4.25 million TEU's, added to the inter-oceanic railroad that has a capacity 330,000 containers per year from one coast to anther. Panama also has the Colón Free Zone, the most important one in the Western hemisphere, with an annual trade exchange of over 19 thousand million dollars through its approximately 3,000 companies established in the Colón Free Zone. The development of the Panamá Pacífico Special Economic Area, in the former Howard Air Station, will serve as a space destined to the production of goods and high technology services.

We offer an efficient air service through the Tocumen International Airport, presently undergoing a remodeling process for offering a comfortable and safe atmosphere to all the travelers that visit our country and an expeditious and efficient attention to the transiting passengers, who do not go through customs or migration checks. From the airport the Copa Airline operates its Hub that offers more than 46 destinations to 25 countries in America and excellent connections, some of them with three daily flights to the most important cities of Latin America. In addition we account for with an excellent internal offer of direct flights to the principal cities of the interior of the country.

Panama has become the preferred center for the installation of five submarine optical fiber cables, turning into the ideal place for telecommunication companies and data centers since we have the advantage of offering great connectivity with North and South America, Europe, Asia and the Caribbean, advantages that companies have learned to use effectively, such as MCI, Cable & Wireless and Movistar that offer cellular telephony services and first quality internet to the international market.

Our prestigious International banking Center, with over 93 internationally renowned banks, reflected for the first Quarter of 2010, assets in the order of US$ 65,000 millions.

Our medical and health services are well known internationally and they have the two best private hospitals of the Central American region; equipped with the most recent medical technology, and they are affiliated to world famous hospitals such as the Baptist Hospital in Miami, Florida and the Johns Hopkins Medical Center in Baltimore, Maryland.

Our tropical climate and varied tourist offer sets us among those preferred for the travelers that can find in our country picturesque indigenous and colonial communities, white sand beaches and coral reefs with indescribable beauty, mountains with fresh climates and tropical jungles with an exuberant vegetation, habitat of innumerable flora and fauna species. And with our excellent highway network and short distances the country can be toured in only six hours.

For these reasons, Panama has been chosen by important multinational companies such as Samsung Electronics, Inc., DHL, DELL, Hutchinson Port Holding Group, HSBC, BICSA, SCOTIABANK, Assicurazioni Generali, American Life Insurance Company and many more, as main offices for their regional operations. In addition, some of the most recognized International Organisms such as UNICEF, UNDP, OAS, the Spanish Agency for International Cooperation (AECI, initials in Spanish), and the BLADEX [Latin American Export Bank] among others, have chosen Panama for establishing their operations.

Panama offers goods and services at reasonable prices as compared to its nearest neighbors, with Free Trade Treaties (TLC, for initials in Spanish) with Taiwan, El Salvador, Singapore and Chile. Furthermore, we are going through the final negotiations of a TLC with the United States and Central America and we are preparing our entrance in the G-3.

http://proinvex.mici.gob.pa

$2.6 billion in loan guarantees vs. 13,000 jobs

Right after the U.S.-Panama Tax Information Exchange Agreement was signed by Vice-President Juan Carlos Varela, he attended the signing of an agreement for the US $2.6 billion purchase by COPA airline (NYSE: CPA) of 32 Boeing (NYSE: BA) airplanes, with financing guaranteed by the U.S. Export-Import Bank http://www.exim.gov .

The same day that 13,000 jobs of the Panama financial center are put in jeopardy, a Panamanian multinational secures financing guaranteed by the U.S. taxpayer. Quid pro quo?

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Copa and Boeing sign largest ever Panama-US business deal

Wednesday, 01 December 2010 17:35


Panama's principle airline Copa, and the Boeing aircraft company signed a $2.6 billion dollars agreement for the purchase of 32 aircraft onTuesday (November 30).

It was the largest ever business transaction between the U.S. and Panama

The ceremony took place at the U.S. Department of Commerce, soon after the signing of a tax disclosure agreement between the two countries.
Panamanian vice president and foreign minister, Juan Carlos Varela represented the government at the ceremony along with the chief executives of both companies: Pedro Heilbron of Copa Airlines, and Jim Albaugh of Boeing.

The 32 aircraft will be delivered between 2015 and 2018, and are part of the planned growth of the company, said Heilbron.

Copa Holding's president, Stanley Motta, and Vice President of Finance, Victor Vial, shared details of the funding for the deal, which was supported by a group of international banks such as Citibank, JP Morgan Chase, BNP Paribas, and Bank Exim.

Motta said the loan was agreed at very low rates for the guarantees provided by the Exim Bank.

http://www.newsroompanama.com/business/2033-copa-and-boeing-sign-largest-ever-panama-us-business-deal.html

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EX-IM BANK SUPPORTS $132 MILLION US AIRCRAFT SALE TO PANAMA
Largest Ever Ex-Im Bank Transaction To This Country

The Export-Import Bank of the United States is providing a $113 million long-term guarantee to support the $132 million export by The Boeing Co., Seattle, WA, of four B737-700 aircraft plus two spare engines made by CFM International, Inc., Cincinnati, OH, to Compania Panamena de Aviacion, S.A. (COPA), Panama City. Each Boeing aircraft is also equipped with two CFM engines.

"This is the largest transaction ever authorized by Ex-Im Bank for a company in Panama," said Ex-Im Bank Chairman James A. Harmon. "We are delighted to finance US exports that support economic growth in this important Central American market while sustaining US jobs at thousands of Boeing subsuppliers at home."

Ex-Im Bank has supported Panamanian customers for over 50 years. This latest transaction is more than double the previous record-setter, a $60 million financing of a gas turbine export in fiscal 1994.
...

Full text in http://www.exim.gov/pressrelease_print.cfm/070FCCF7-0A18-EFDE-9CA82347DE2AAF8B/

http://mire.gob.pa/noticias/vicepresidente-y-canciller-varela-orador-en-firma-de-contrato-entre-copa-airlines-y-la-comp
http://www.dialogo-americas.com/en_GB/articles/rmisa/features/regional_news/2010/12/03/feature-03
http://www.ascendworldwide.com/2010/12/copa-airlines-completes-order-for-32-boeing-737ngs-valued-at-usd-26bn-seeking-financing-from-eximban.html
http://www.allbusiness.com/transportation/air-transportation-airlines/5896820-1.html

History of Real Estate Agents

December 28 in Panama is Innocents' Day which is similar to April's Fools Day and remembered with hoaxes. For the next time you are looking at properties in Panama with a real estate agent, here is a joke to share from Kelly's.com:

6 MILLION BC: God searches for a planet to establish life. Encounters real estate agent from "Lucifer's Planets & Gardens" who says "I've got a great deal on a fixer-upper just 90 million miles from the Sun."

5.9 MILLION BC: God buys the Earth and, after the closing, discovers it is a mass of molten goo. Angry, God confronts the agent and banishes him to spend eternity wearing polyester suits.

4 MILLION BC: God creates the ocean and the seas. By accident, a pool of pond scum transforms itself into the National Association of Realtors.

3.5 MILLION BC: God creates Florida.

3.49 MILLION BC: Thousands of real estate agents crawl out of the ocean to scout good condo locations. Market immediately crashes when agents realize that "snow birds" won't be invented for another 2 million years.

3 MILLION BC: A meteor crashes into Earth. The resulting crater creates a giant black hole filled with green ooze. The Multiple Listing Service is born.

2.45 MILLION BC: God makes Adam and Eve. However, delays in constructing Garden of Eden force Adam and Eve to live in an apartment eight months.

244 MILLION BC: Shopping for a move-up garden, Eve visits an Open Garden and encounters a fork-tongued real estate agent who tells her, "Garden, why would you want another one of those? I've got an entire apple orchard you can have real cheap."

243 MILLION BC: Adam and Eve become the first humans to truly understand what it means to buy from a real estate agent.

550 BC: Jealous of rising property values, real estate brokers in Greece devise a way to attack Troy by using a Trojan Horse.

42 BC: Cleopatra decides to build the Pyramids. Real estate agent and builder try to convince her that Squares would be much cheaper.

30 BC: Rome touted as "the hottest housing market in Europe" Thousands of buyers flock in to make deals with real estate agents.

29 BC: Rome real estate crashes. Julius Caesar calls a meeting of his advisors to see what can be done. Chief real estate broker Brutus suggests Caesar tours Rome to inspire consumer confidence. "Just lead the way," Brutus says, "I'll be right behind you."

500 AD: Middle ages bring major real estate slowdown. Agents are forced to take second jobs as undertakers. Scandal breaks out when agents are discovered to be removing gold fillings from dead people.

1308 AD: Real estate agent list a tower in Pisa, Italy as a "one of a kind property. Solid building guaranteed not to lean."

1492 AD: Christopher Columbus lands in America. However, he mistakenly believes he's in India, thanks to a bogus land survey provided by a Spanish real estate broker.

1620 AD: Pilgrims land on Plymouth Rock. First colonial real estate agent promises Pilgrims that Massachusetts is "always sunny and warm. Never drops below 70 I swear."

1621 AD: Giant blizzard nearly wipes out Pilgrims. Real estate agent is banished to New Jersey.

1626 AD: Manhattan bought for 100 beads and trinkets from the Indians. The Indians' real estate agent takes 6 beads as a commission.

l803 AD: Napoleon shocks and angers French real estate agents when he sells Louisiana to United States without an agent. At 515 million, sets record for largest "FSBO" (for sale by owner) sale in history.

1867 AD: United States purchases Alaska from Russia for 2 an acre, after Russian Czar is given advice by real estate agent that Alaska is "utterly useless" land with no value at all.

Why Tax Information Exchange Agreements Are 'Toothless'

Despite the ominous messages being communicated to the public, taxpayers have little to fear from the tax information exchange agreements (TIEAs) to which most tax havens have rushed to commit.

July 16, 2009
by Kristofer Neslund, CPA/DBA

.... the flaws in the Model TIEA overwhelm its positives.

Weaknesses

The OECD has frequently noted that havens that had agreed to adopt the TIEA failed to implement it. There is a real concern that some or many of the haven jurisdictions that rushed to announce their commitments to the TIEA were simply playing for time, hoping the furor will die down before they actually have to implement the agreements.

Domestic bank secrecy laws trump these agreements. Indeed, UBS has raised Swiss bank secrecy laws as its primary defense in the current John Doe summons enforcement proceeding.

Havens are exempt from supplying information they do not collect and they often collect little. The British Virgin Islands, for example, has more than 400,000 registered corporations but requires neither the identification of shareholders or directors nor the maintenance of financial records.

Severe procedural restrictions are imposed to preclude "fishing expeditions" — i.e., broad, general inquiries. Automatic information sharing is expressly excluded.

The requesting jurisdiction must:

- Identify a specific person,
- Identify the specific information sought and the tax purpose for seeking it,
- Identify why it believes the information is within the requested jurisdiction and
- Demonstrate that it has exhausted all other means for obtaining the information.

The result is a slow and unwieldy process that precludes serious real-time help to tax authorities. Offshore tax cases are complex and labor-intensive, taking 500 days longer than normal to develop. The cumbersome, low-yield information exchange process contributes to these delays and deters the IRS from aggressive enforcement. Even when the government has proven criminal activity, the process is ineffectual. The U.S. sent tax information requests to Switzerland after UBS admitted to criminal activity; it received back only 12 names (out of an estimated 52,000 U.S. accounts holding $15 billion). It is not surprising that there are only a few dozen TIEA requests each year. To be of genuine value, information sharing needs to be comprehensive, real-time and automatic.

Critics argue that the havens' rapid adoption of Model TIEA is little more than public relations, allowing them to make a show of cooperation while going about business as usual, supported by governments that are more than happy to have their taxpayers believe that offshore tax evasion has become much more dangerous.

The OECD's Model TIEA seems to have adopted a lowest-common-denominator approach — offering minimal effectiveness to gain widespread acceptance by havens, in turn allowing world leaders to proclaim a global assault on offshore tax evasion. Given the sharply opposed interests of some of their members, the TIEA's endorsement by the G-7, G-8, G-20, United Nations and EU is supportive of this view.

The establishment of a low information exchange standard for the international community could backfire. Tax havens — little deterred by their TIEAs — are likely to assert that, by having implemented the benchmark standard, they have ceased to be "tax havens." The Bahamas' ambassador to the U.S. has suggested as much on behalf of the Caribbean TIEA adopters. This assertion may be hard to counter without embarrassment; and it may become very difficult to sanction adopting havens when it becomes obvious that their behavior has not changed.

Conclusion

There are many reasons not to engage in offshore tax evasion, but the Model TIEA is not one of them.

The public has been led to believe that all it takes now to open the international information floodgate is a simple request by a tax authority. Not so. The Model TIEA is a slow, largely ineffectual, resource-intensive process that seems unlikely to be used much more in the future than it has been in the past, despite the increased number of haven jurisdictions adopting it.

Tax practitioners should be rendering advice based on the reality, not the perception, of these agreements.

Kristofer Neslund, CPA/DBA, LLM, JD, is an associate professor of taxation at the Golden Gate University.
Read the full text in http://www.cpa2biz.com/Content/media/PRODUCER_CONTENT/Newsletters/Articles_2009/Tax/Toothless.jsp

U.S., Panama Sign New Tax Information Exchange Agreement

The U.S. has Tax Information Exchange Agreement (TIEAs with the following offshore financial centers:
Bahamas
Barbados
Bermuda
Cayman Islands
Costa Rica
Dominica
Gibraltar
Grenada
Jersey
Liechtenstein
Netherlands Antilles
St. Lucia

The TIEAs with Antigua and Belize were terminated.

Fortunately, Panama law allows entities to redomicile corporations and foundations to other countries...

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In a ceremony at the U.S. Department of the Treasury on Tuesday, November 30, Treasury Secretary Tim Geithner and Panamanian Vice President and Minister of Foreign Affairs Juan Carlos Varela signed a tax information exchange agreement (TIEA) between the United States and Panama.

A press release on the TIEA can be viewed at link; the full text of the TIEA can be viewed at this link; and the TIEA Joint Declaration at this link.

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The Department of State has the honor to refer the Embassy of the Republic of Panama to the
Agreement between the Government of the United States of America and the Government of the
Republic of Panama for Tax Cooperation and the Exchange of Information Relating to Taxes
(“the Agreement”), signed today, and to confirm on behalf of the Government of the United
States the following understandings reached between our two Governments (“the Parties”):
1.
With respect to subparagraph 1(a) of Article 3 (Taxes Covered) of the Agreement, it is
mutually understood by the Parties that the term “all federal taxes” includes the following
taxes imposed by the United States:
2.
With respect to subparagraph 1(b) of Article 3 (Taxes Covered) of the Agreement, it is
mutually understood by the Parties that the term “all national taxes” includes the
following taxes imposed by the Republic of Panama:
(a)
Income Tax
(b)
Real Estate Tax
(c)
Vessels Tax
(d)
Stamp Tax
(e)
Notice of Operations Tax
(f)
Tax on Banks, Financial and Currency Exchange Companies.
(g)
Insurance Tax
(h)
Tax on the Consumption of Fuel and Oil Derivates
(i)
Tax on the Transfer of Movable Goods and the Provision of Services
(j)
Tax on the Consumption of certain Goods and Services
(k)
Tax on the Transfer of Immovable Goods
3.
With respect to Article 9 (Costs) of the Agreement, it is mutually understood by the
Parties that costs that would be incurred in the ordinary course of administering the
(a) Federal income taxes;
(b) Federal taxes related to employment;
(c) Federal estate and gift taxes; and
(d) Federal excise taxes.

domestic tax laws of the requested State shall be borne by the requested party when those
costs are incurred for purposes of responding to a request for information. It is also
mutually understood by the Parties that all other costs are considered extraordinary costs,
and shall be borne by the requesting party. Examples of extraordinary costs include, but
are not limited to, the following:
(a)
fees charged by third parties for research and copying documents;
(b)
fees for non-government counsel or experts appointed or retained, with the
approval of the competent authority of the requesting Party, for litigation in the
courts of the requested party related to a specific request for information;
(c)
fees and expenses of a person who appears for an interview, deposition or
testimony relating to a specific information request. The fees and expenses will
be the ordinary amounts allowed under the laws of the party in which the
interview, deposition or testimony is held or taken.
The competent authorities shall consult with each other in advance if extraordinary costs
are likely to exceed $1,000, or in the case of subparagraph (c) of this paragraph, $100, in
order to determine whether the requesting Party will continue to pursue the request and
bear the cost.
4.
The Government of the United States of America and the Government of Panama intend
that the Agreement enter into force as soon as is practicable following the enactment of
any legislation by Panama that is necessary under its domestic laws in order for Panama
to comply fully with the terms of the Agreement. The Government of Panama expects
that this legislation will be enacted before the end of 2011. As soon as practicable after
such legislation has been enacted, the Government of the United States and the
Government of Panama intend to take such actions, including exchange of notifications,
as are necessary to cause the Agreement to enter into force in accordance with its terms.
5.
The United States understands that, with respect to the necessary legislation referred to in
paragraph 4, Panama intends to enact legislation requiring the identification of the
owners of bearer shares. The United States further understands that such legislation:
(a)
will require resident agents acting for Panamanian entities to obtain and
maintain in their records information sufficient to identify the owners of
those entities, even in cases in which shares of those entities are issued in
bearer form, including, where the owner is a legal person, information
sufficient to identify substantial owners of that legal person. For this
purpose, a resident agent will not be required to obtain and maintain
information sufficient to identify substantial owners of legal persons in
cases where the resident agent acts for a professional client that is part of

an organization that is required to maintain information on such entities
and that has agreed to make available such information to the resident
agent when requested;
(b)
will require resident agents to produce ownership and client identity
information in their possession in response to a proper request under the
Agreement, whether with respect to newly-formed entities or entities in
existence at the time the legislation is enacted; and
(c)
will require resident agents to obtain such ownership information with
respect to entities existing at the time the legislation is enacted within a
five year period from the date of the enactment of the law.
6.
It is mutually understood that under laws currently in effect, each party is authorized to
obtain and exchange information, including information held by financial institutions and
other fiduciaries, pursuant to a request under a tax information exchange agreement,
regardless of whether the requested party has a domestic tax interest in such information.
7.
Under section 274(h) of the U.S. Internal Revenue Code, an individual may deduct from
income expenses incurred with respect to attendance at a conference or convention held in
Panama in the same manner and to the same extent the individual would be permitted to
deduct such expenses with respect to attendance at a conference or convention held in the
United States, provided that there is in effect between Panama and the United States a tax
information exchange agreement meeting the requirements of section 274(h)(6). It is
mutually understood that the Agreement is intended to meet those requirements.
8.
It is mutually understood that the entry into force of this Agreement does not prevent the
Parties from discussing the possibility of an agreement for the avoidance of double taxation
in the future.
The Department has the further honor to propose, on behalf of the Government of the United
States of America, that the present note and the Embassy’s affirmative reply thereto confirming
that the Government of the Republic of Panama shares these understandings shall constitute an
agreement between the two Governments on these points which shall enter into force on the
same date as the Agreement.
Department of State,
Washington, November 30, 2010