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A current theme in international financial circles is tracking down and eradicating tax havens. The Organization for Economic Cooperation and Development (OECD) has apparently gotten concessions from the Swiss to open up their banking systems a bit. Now lesser players such as Panama are under the gun. Panama is doing well because it attracts foreign investment. Part of why it attracts foreign investment is that it guarantees asset privacy. That could end.

Panama’s Problem

Panama has become a Latin American economic powerhouse because it attracts investment. Ten percent GDP growth a year for several years until now has been the order of the day. Even in 2009 Panama expects to grow its economy by five percent. A democratic society with a pro business government year after year attracts and keeps business. And, Panama’s Bearer Share Corporations and Private Interest Foundations have always offered a degree of privacy for one’s assets not found elsewhere.

If Panama is forced to rewrite its laws and make its banking, corporations, and foundations more transparent it may continue to get lending from international agencies but it may lose individual investors. Lending for huge projects like the Panama Canal Expansion hit the papers to the tune of $2.3 Billion. However, all of those smaller deposits going into Panama banks amount to much more over time and drive Panama’s small business community which provides most of Panama’s jobs.

Panama Real Estate and Bearer Share Corporations

Most folks who move to Panama to retire do not need to hide their assets. Many North Americans still have property and bank accounts in the USA and Canada, thank you very much. Thus it will not affect much of Panama residential real estate.

However, Panama commercial real estate depends on functioning businesses and businesses rely upon bank loans and banks rely upon investors. Currently Panama is injecting a 1.11 billion dollar stimulus into its banking system to keep credit flowing. The question that arises is if Panama will have to capital and freedom to use it if gets fewer bank deposits and more money with strings from international lending agencies.

For the time being no one has changed the laws here and typically it takes a year or more for things to move from idea to law to enactment in Panama. The setting up of infrastructure to oversee corporations could take a few years.

Panama Real Estate Today

Panama high end real estate is in pause mode. There are great deals on Avenida Balboa and throughout Panama City for anyone with cash. If you are interested in once every generation prices on Panama property come to see us for listings at ABPanama. We do business throughout the country and we have over 23 years experience managing real estate portfolios.