For a number of years, incentives and laws in Panama had been having the desired effect of improving Panama tourism inside of the delegated Panama Special Tourism Zones. These areas received favorable investment laws designed to enhance tourism. As the government took a look at the growing Panama tourism opportunities outside of the Panama Special Tourism Zones, it decided to create additional laws and property incentives for Panamanian areas outside of the zones as well.

Signed into investment law on December 28, 2006, Law No. 58 has been enacted this year for the purpose of offering incentives for investors who want to build, furnish or remodel lodging facilities outside the Panama's Special Tourism Zones.

This new piece of investment law establishes attractive tax exemptions for a minimum investment of $3 million in the Metropolitan area, including exemptions on the import of material and equipment, the import of vehicles for tourism development, and a 20-year exemption of property taxes. A minimum investment is $50,000 for areas outside of the Metropolitan area was also enacted.

Although there have been 10 Special Tourism Zones declared in Panama, there are other areas with great investment potential such as mountain regions and islands, among others. The desired effect of the new law is to draw more foreign investors to Panama as the country becomes more popular among expatriates from Europe and North America. This investment law represented the first major piece of property law with incentives for Panama tourism since Law No. 8 of 1994, which expired on December 31, 2005.

Ownership of real property and private investment is guaranteed and protected by Panama's Constitution. Article 44 of the Constitution reads: "... Private Property is guaranteed as long as it is acquired in accordance with the law by natural person or legal entity." When the Civilian Code was enacted it has stipulated that Panamanian law is applicable to both nationals and foreigners alike. This Code regulates general contracts under the principle of "autonomous of the will". The Constitution, as stated in Article 18, confirms that particulars are free to act in all matters which are not prohibited by law.

Furthermore, Article 3 of Law No. 13 (1993), which pertains to condominium law, specifies that the owner of real property can transfer, mortgage, or use his/her property in all types of legal acts, between living persons or by cause of death.

Several provisions have been enacted to qualify as a real estate broker. These provisions are:

1. It is necessary to have a professional capability license, issued by the Real Estate Technical Board.
2. Panamanian citizens and foreign nationals who have resided in Panama for over 5 years are eligible to request this license, as long as they pass the professional examinations.
3. Any additional mandatory requirements must be fulfilled.

With all of the emphasis placed on the Panama Special Tourism Zones, the government decided to start 2007 by promoting Panama tourism throughout the country. Law No. 58 provided the investment law needed to encourage efforts for Panama tourism in every part of the country.