Attracting Foreign Investors with Tax Incentives

As the American real estate market flounders more and more investors are seeking sound financial real estate investments outside the US. For these investors, Latin America has never looked better, offering strong and sound equity gains, low living costs along with increasing tax incentives to attract new buyers.

Many Latin American countries are competing for investors by offering attractive tax incentives in hopes of luring new money to the region, but Panama is leading the way with a new incentive to eliminate property taxes. This tax exemption law will affect both new and old real estate transactions. Simply put, building permits granted before December 31, 2009 will be exempt from property tax until the year 2030. Panama’s strategy is simple; by offering to lessen the tax burdens for new investors these once tax dollars are now circulating through the economy, strengthening Panama’s financial viability and attracting new residents and businesses to the country.

Panama differs from many of its neighbors as the small country’s economy has remained stable with an inflation rate of only 1% over the last 30 years. Extremes in interest rates and economic activity have been avoided in Panama; this feat has been accomplished by a favorable tax structure that continually attracts foreign investors along with the canal’s vital trade economy.

Panama’s sound economy has attracted retirees and business people seeking financial stability and a safe haven in a financially challenged world economy. More importantly, retirees and new residents are lured to Panama by a slow paced tropical paradise with a low cost of living. The government understands that a low cost of living is an important factor for many and the Panamanian government strives to provide that to residents and investors alike through tax incentives and other financial inducements, making Panama one of the top choices for a strong foreign investment.