A few days before the start of the new year, economic projections for next year are positive. The Panamanian economy is expected to grow between 5% and 7.5% over the next year. These are the calculations of experts on the matter and, of course, the government has projected the Gross Domestic Product to grow 6.5% in 2011.
For groups of experts such as the National Competitiveness Center (NCC), the Center for Economic Studies at the Chamber of Commerce, Industries and Agriculture (CEECAM), the Research and Development Group, S. A. (INDESA) and Latin Consulting Group, the growth for next year will be grounded in the transportation sector, as well as telecommunications and trade. Although the outlook is for increased domestic production, Felipe Chapman, the Managing Director of INDESA says that some of the activities may be left behind in domestic production are agriculture, livestock and fisheries. Other indicators such as unemployment and inflation would suffer no major change from the numbers seen in 2010. (La Estrella)
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December2nd
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September20th
Another indicator of a positive economic picture for Panama.
6:35 pm – PANAMA CITY, (Xinhua). “Foreign direct investment (FDI) grew 26% in Panama during the first half of 2010 compared with the same period last year, said on Thursday, Minister of Trade and Industry, Henriquez Roberto.According to the official, during this period, the raising of capital from abroad totaled 1 Billion 44.5 million dollars, a figure that, Henriquez said, demonstrates the confidence that investors remain in Panama in the context of economic recovery world.
The owner of Trade and Industry said that the Panamanian government is working to create favorable conditions to attract FDI and improve competitiveness, offering investors an attractive business climate.
The minister explained that, among the instruments that promote the attraction of foreign capital, are the agenda of international promotion, attracting investments, the Law of multinational companies and special economic zones.
Recently, the World Economic Forum (World Economic Forum) admitted to Panama as the second most competitive nation in Latin America, after Chile, who occupies the first place.
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September10th
Thus far this year through August 2010, the Panamanian government has approved a total of 6,478 work permits for foreigners, representing an increase of 1,074 compared to the same period of time in 2009, according to the Ministry of Labor and Workforce Development (MITRADEL). Meanwhile, a total of 8,020 applications were process, up from 6,157 reported last year. Of these, most of the applications come from Colombian, Chinese, and Venezuelan citizens. “This is a direct reflection of the foreign investment that is taking place in Panama,” said Adolfo Linares, the former president of the Chamber of Commerce, Industry and Agriculture of Panama (CCIAP). He added the phenomenon may be due to many factors, including the project to expand the Panama Canal, and many multinational companies are establishing new offices in Panama, in addition to the normal activities and banks, among others.
Although the report from the Department of Statistics of the MITRADEL does not reflect the amount of their wages, Linares said it can be medium to high, as companies usually tend to bring their high ranking executives. Of the permits approved by the MITRADEL, 1,655 correspond to the 10% category. That is to say, foreign companies operating in Panama are only allowed to hire a maximum of 10% of foreign labor.Meanwhile, the highest number of approvals relate to foreign nationals who are married to a Panamanian citizen (2,244), followed by indefinite permissions (1,262), and 519 under the Marackesh agreement, among others.
For his part, Juan Cabareda, a Venezuelan, said the main advantage of working in Panama is the economic stability, due to the currency, as well as the low inflation in the country, which means he can buy more with the money earned. “In Venezuela, the minimum wage is not enough for anything, instead here the money goes farther for things such as food and housing, the cars are cheaper, and the only thing that is more expensive is gasoline,” he said.
The Center for Economic Studies of the CCIAP explained that some companies hire foreign workers with the intention of bringing knowledge to meet needs for specific skills, highlighting some sectors such as trade, services, high technology and others. (Panama America)
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September10th
7:00 pm – PANAMA (Xinhua). “The Minister of Commerce and Industry of Panama, Roberto Henriquez, received on Thursday, welcomed the appointment of his country as the second most competitive in Latin America in the ranking of the Global Competitiveness Index.
Henriquez said the new position of Panama, where he advanced from 59th position the 53 globally, in the latest Global Competitiveness Report 2010-2011 prepared by the World Economic Forum (WEF) and presented in the city of Beijing, China.
According to Minister of Panama, the improvement of his country’s position is due to the implementation of the Government Strategic Plan focused on improving the quality of infrastructure and strengthening of the trading platform.
“For the first time, Panama had one of the biggest leaps in competitiveness at the regional level in the last year,” he said.
The head of the Trade portfolio also highlighted the advances in technology absorption, knowledge transfer and on Foreign Direct Investment (FDI).
During the first quarter of 2010, FDI reached $ 600 million, doubling the figures for the same period last year, when it managed to attract 300 million.
Panama also climbed 18 positions on the pillar of availability and technological penetration, resulting in better service platform for business.
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August26th
The National Institute of Statistics and Census (INEC) recently published an economic growth in Panama of 4.9% in the first quarter of 2010.
The INEC attributes this strong growth to activities related to the domestic economy such as mining and quarrying, construction, thermal power generation, transmission and distribution of electricity, trade, hotels and restaurants, telecommunications, port operations, air transport, insurance and financial auxiliaries, homeownership, private education and other community activities, social and personal services such as radio, television and other entertainment, as well as also a lesser extent growth in manufacturing, financial intermediation and the general government.
INEC’s report also notes that the activities directed to the outside world, showed a decrease, the cultivation of various fruits, fishing, wholesale trade in the Free Zone of Colon and Panama Canal operations.
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August26th
New Tax Laws
Posted in:
With the enactment of Law No.8 of 2010, new rates will take effect on income tax for both legal entities and for individuals. Note that the application of these rates is retroactive, so their entry into force is from January 1, 2010. In addition, it includes tariff changes regarding ITBMS (similar to the VAT), ISC and Stamps, which take effect from July 1, 2010.
Income Tax – Juridical Persons
For telecommunications companies established in the country, their net income arising from international telecommunication services are deemed local income.
Included as local income is income from freight, charges, fares, cargo and other services rendered by international shipping companies whose origin or final destination is Panama, except where such income results from freight, charges, fares and services for passengers or cargo that are transiting, and companies that operate cruise ships that have their base or home port in the Republic of Panama.
Excluded from the concept of local income is the distribution of dividends or interests in companies that do not require a Notice of Operations or those not generating taxable income in Panama.New General Rates
For fiscal year 2010 (January to December) the income tax rate will be 27.5%. For subsequent years, the rate will be 25%.
New Special Rates
Companies engaging in the following activities shall pay income tax based on the 30% rate through 2011, 27.5% from 2012 to 2013 and 25% from 2014 onwards, to wit: power generation and distribution, telecommunication services in general, insurance and reinsurance activities, financing activities regulated under Act 42 of 2001, cement manufacture, the operation and management of games of chance and gambling, mining in general and the banking business in Panama.
As for juridical persons whose income exceeds one million five hundred thousand dollars (B/.1, 500,000.00), they shall calculate based on the method that is higher between the application of the respective rate to their taxable income or 4.67% applicable to their total taxable income.Special Regimes
Disposal/Sale of real estate: Regular Dispatch of BusinessFor the disposal of immovable property which is part of the ordinary course or dispatch of business, the income tax will be calculated at a definitive rate of 3.75%.
Logistics and other operations in the Colon Free Zone and other zones
In the case of businesses established in any free trade area, the disposal, sale or transfer of immovable property or the rendering of services are subject to the rates provided for in Articles 699 and 700 of the Fiscal Code. However, logistics, storage and wine cellar operations, as well as the internal movements of goods and cargo, billing services, repacking and similar activities that are directly related international, are considered to be foreign or export operations.
Interest and commissions remitted abroad by way of loans or financing will be taxed at the general rate set forth in Articles 699 and 700 of the Fiscal Code, over 50% of the amount paid or credited.
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