Panama Pushes Technology

Government efforts to use technology and lure investors spur boom.

BY ERIC SABO

PANAMA CITY – Panama seeks to remainLatin America’s technology leader by expanding Internet use and drawing in companies to transform the capital into a logistics hub.

The Central American nation replaced Uruguayas having the highest technology level in the region, fueled by a surge of Internet users and computer sales, according to the sixth annualLatin Technology Index from Latin Business Chronicle.

Internet penetration in Panama was up 43 percent and personal computer sales jumped 21 percent, the data show. The index uses 2010 technology data from the International Telecommunications Union, Computer Industry Almanac and the Santiago Chamber of Commerce and population data from the International Monetary Fund and the Population Reference Bureau.

Eduardo Jaen, who heads Panama’s National Authority for Government Innovation, attributes the rise to government support for Internet access and success at luring new businesses into the modern capital. More than 60 corporations, including tech giants Dell and 3M, shifted regional headquarters to Panama since a tax exemption law was passed in 2007.

“There’s a broad array of companies that have decided to position themselves here and use Panama as a hub,” Jean says. “We intend be ahead of Uruguay for years to come.”

President Ricardo Martinelli has made “closing the digital gap” a key priority of his administration. Having established hundreds of free Internet hot spots around the country, the government will start offering discount loans to help workers buy a computer. About 21 percent of Panamanians currently have at least one computer at home, according to 2010 census data.

Martinelli’s administration began offering free computers and Internet access in schools, which helped movePanama up one notch on a separate technology index comprised by the World Economic Forum.

Even so, much of the Internet growth is driven by multinational corporations and small start-ups that move toPanama because of lower tax rates and cheaper operating costs.

Panama eased requirements for starting a business in 2007, and some 35,000 individuals and legal entities have since registered as a Panamanian company online, according to government figures. Among those are a growing number of young American web developers and movie production crews that are demanding faster Internet.

Roman Kogan, who runs Internet service provider PaNetma, says that his business has grown 150 percent from last year.

“You can get cheap Internet anywhere, but you can’t run a business if it’s slow or unreliable,” says Kogan, whose company offers connection speeds up to twice as fast as Cable Onda and Cable & Wireless, Panama’s two largest providers.

He blames a lack of competition for Internet costs that are higher in Panama than in the United States.

“It’s about 20 times more expensive to get a signal connection from Miami to Panama than it is from Californiato Japan,” Kogan says.

Still, Panama’s Internet rates are competitive with other Latin American countries and many find they can save money while running a successful business out of the endless sky rise buildings that pop up in Panama City.

“The Internet here is quite reliable and fast enough,” says Jesse Schoberg, who moved his web development company, LJ Host, from Madison, Wisconsin to Panama in 2009. Rent, food and basic living expenses are all less than in his home state.

Meanwhile, wireless networks connected by BlackBerries and iPhones allow him to keep working on remote beaches and in the mountains, he added.

“You have the perfect storm for Internet entrepreneurs who want a high quality of life,” says Schoberg.

Internet penetration and computer sales are expected to climb as Panama’s economic growth outpaces the region. Backed by an expansion of the Panama Canal, finance officials predict at least 9 percent growth this year.

The boom has caused an envious problem: too many companies are understaffed. While unemployment hovers above 9 percent in the U.S., Panama’s is 5.4 percent, leaving banks and other industries that rely on technology without enough workers. Officials say they are looking at ways to attract foreign skilled labor, which should propel further Internet use and computer sales.

While Panama’s Internet is up to speed now, the basic tech infrastructure needs improvement to handle more online traffic, said Mario Ernesto of Solusoft, a Panama-based company that is advising the government how to convert paper records to digital formats.

It will need to improve fast. Martinelli is investing heavily in construction to fuel growth, more companies are moving in, and hotels including the Trump Ocean Club and Hard Rock are opening their doors to tourists who want to check email.

“We are advancing,” says Jean of Panama’s technology agency. “The government is committed to growth.”

© Copyright Latin Business Chronicle

Vice Minister of Trade, Jose Domingo Arias projected that Foreign Direct Investment (FDI) will reach $2 billion in 2011. The FDI in 2010 was $1.7 billion by the third trimester, a 12% increase compared to the same time in 2009. The growth is partly influenced by the investment grade ranking awarded to Panama by Standard & Poors and other such agencies in 2010.

Additionally growth is expected from tourism revenue in 2011.

Tourism in Panama grew 6% in 2010, a considerable increase of 2009 which experienced tourism growth of only 2%, according to Panama’s local daily newspaper La Prensa.

Data collected so far, although not officially released indicates visitors to Panama in 2010 were 1.7 million and will increase to at least 1.9 million in 2011. For the tourism industry along with local business owners and entrepreneurs alike, this is good news.

Panama’s airline, Copa Airlines has helped Panam’s growth as a hub and helped Tocumen International become known as the “Hub of the Americas”.

The tourism authority has been consciously lobbying airlines from around the world to establish flights to Panama.

Qantas, Emirates, Flydubai and All Nipon are Airlines interested in establishing flights to Panama in the near future. Presently direct flights to Panama City are available from Curacao, Madrid and Frankfurt.

In its fifth year of contributing to Panama’s growth, is the expansion of the Panama Canal, which is estimated at $5 billion.

Other projects include a 13-kilometer metro line. The metro line, Panama City’s first will cost $1.3 billion and is currently in the design phase. The projects Environmental Impact Study was on December 15^th of 2010 at Istmo University in Panama City.

Construction of the first line is scheduled to begin later this year, and the entire city is projected to be connected by a network of metro lines by year 2035.

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(If you go, please tell them you were referred by Do Business In Panama.)

Please be advised that due to the unfortunate death of the Ex President Guillermo Endara Galimany last night the government has decreed a day of National Mourning for Wednesday September 30, 2009. In this sense, all public and private offices and banks in Panama will be closed for business on that day.

We will be back to work on Thursday.

Estimados Clientes y Colaboradores,

Debido al sensible fallecimiento ayer en la noche de nuestro Ex Presidente Guillermo Endara Galimany el gobierno ha decretado para el día Miércoles 30 de Septiembre como un Día de Duelo Nacional. En este sentido, todas las oficinas públicas y privadas estarán cerradas durante el día de Miércoles.

Nuestras oficinas volverán a abrir el día Jueves.

Tomorrow, the whole of Panama will be back to work. The last few days everything has been closed for Carnival. Panama has some of the world’s most impressive carnival celebrations, world famous alongside Trinidad and Tobago, and of course Brazil!

Following on from our article last month Panama Real Estate – Where Next? we had quite a bit of feedback when we wrote about apartments for sale in the local market for $15,000 – $20,000. Low cost, good value housing for locals is always a good investment. We were talking then about cheap or low cost apartments in Panama City. Another option, however, is to buy land for investment in Panama – what about this piece of beachfront property in Panama, near the Colombian border, for example?

We also found on a newsfeed the following article on Panama Real Estate Investing posted by “Panama Guide” at Panama News Briefs. More specifically, it’s about investing in real estate in Panama during the current financial crisis, and we thought warranted reproducing here.

The world is in financial crisis, globally speaking real estate markets are in decline, no banks are lending money for consumers to buy houses with, and chances are there has never been a worse time in our recorded history to buy property – and yet, in our opinion there are still at least 5 good reasons to buy property in Panama!

You may have read the hype that the boom is continuing and that every property that’s for sale in Panama is a sound investment bet – well, that’s not entirely true.  But neither is the negative hype about the market being saturated with greedy speculators and that Panama is heading for an almighty crash.

There are 5 very sound and solid reasons why property in this stunning Central American nation is a good bet for long-term investors, holiday home seekers or even retirees and early retirees…

1) Tourism is Increasing in Panama

Panama is a first world nation offering the associated comforts, and at the same time it is an ‘undiscovered’ gem of a nation where it’s possible to get truly away from the madding crowd and discover hidden coves and beaches, stunning rainforests, amazing flora and fauna, unaffected people and communities steeped in history and culture.  In other words, Panama has something for everyone – and it’s cheap too, relatively speaking!  All of these are reasons why the country has been welcoming increased numbers of tourists year on year – in fact, it has welcomed a 12% increase annually since 2004.

Hotel occupancy rates are exceptionally high, new airline routes are opening up bringing travellers direct from nations such as Italy and the Netherlands for example, and the government in Panama is continuing to plough substantial funds into the promotion of the nation internationally.

All this bodes very well for anyone who is interested in buying property in a country with a healthy and affluent outlook for the long-term.  It means that desirable homes will make good rental properties, and that as more people arrive and learn about the delights of Panama, so more people will think over the long-term about relocating to live there – thus giving a property owner an exit strategy.

2) Desirability of Panama and its Property Product

Panama has it all – from a bustling and cosmopolitan capital city to tiny rural enclaves, from high rise luxurious real estate, to beach huts and fabulous fincas.  Therefore, yet again there is something of appeal to everyone.  So whether you want to live on the coast and be a beach-bum or you want to live the high life in Panama City, you can when you choose the right type of home for you in Panama.  This makes the nation a great choice for anyone thinking about moving abroad – because you can likely find your perfect home in this one nation – no matter what it is you’re looking for in a property!

3) Property in Panama Can be Competitively Priced

Because the really booming times in Panama’s recent history are currently over, there are many speculators keen to exit the market and consolidate their debts, there are developers doing their best to off-load already constructed stock, and there are private vendors willing to accept below asking price offers for property.  What’s more, away from the glitzy, modern high-rise property market in Panama City, most real estate in Panama is sold on a more personal basis.  You’ll find that those who are selling a family home for example, are far less likely to want to sell to an anonymous buyer from abroad and far happier to sell to you if you befriend them, enter into direct negotiations with them and remain calm, open and friendly throughout.  These sorts of vendors would rather sell to you for a lower sum if you take this approach, than they would to an overseas buyer they have never met who is dealing with a slick real estate agent and offering them their asking price!

In other words, Panama is a market where there is a lot of room for movement when it comes to asking prices – no matter which approach you take and which properties you’re looking at.  And it’s also a market with some exceptional bargains.
4) Long-term Potential for Profit

Panama’s canal extension project is on track, tourism numbers are consistently rising well, the government and business environment are stable, fiscally speaking Panama is affluent and successful, the ‘pensionado’ scheme attracts more wealthy ‘retirees’ annually and the real estate market’s transparency is improving.  These are all very good reasons why Panama has exceptionally good long-term potential in terms of its property investment prospects.  Whilst things are looking less favourable at the moment due to the current state of the global financial market, those who look to the long-term and take anything but a speculators approach to the market stand to reap the rewards eventually.
5) Living the International Life

The final reason why we feel that property in Panama is a good bet is simply because the lifestyle available in Panama is fabulous!  It’s once again the case where you can get what you want from life – so, if your idea of heaven is shopping in glitzy boutiques, working in the City, dining out in posh restaurants and living in luxury – you can have that lifestyle in Panama City.  Or, if you prefer the thought of living in a friendly expat community close to the sea and with wonderful views and a very laid back pace of life, this type of lifestyle is also possible.  Alternatively, those who want to get away from it all or who want to live on the beach, in the mountains or perhaps in the local community can also find a property that will give them the lifestyle they want.

Hopefully this article has demonstrated that property in Panama can be a solid investment purchase, a lifestyle home choice or just a great buy for long-term potential appreciation…and that you can find whatever it is you’re looking for in Panama.

We hope so too. Be sure to use our Contact Form to reach us fastest for any questions you have about Panama business, investing, corporations, offshore banking or real estate. Our business is to help you do business in Panama!

What does this mean for you personally? Do you have a plan?

Are your finances and savings at risk? Or are you going to be one of those who comes out of the crisis not just unscathed but with big profits?

Defining success is tricky business. If you don’t already have a detailed road map for the coming years, the time to start thinking about it is right now. You need to talk it through likeminded, free thinking individuals, and experts who have dedicated their lives to the concepts of personal freedom, financial freedom and privacy.

I won’t beat about the bush. I think the solution for you is to come to Panama next month and sit down with members of The Q Experts Panel. In a luxury resort, in a pampering atmosphere behind closed doors, you will participate in high level discussions that will cut through the lies in the mass media.

We planned this event some months ago for the week after the elections, and recent events have shown that we could not have timed it better. Things may be looking bad now, but they are set to get a lot worse before they get better.

The reason for writing to you today is that I consider this event so useful and so essential for Q Wealth readers, that we have decided to extend the early bird discount to anyone who signs up before next Friday. That means for just $3,497 per couple (instead of the normal price of $5000), you will get a working week full of expert advice in a small group tailored to your situation. There is a further discount for singles and for VIP members. . You will get to meet at least 4 members of the Q Experts Panel, and we expect to have 2 more pending final confirmation.

I’ve been to quite a number of events like this over the years and every one is different. The one thing they all have in common is that, besides the regular program that you can read about at www.qwealthevents.com, everybody gets substantial fringe benefits out of these events. In my view, these fringe benefits are probably the most valuable aspect of the whole event. It’s sometimes hard to express this in words, because I just don’t know what will happen. That is the fun of putting a group of free thinking individuals into a melting pot for a week! There is just no way to put a monetary value on participating in this.

I just cannot tell you what it will be this time, but believe me the people you meet might be a little offbeat but they are the best brains in the business. They are people who really understand the geopolitical situation, economics, wealth psychology and real health. Some of them are TV presenters. Others are very private people who rarely appear in public. That is why the event is by invitation only and we won’t tell you exactly where it is until you sign up. We are not inviting Big Brother!

You will meet people with practical experience who have been there, done that. Just one idea, tip or inspiration could make you hundreds of times the investment involved in attending. You can invite these people aside for a coffee or a cold beer and sit down to chat with them informally about your own ideas and plans, and get feedback from different experts as you formulate your own personal plan.

One thing I feel is very important to point out is that this is a small group. You will get to know everybody on first name terms and make new friends – individuals who think like you. This is a world apart from mass market “offshore” seminars in Panama where you will just meet people who are trying to sell you something – be it real estate, offshore structures or rare stamp collections as investments.

This could be the right opportunity for you that is coming along at just the right time. That is the reason for this special bulletin. You’ve probably already read about this event but maybe you have not thought seriously about attending.

We didn’t just choose Panama at random. For one thing, it’s easy to get to. Plenty of direct flights from the Americas, and from Amsterdam and Madrid. Another thing, it’s a business friendly offshore and retirement haven. You’ll see how the Panamanian real estate bubble is bursting, and how there are great opportunities there too. You’ll have the chance to visit brokerage houses, banks and credit card providers and open accounts there on the spot if you wish.

Some people are cutting back on spending at the moment. They should be! But now is not the time to cut back on essential things. This is not a holiday or excursion. It is an investment in yourself, that should pay high returns over the coming years. Your life is your responsibility, not the kind of thing that comes with guarantees. Once you acquire this unique knowledge and experience, it is up to you to do something with it. But we will help you make concrete plans, goals and strategies for this.

How can you sign up for this event and qualify for the discount? Either go to www.qwealthevents.com and sign up online, or email me direct (info@petermacfarlane.net) or call our co-coordinator Dana Parkinson today. Call our London office at +44 20 7855 2563 or toll free from the US and Canada at 1-800-583-1637. If you have any questions before signing up, don’t hesitate to call.

This Special Offer closes definitively at close of business London time on Friday 17th. We need this cut-off time to make accommodation arrangements. Don’t miss out – sign up today!