The Republic of Panama is consistently near the top of the list of countries with the best access to capital. The latest Milken Institute ‘Capital Access Index” published in 2008 looked at one hundred twenty-two countries worldwide. The Researchers gathered information from seven essential elements that facilitate access to capital. These extremely smart people then used 56 different variables drawn from these sectors to generate the index. The maximum index achieved was Canada (7.90). Panama’s index was 5.56, which ranked it in 38th position, placing it ahead of all of the BRIC economies.

This result should not surprise anyone. The Republic of Panama is a great place to do business, just as it has been for decades. I live here and I have the experience of doing business here every day. It’s a wonderful experience. This is a nation that does business on an international scale and accommodates the wants and needs of international businessmen. Panama has always respected the entrepreneur and the go-getter. Great places to do business attract investors who want to do business there. I know that sentence sounds like circular logic, but self-reinforcing phenomena often seem that way.

Panama has also been consistently ranked amongst the world’s freest economies with an open door policy for foreign investment that provides important incentives to business. In 2007, Panama attracted $6.2 billion in foreign direct investment… from the U.S. alone, says the Office of U.S. Trade Representative. Enactment of Law 41 in August of 2007 has made investment in Panama an even more attractive proposition. Through the first quarter of 2008, 15 companies had taken advantage of the benefits offered under Law 41. I see no reason why this trend would not continue.

The success of Panama as a place to do business is no accident. All the key elements are here – A stable constitutional government, an economy based on the U.S. dollar, low inflation, no foreign exchange restrictions, equal treatment of foreign and local citizens, and a favorable tax system. The workforce is literate (91.9% literacy) and largely bilingual / multilingual.

Panama has Free Trade Agreements with the United States, Europe, Asia and Latin America countries, and is a member of the World Trade Organization (WTO). Panama is active in the Caribbean Basin Initiative. The Economic Commission for Latin America and the Caribbean, the Organization of American States, and the Interamerican Development Bank have given Panama positive ratings. Panamanian government bonds are consistently graded B+ or higher by Standard & Poors ratings service.

The Republic of Panama does not simply rely on its strategic location, privacy haven reputation, and low cost of living to attract foreign investment. While the various political parties have their differences, they all recognize the goose that laid the golden egg is business. The Colon Free Zone and City of Knowledge initiatives, as well as Law 41, are major efforts to ensure that corporations of all sizes will find Panama an attractive place to do business for many more years into the future.

In Panama I have found personal freedom, wealth protection, and privacy.  These things are not separate pieces but are all part of the fabric of the Panamanian way of life.  Any one of these without the other two is useless.  If I were to try to talk to you about one of these without talking about the other two, I couldn’t do it. So, trying to break each element out and write a paragraph on it simply wouldn’t work.  I will just write from the heart, and if it wanders a little, I apologize.

The Republic of Panama is a great place to do business, and with a little planning your business can operate on a tax free basis.  It is a great place to live and I enjoy living here.  The national capital, Panama City, is inexpensive when compared to other cities of the same caliber.  A building boom over the past few years has kept prices down by increasing the supply of new real estate.  Don’t be fooled – inexpensive doesn’t mean that you sacrifice your quality of life.  This is a city, and a nation, that does business on an international scale and accommodates the wants and needs of international businessmen.  For example, Copa Airlines flies modern Boeing 737’s to 40 major cities daily and was named Best Airline in Central America in 4 of the last 5 years.

Despite this international bent, Panama manages to keep its charm.  You can find both a trendy sushi dinner for $100 per head with quality that would please Gordon Ramsey, and a simple Mom and Pop restaurant offering scrumptious tapas and a good local beer for $5.  You have an amazing range of choices and the freedom of choice; freedom that extends far beyond dining.

Panama stands out as a tax haven and financial hub. Because of the Canal trade, Panama has well developed international trade and banking systems.  These two sectors depend on technology.  So, Panama has invested in creating one of the finest telecom and internet systems outside of Europe or the U.S.  Internet banking, credit/debit card services, and credit facilities are as readily available as they are in the U.S and Europe.  You can link your corporate credit card directly to your Panamanian bank. Panama does not have its own currency – it trades in the U.S. dollar – and there are no currency controls or restrictions.
When Noriega’s ‘friends’ operated the banks, they had a poor record of customer service.  They didn’t have to care.  When the markets opened to competition, banking services got much better. Domestic banks such as Multibank compete with international banks like HSBC in the local market, and both are trying to take market share from expatriate-oriented banks like Credicorp.

Panama banking privacy is good, and the law still allows offshore corporations with bearer shares.  The ability of non-residents to own bank accounts, Panama Corporations (IBCs), Private Interest Foundations and other similar tools make for a business-friendly environment.

The government has no reason to keep the residents under surveillance.  As an international banking center, if it tried to do that, there would be capital flight.  That would wreck the economy.  The new President, Ricardo Martinelli, who is in office until June 2014, promised to root out corruption.  Domestic spying is not on his agenda. Lord Acton said “Power corrupts; Absolute power corrupts absolutely.” The Panamanian government has power, but not absolute power.  The fact is it doesn’t have the ‘need,’ the financial resources, or the political capital necessary to spy on residents.  Not even dictator Noriega spied on the citizenry.

The success of Panama as a place to do business is no accident. A temperate climate, great beaches, convenient travel, and tax free status make it an absolutely alluring place to live.

Foreign investment is something the Panamanian government has always encouraged.    Foreign investment in Panama is easier now than it has ever been.  There is a new free trade agreement with the U.S., and a new domestic policy, Law 41 (2007), is designed specifically to reward multinational corporations, both large and small, for establishing regional headquarters here.  Now is a great time to consider the opportunities in Panama.

Many foreign investors starting a business in Panama or purchasing real estate decide to use a corporate entity as an ownership vehicle.  The specific corporate form is defined during the due diligence phase, and the corporation should be established in conjunction with the project and not as a separate consideration.  The corporate ownership vehicle offers privacy and allows flexibility in estate planning, tax management, asset protection, and representation.

Should an investor use (or form) a local Panama corporate entity, or use an existing foreign corporation? The answer is “it depends,” but in most cases, the use of a local entity creates more benefits.   If you use a foreign entity, make sure to register it in the Public Registery.  Although Law 41 has streamlined the procedures for registration of foreign entities, it could still take several weeks to complete the process.

Panamanian commercial law allows many corporate forms.  Two important forms that offer the investor structures similar to the familiar limited liability company are the “Sociedad de Responsabilidad Limitada” and the “Sociedad Anónima.”   Determining which of the many forms is the correct choice is part of your due diligence efforts, but these are the two most prevalent forms with the S.A. as the preferred vehicle.

The S.A. has many features which offer privacy.  Some of the more important features are: no requirements to disclose ownership; no restrictions on owning investments outside of Panama; no restrictions concerning ownership of shares; no residence requirements for Directors/Officers; no requirements to file annual Financial Statements; no requirement to hold annual General Meetings of Shareholders or Directors.  This feature is very important – the accounting books for the corporation can be kept in any part of the world and in any language.

Entities doing business within Panama must register with the Tax Authority.  Formal tax registration is not needed if the corporation simply holds real estate, or does not generate taxable income within the territory of Panama. “Within” means any transaction that is from a location in Panama to another location in Panama.  Anything that crosses a border is a non-taxable transaction.  Directing transactions in other countries from Panama is non-taxable.

Every corporation must reside in Panama or have a local registered agent.  There is an annual registration fee paid to maintain a valid registration at the Public Registry of Panama.  The fees and taxes are quite reasonable, but must be paid promptly. Late payment can produce penalties or cause the company to be stricken from the Register.

A corporation may adopt by-laws for the regulation of its internal affairs and procedures, but adoption is not mandatory. If by-laws are adopted, they can be registered at the discretion of the directors of the corporation.  Registration of by-laws is not mandatory, but if the directors decide to register the by-laws, any amendments to the by-laws must be registered as well. For privacy and convenience, we recommend against the registration option.

We can assist you in the formation of the correct entity, or with entity management as needs may arise.  We are based in Panama City, but it is not necessary that you come to our offices, ever, unless you want to stop in for coffee.  The usual procedure is that we act according to the information you furnish us.   You can send the information by fax, e-mail, or regular postal mail, whichever you prefer. We will organize the articles of incorporation using a standard format. Normally within 10-15 days, all the pertinent documents will be returned to you.  For immediate delivery, we also have Shelf or Ready Made Companies.

When someone thinks of Panama, the first two things that come to mind are the Canal and ‘tax haven’ – usually in that order.  Yes, there is a huge canal here.  Yes, the Republic of Panama is a ‘privacy haven.’  But, that’s NOT all there is to Panama.

There are many other advantages to doing business here.  Panama’s location made it a strategic transportation link in the Spanish Empire’s effort to ship gold and resources to Madrid.  Panama, and Panama City, were established from the very beginning for the purpose of doing business on a global scale.  That heritage remains.  And despite being a modern city, Panama City has managed to retain its charm and ease of living.

A building boom over the past few years has kept prices down.  Panama City is inexpensive when compared to other cities of the same caliber.  Don’t be fooled – inexpensive doesn’t mean that you sacrifice your quality of life.  Panama does business on an international scale and accommodates the wants and needs of international businessmen, who tend to be fast-paced.  At the same, Panama offers beautiful beaches, a temperate climate, great restaurants.  High quality downtime; a little bit of ‘la dolce vita.’  What good is working hard, and what good are wealth protection strategies, if you don’t take the time to savor the fruits of your wealth?  You have an amazing range of choices here and the freedom of choice.

The government is stable and has a new President, Ricardo Martinelli, elected on an anti-corruption platform.  Martinelli, who will be in office until 2014, is a businessman, so the pro-business attitudes will remain.  Even in the worst of times, Panama has never suppressed its citizens or instituted currency controls.  There were periods of corruption, but there has never been oppression.  Panama has its own currency, but the U.S. dollar is the business currency.

Panama has well developed international trade and banking systems.  These two sectors depend on technology.  Panama has one of the finest telecom systems outside of the U.S. or Europe.  Five major global fiber optic networks cross Panama and provide international access.  Panama City, which is overlaid with several fiber optic networks, is a world-class mission-critical data and hosting center. This business segment continues to grow as foreign companies take advantage of this infrastructure.  Panama is a gateway to Central and South American markets.

Panamanian leaders recognized that the same strategic location that made it an important water transport link also gave it a competitive advantage in air transportation and logistics.  One of the best things about doing business here is the ease and comfort of travel.  Panama City is a great place to live and I enjoy living here, but sometimes travel is necessary.

The national air carrier, Copa Airlines, flies Boeing 737’s to 40 major cities daily and was named Best Airline in Central America in 4 of the last 5 years.  Copa has an outstanding order to purchase 21 new jets over the coming years.  Over the last decade, Tocumen International Airport has been transformed through the ‘Hub of the Americas’ project.  Copa’s partner KLM-Air France flies direct from Amsterdam, complementing Iberian Airway’s daily flights from Madrid.  Tocumen Airport is a great airport if you are coming here to do business, or if you are just looking for convenient connecting flights within the region.
Undoubtedly, Panama is a great base for business and banking, and for gracious expatriate living.  And with a little planning, that gracious living, la dolce vita, can be tax free.

The international press keeps reporting that the global banking crisis is global. That seems like truth, but they are giving you incorrect information. Although the crisis that began in the American banking sector has spread across the globe, and has hit most major banking centers it has not hit the banks in Mongolia. Nor has it hit the banks in the Republic of Panama. In the case of Mongolia, there are no close ties to the global economy. This means there is no exposure to the toxic assets that flood the global system. In the case of Panama, with its close ties to the global economy, it must be “luck.”

More than 100 American banks have been closed by regulators between 1 January and 15 October 2009; another 400 banks have bad assets in excess of net assets and are teetering. They have not been closed because the FDIC is woefully underfunded and can not ensure the deposits represented by these banks. Otherwise, they would be gone. Smart Americans are looking for a safe place to put their money, and quickly.

So it appears that the Mongolian banking system is going to see huge influx of American money seeking safe haven… But let’s take a look at Panamanian “luck” first. The banks in Panama have not suffered in this crisis for precisely the same reason that Mongolian Banks have not suffered, no exposure. No exposure to the greed that permeated the global banking system; no exposure to ridiculous Ponzi schemes; no exposure to borrowers who had absolutely no ability to make good; no exposure to borrowers who had no ‘skin’ in the game.

Understand that Panama has no central bank to act as a lender of last resort.  Since there is no one to “bail them out,” Panama banks are still conservative in their approach to business. They create only safe, well-collateralized, properly documented loans. The financially deadly concepts of subprime mortgages, 10% down, 5% down or even No Money down loans, and NINJA (No Income, No Job or Assets) loans are concepts that do not exist here. Panama banks still require a 25% down payment from Panamanian residents and 30% from non-residents. They simply have not created for themselves the same types of risks that are causing the global financial problems.

That’s not to say that these good outcomes were strictly the result of market action and corporate prudence. Panama’s National Banking Commission ensures depositor safety. Monthly audits detect problems before they get out of hand.  The NBC is empowered to deal with potential problems and to direct banks actions to remedy any situations. Banking superintendent, Olegario Barrelier, told Reuters “At the moment our banks are good, very good. They are healthy, they are liquid, capital is nearly double what is required. They are being financed by local deposits and are not dependent on external financial markets.” He said the global crisis would eventually slow Panama’s economy rather than create havoc in the financial system.

Panama uses the U.S. dollar; there are no exchange controls to prevent the ready flow of monies into or out of the country; there is a stable government; the Canal and the Colon Free Trade Zone encourage free trade. Panama has a top notch telecommunications system, an excellent legal framework that allows 100% foreign owned investments, and a strategic location with access to the entire western hemisphere.

Mongolia or Panama? Panama is obviously the correct choice.

And “luck” didn’t have a thing to do with it.

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!