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04 July 2008
Thoughts on Investing in Panama
Today I’m to writing to you from the beautiful city of Panama, Republic of Panama. I’m looking out over my balcony at ocean, palm trees and skyscrapers, listening to seabirds and honking horns which stand out the regular drone of any big city. It’s one of those hot and humid days, cloudy but not quite raining. Whenever I come here, especially at this time of year, I can’t help but feel a little intrigue and mystery.

Panama is not short of intrigue and mystery (though switching on the AC kind of changes things!) Things are not always quite what they seem here. That’s why instead of quoting official statistics, I’m just going to tell you what I think and feel.

Panama, of course, is not a tailored offshore haven. It doesn’t have any specific IBC or offshore banking legislation. It’s simply a country which was founded and reached where it is now all for business reasons (international trade – the canal) and for its friendly treatment of foreign capital and income. Panama rightly refuses to be grouped together by the OECD with what its government describes as “manufactured tax havens.” Panamanians and foreigners, residents and non-residents, are treated equally. Only locally sourced income is taxable.

Over the last four or five years, what the outside world has really been watching is the real estate boom here. For at least three of those, I’ve been predicting that the bubble will burst, because much of it has been fuelled by speculators trying to flip apartments off plan before they have to put down serious money. Developers and banks are now sensibly discouraging this activity.

But there’s no reason to believe that Panama’s growth will end any time soon. One major influence here is money from wealthy Latin Americans, money that used to go to Florida. Now it comes here. Especially from Venezuela and Colombia. Another influence is retirees from North America and, increasingly, from Europe, attracted by an affordable, tax-free tropical retirement haven with a likely upside in real estate investments.

Getting to Panama is easier than ever, with dozens of direct flights from all of the Americas and now also from Europe. After all, Panama is truly the “hub of the Americas.” I can tell you, the hotels are full. Hotel rates have risen to ridiculous levels (doubled since last year)

As for investing in real estate, I think some speculators will get burned. Those are the ones who come here and don’t know what they are doing. In Panama there is a great deal of freedom, and with that comes the responsibility to watch out for yourself.

In particular, you need to look beyond the market that Panamanian realtors have created for investor-tourists who don’t know local prices. Here in the city, for example, a smart single expat friend of mine bought an apartment for $25,000 a year ago which he is just selling now for $40,000. That’s for the whole apartment, 100% paid cash. Of course it’s just a studio, and it’s not luxury, and it doesn’t have much of a view. But it’s quite liveable, in a respectable building right off Via Espana (the main drag) with a security guard at the front door.

Just down the road developers with glossy brochures are asking the same amount of money as a 10% down payment on an apartment that’s not even built yet. Yes, they are asking $40,000 down payment on a $400,000 apartment.

You won’t find deals like the above on the internet. You’ll find them perhaps in Spanish language newspapers, or better just by finding someone who knows the market to put out the word and help you scout around.

Another good investment in Panama has to be land outside the city. Panama City has a huge traffic problem, and as the city grows it will expand outwards. Only logical. But again, don’t buy it through those high priced realtors with flashy websites. And don’t buy on your first trip down.

Of course I could write a lot more, but space is limited here. Today I’ll be working on the schedule for our Recipes for Success event on the subjects of Freedom, Wealth, Wellbeing and Privacy which will take place here in Panama this November, the week after the US election. The humidity should be gone by then! Although it’s a very internationally oriented event, we’ve specifically included a “Panama day” where you will learn more about this other real estate market in Panama City. Please join us.

Further information on Recipes for Success – Panama 2008 is at http://www.qwealthevents.com.

Look forward to more blog entries about Freedom, Wealth and Privacy. I hope you enjoy them and that you can use the information here to benefit your business and your life. In turn I would much appreciate your feedback, comments and questions. I can be contacted via info@petermacfarlane.net.

Peter Macfarlane is joint editor of The Q Wealth Report an established newsletter dedicated to informing readers about creating, protecting and growing wealth in a secure offshore environment. It also covers international living, banking, retiring and investing. Visit www.QWealthReport.com to see more.

You have been reading an entry on the following blog:

The Q Wealth Report
Peter Macfarlane of The Q Wealth Report blogs on Freedom, Wealth and Privacy





Other recent entries in this blog:

19 November 2008
You Don’t Know Until You Go!
It’s a few weeks since my last blog entry, and the reason for this is that I have been travelling in Latin America with a small group of investors – concerned privacy-minded and freedom loving individuals who are concerned about how our financial and personal freedoms are being gradually eroded. We had an interesting ten day trip starting in Panama City then taking in Paraguay and Brazil.

When I talk about “concerned individuals” what I really mean is that if and when things get worse in the western world – in terms of financial and political restrictions - it’s important to be prepared. An established business or residence presence in one of the more remote corners of the world will be a great fallback or hedging position. Even a second passport or citizenship might be your ultimate goal.

You might be surprised to learn that Paraguay scores highly on all this – a free society, no personal income taxes and an economy that is completely self sufficient with plenty of fresh water and clean, green power. In fact Paraguay is the world’s largest exporter of hydro electricity, and one of the highlights of the trip was a visit to the Itaipu Binacional hydro-electric power plant – the largest in the world, and an incredible feat of engineering and international co-operation. We also visited the spectacular Iguassu Falls, one of the seven wonders of the natural world.

But the most important thing I think we all learned from this trip was the importance, even in this internet age, of actually getting on a plane and seeing things for yourself. We all know the comfort of familiar places and people, but that often also comes with a feeling of frustration, a feeling that we are not in full control of our lives as we should be. On the other side, we all have a natural fear of the unknown. This internal fear is perpetuated by the mainstream media. But by confronting and overcoming it we can open up a whole new world of opportunities.

For example, one of our delegates, a successful UK businessman, said TV and press coverage had led him to believe he would find machete-wielding individuals a mile or two from the financial district of Panama City. But by going there and getting a feel for the place by visiting local and expat-owned internet businesses, he found instead that it’s a great place to do business. Now he is making plans to move his operating base down there instead.

Here at The Q Wealth Report our business for over a decade has been writing about not just how to preserve your assets offshore, but how to create wealth and develop opportunity by actually living offshore. As a famous offshore author once said, “You don’t know until you go.” The instability in the world right now means that you truly need to know about safe places and new opportunities. Right now would be the time to start, and here on lowtax.net you will find a lot of information to begin your quest.

Peter Macfarlane is joint editor of The Q Wealth Report an established newsletter dedicated to informing readers about creating, protecting and growing wealth in a secure offshore environment. It also covers international living, banking, retiring and investing. Visit www.QWealthReport.com to see more.


28 October 2008
Why the Financial Crisis Doesn't Really Matter
Well I needed an attention grabbing headline! Maybe I’m exaggerating a little if I say it doesn’t matter. No disrespect to the many financial services professionals who read this blog. What I really wanted to say, is that it’s time to take a step back and look at the bigger picture. Does it have to matter to you? Do you want it to matter?

For weeks now we’ve been glued to our screens, watching the latest news, share prices, currency rates and so on. In this article I want to suggest a different approach. It took me a long, introspective walk on the beach last week to figure this one out, and now I will run it by you.

It’s easy to get drawn in by mass media hysteria. That’s what happened to me as the bailout plans unfolded. But at the end of the day, why get stressed by things we can do nothing about? Let me restate two facts we all know already:

  • The market is no longer free, nor is there even any pretence of a free market economy. A huge part of the global financial system is now in hands of governments. Apart from the obvious intervention (bailouts) you don’t have to be a conspiracy theorist to see there are lots more political factors playing out behind the scenes. Lots of special interest groups. Lots of infighting.
  • The media is in business to make news. There was a time when reporters reported. Now, they don’t. They take stories from the internet and rewrite them, changing them a little so as not to stand accused of plagiarism.

It would be hard for anyone to dispute these two facts in isolation. The conclusion I draw from these two facts combined is that it is simply not worth participating in the financial markets anymore – not unless you happen to be a central bank, maybe.

What we need to do is concentrate on living. During that walk on the beach, I thought back to some decisions I made years ago. They have stuck with me and served me well ever since. I decided I wanted quality of life – a healthy life with friends and family. Time to do things I believed in, that pleased me. In other words – I wanted to be in control of my life.

That is why, back when I was a business student in London in the early nineties, I didn’t jump on the bandwagon and apply for a job with a big American investment bank. I knew a lot of people who did, and sure they made a lot more money than I did. But their lives didn’t seem to me to be complete. Or maybe it just seemed too much like hard work for me.

That’s why now, I don’t want to be a slave to the TV and the endless market watching sites. If I can’t do anything about it, I might as well look for better things to do with my time.

When times look tough, the Americans talk about ‘heading for the hills.’ I headed for the beach in Latin America, with a few stopovers in European cities on the way. And I’ve never regretted it for a moment.

Now, just in the last few weeks, I’ve talked to a lot of people who have been dreaming for years about a “new life offshore” but now they are really taking concrete steps towards that goal. It is really possible to live better, live healthier, at lower cost, make money using the internet, and – best of all – you can hedge against the effects of the financial markets in a way that you would never achieve with even the most sophisticated derivative!

Maybe now is really the time to do something about it, if you are one of those people. If the financial situation is pressuring you, it could be time for that radical change you have been putting off. Don’t doubt your abilities. Grab your spirit of adventure, stop gambling on rigged markets, and move yourself offshore!

If you are interested in this topic, I’ll be addressing more specifics of how to achieve this in my blog entries here over the coming weeks. I’ll also talk about more recession-proof investments and businesses you can start from scratch – all in a low tax environment of course! No promises as to specific dates, but I will certainly cover this topic more! And if you would like to investigate this through a more in-depth approach (i.e. peek ahead), you can read articles in this vein by myself and others at www.QWealthReport.com

Peter Macfarlane is joint editor of The Q Wealth Report an established newsletter dedicated to informing readers about creating, protecting and growing wealth in a secure offshore environment. It also covers international living, banking, retiring and investing. Visit www.QWealthReport.com to see more.


Latest 25 entries from all other blogs:

14 June 2009
WHO Declares TIEA Pandemic

03 May 2009
Time To Get Out Of Money?

19 April 2009
A Penny For Your Thoughts

05 April 2009
Thank You, Gordon, Now Here's The Money For Your Bus Home

04 April 2009
A New Economic Order

23 March 2009
About Geese And Golden Eggs

22 March 2009
Asset protection, bearer shares and anonymity

08 March 2009
There's No Fool Like A Gold Fool

19 February 2009
Time To Tax The Vegetarians!

15 February 2009
Better The Devil You Know!

03 February 2009
Orwell, You Were Wrong - But Only By 25 Years

18 January 2009
Break Out The Champagne! Bring On The Dancing Girls!

23 November 2008
Please Securitize Me

09 November 2008
A Keynesian Vacancy The IMF Can't Fill

02 November 2008
You Can't Escape; Resistance is Futile

26 October 2008
Is Oil Cheap?

19 October 2008
Tax Harmonization Is Coming!

12 October 2008
How To Commit Collective Financial Suicide

04 October 2008
Thank You, Mr Paulson

22 September 2008
Scam Busters: Second Citizenship and Passport

07 September 2008
EU Defeated By Bean-Counters

05 September 2008
Offshore Banking: Failure to Open a Bank Account

31 August 2008
A New Lord Of Taxation

20 August 2008
Blacklisted Offshore: Private Consultant's Opinion

17 August 2008
Alphabet Soup

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