Panama is changing its tax code in a move designed to boost property investment in the country.
A cabinet report revealed that the green light was given last month to a bill which will amend the country’s tax codes to establish an incentive for real estate investment firms. The Minister of Economy and Finance will now submit the rule to the National Assembly for approval with the aim to make the country more welcoming to potential investors, reports Newsroom Panama .
The decision has been inspired by similar tax regimes in countries such as the US, Spain and Costa Rica, where investors are offered direct exposure to the housing market. The new tax codes, if approved, will offer liquidity and transparency to buyers, while also encouraging alternatives for fundraising for real estate activities, rather than the current system, which relies upon bank lending.
The proposals arrive as the country carries out a major expansion to the Panama Canal, which is attracting investors to the area. At the same, Panama’s tourism industry has also grown, with the number of hotel rooms in the country rocketing from 1,400 in 1997 to more than 15,000 now, according to STR Global. Indeed, 2.1 million tourists visited Panama in 2012, a number that is already expected to increase by 10 per cent this year.