Panama’s already red hot tourism sector just got a major shot in the arm. Legislators here approved new concessions that provide tourism related businesses with some of the most lucrative tax concessions ever granted in Latin America or the Caribbean.

Panama’s first initiative aimed at boosting tourism was called Law Number 8. This legislation provided ventures like hotels, receptive tour operators, transport, restaurants, tourism centers, nightclubs, theme parks, zoos, convention centers, marina complexes, and other businesses located within tourist development zones with 20 year exemptions from the payment of import taxes on the materials, furniture, equipment, and vehicles needed to develop and operate their businesses. Qualified ventures also received an exemption from real estate taxes on property used in the conduct of their businesses, as well as tax free use of government owned airports and piers. Just to round things out, Law 8 also allows approved businesses to accelerate the depreciation of real estate assets by as much as 10% per year.

More recently, Panama’s tourism industry received another big boost with the passage of a Decree that provides an outright exemption on all income earned from the operation of approved projects built within specified “Tourism Zones”. To qualify, projects must be approved by IPAT (The Panama Institute for Tourism). Once this is accomplished, investors can pocket 100% of their earnings for a whopping 15 years!

To say that Law Number #8 and other efforts by the Panamanian government have been a success would be an understatement . Since its passage, tourism giants like Intercontinental, Marriott, Radisson, Sheraton, and Holiday Inn have set up shop here, and more are on the way.

If your plans include developing a tourism related business in Panama, make sure to position yourself in a tax positive way. To do this, you will need help from a competent local attorney. To insure that you choose the right one, make sure to contact one of the many third party sources able to provide you with unbiased reviews of individuals and firms.

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