Panama’s economy is based on a free market with the financial, commercial and tourism services industry contributing heavily to Panama’s flourishing economy. The Panama Canal is also a major contributing factor, supplementary services such as ship registration insurance and seafaring container services showing steady growth.
Other significant Panama’s industries include, spare part manufacturing, and cement production, food processing and agriculture. Panama is a big exporter of coffee, bananas, sugar, shrimp and textiles. Panama City, the main financial and banking center in Panama is the envy of other developed countries with a cosmopolitan setting, modern day city infrastructure (towering high rise buildings).
Panama’s national currency is the Balboa. The Balboa is equivalent to the US dollar, which is the official commercial currency. Panama has an estimated population of 3,300,000. The increasing numbers of expats to Panama are a result of a very beneficial and advantageous Panama retirement program that offers expats countless benefits. The Panama Pension Program attracts retirees from the United States, Canada and Europe. Ranked as the best pension programs Panama retirees benefit from tax exemptions, hotel, accommodation discounts, extremely affordable medical services and pharmaceutical products, discounts on utilities, entertainment and a host of other benefits. In the last few years, cosmetic surgery and associated medical services has become a lucrative market.
Panama’s cost of living is markedly low and combined with the perfect weather, affordable real estate, a vast country with much to do and a very lucrative pension program, the country retirement populations continues to grow and thrive.
Panama is officially an offshore jurisdiction, offering offshore products such as offshore companies, offshore banking and offshore foundations. Tax exemptions on income derived outside Panama is key feature of the offshore product in Panama. Foreigners living in Panama can incorporate a Panama company and as long as that offshore company does all of its business and earns all of its revenue outside Panama, no local taxes will be applied on any income. The anticipated flat tax schedule ( a system with a flat tax of 10%) promises to raise revenues, put control inflation and the local sale tax of 7% will help to finance many infrastructural projects in Panama.