We are assumptive that this applies to a foreign corporation operating physically in Panama doing some sub-contract work on the canal in Panama for a company headquartered in say China but also operating with a physical presence in Panama. Since offshore-derived income is already tax-exempt this is the only interpretation that makes sense to us.
The law also allows licensed corporations to hire foreign nationals to fill management positions with permission to work and reside inside of Panama. Think Panama Canal expansion companies and oil refineries being able to cut through the red tape and restrictions on getting foreign workers work visas.
The law creates a new government commission - The Commission of Licenses of Seats of Multinational Companies (translated from the Spanish literally, in Espanol it is: Comisión de Licencias de Sedes de Empresas Multinacionales). This commission will be presided over by the vice-minister of foreign trade and it will meet at least once a month. The obtaining and issuances of the work visas will now rapidly go through the Commission of Licenses of Seats of Multinational Companies thus avoiding any bogging down in the ordinary immigration channels. This practice is followed in Switzerland and Singapore.
The Law should bolster rents and sales of high-end office space in Panama, which is currently going at under Latin American rates, in other words it is not booming, and I assume the goal is to get it booming. The law should also cause a surge of foreign executives mainly with the Panama Canal Expansion Project to be looking for high-end housing rentals or purchases. This should fuel the already booming real estate market. The $5,000,000,000 being invested in three oil refinery projects added to the billions going into the Panama Canal Expansion should result in a substantial number of management workers and executives looking for high-end housing and in many instances they will be subsidized in whole or in part by the multi-national corporation they work for. This will also spike furniture sales, make the maid shortage worse and drive up the maids wages even more, restaurants suitable for business entertaining will thrive, and in general the economy should get yet another jolt upwards across the board.
HP and Caterpillar have already announced new offices in Panama City and it is expected that Proctor and Gamble will follow with an announcement in the near future. Big companies and celebrities tend to be copycats so more will surely follow.
You know just when you think the real estate bubble is ready to bust they pull another rabbit out of the hat. Are we destined to be the next Hong Kong and see residential real estate prices of $12,000 to $20,000 a sq. meter and we don’t know it yet? Stay tuned for more updates as the real estate boom in Panama could reach unprecedented price levels.
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