A new law (No. 58 of December 28, 2006) has been recently signed offering incentives for investors wishing to build, furnish or remodel lodging facilities outside the Panama’s Special Tourism Zones.
The new law establishes attractive tax exemptions for a minimum investment of US$3 million in the Metropolitan area, including exemptions on the import of material and equipment, the import of vehicles for tourism development, and a 20-year exemption of property taxes.
Outside of the Metropolitan area, the minimum investment is US$50,000.
Although there have been 10 Special Tourism Zones declared in Panama, there are other areas with great investment potential such as mountain regions and islands, among others.
The new law is expected to draw more foreign investors to Panama as the country becomes more popular among expats from Europe and North America. This is the first time a major piece of legislation providing incentives in the tourism industry is passed in Panama since Law No. 8 of 1994, which expired on December 31, 2005.