Invest in Panama or other offshore locations and gain the benefits of cross jurisdictional diversification in stable, growing economies with a variety of investment opportunities.
Why Invest in Panama?
While we can’t recommend all of the countries you should diversify your investments into, we can recommend investing in Panama for several reasons:
- Stability: Since 1989, Panama has had a stable democratically elected government with no political instability or civil unrest.
- Economic Growth: In spite of the worldwide economic crisis Panama’s economy has seen steady growth since 2005 with low inflation, low unemployment, and constant GDP growth. Panama’s consistent growth and economic stability far surpasses the United States in relative GDP terms.
- Close to the U.S.: Panama is only a 3 to 5 hour flight from most major U.S. cities including non-stop flights from Atlanta, Chicago, Houston, Los Angeles, Miami, New York, and Washington, D.C. There are even direct flights from Toronto.
- Foreign Investments Protected: Panama’s Civil Code, Constitution, and its Foreign Investments Act all provide assurance that foreigners have equal rights as Panamanians when it comes to property ownership, investments, and commerce.
- Panama has some superb investment opportunities such as:
d. Panama Reforestation Investments offer 2% median appreciation in teak hardwood, plus appreciation of the land, in U.S. Dollars. Panama teak reforestation had a return of 460% in the last 20 years at an annual 23% average.
e. Panama Pacifico Project rental property investments offer from 7% to 10% CAP rates, in U.S. Dollars.
f. Panama Beach Front Lots averaging from 10% to 15% annual appreciation, in U.S. Dollars.
g. Panama Agricultural Land averaging from 7% to 8% annual appreciation, in U.S. Dollars.
9 Investment Opportunities in Panama
Our Panama law firm provides Panama investment opportunities for investors seeking reliable offshore investments. We have a huge network of bankers, investment brokers, private sellers and other investment professionals providing unique opportunities for offshore investments, including:
1. Residential Panama Real Estate in Panama Pacifico Special Economic Zone
There is a housing shortage near the newly under construction small city called the Panama Pacifico development located near the Panama Canal Zone. It is being developed by the renowned London & Regional Properties company which is the biggest property developer in the United Kingdom. This 3,459 acre development contains an air freight airport with offices and plants occupied by over 125 multi-national companies with 50 more scheduled to locate by the conclusion of 2012.
The Panama housing investment consists of 3 to 4 bedroom homes, town houses, and apartments. An estimated CAP rate of 8% to 10% with local bank financing of 4.5% makes this an attractive Panama property investment.
Learn more about investing in Panama Pacifico real estate.
2. Offshore Life Insurance Policies
Offshore Life Insurance Policies are offered in the British Isle of Man which allows non-U.S. citizens a tax write off on their life insurance premiums with tax deferred or tax free investments in a variety of government bonds, mutual or direct funds, etc.
Learn more about investing in offshore life insurance policies.
3. Foreign Private Placement Life Insurance
While being in full compliance with U.S. tax laws, this self directed life insurance policy allows U.S. taxpayers to make tax deferred investments.
Learn more about Foreign Private Placement Life Insurance.
4. Own Offshore Gold Bullion Accounts
Physical ownership of gold as a hedge against inflation is the preferred method over gold certificates or corporate stocks of mining companies.
We can recommend a solid 20+ year old company which can purchase the gold, transport it to a secure vault for storage, and assist you with selling the gold in a tax advantage manner. Continue reading about investing in gold bullion.
5. Buying and Storing Gold in Panama
A few Panama banks are offering gold coins and gold bars for sale and can store them in their vaults. We explain the advantages and benefits with buying, storing, and investing in gold in Panama here: Panama is a Safe Place to Buy & Store Gold.
6. Panama Credit Unions & CDs
We’ve prepared a detailed article explaining offshore Credit Unions, which describes how you can earn as much as 8% annual compounded interest rates with deposits in safe offshore Panama Credit Unions. Learn more here: Panama Credit Unions
7. Buying Rare Industrial Metals
Physical ownership of Rare Industrial Metals besides gold and silver is another way to hedge against inflation. The Swiss based company we recommend has different baskets of rare industrial use metals for sale. In 2011, one of their basket’s six metals increased in value by 51% while their Silver for industrial use basket rose 78%.
The advantages of owning rare industrial metals are explained here: Own Rare Industrial Metals
8. Invest in Panama Reforestation
We’ve seen Panama reforestation provide 23% annual returns, plus through the reforestation visa you can gain Panama citizenship for an $80,000 USD investment.
Green Investments are popular and Panama offers government certified Teak reforestation projects where a $80,000 USD investment buys 5 hectares of teak forest in its early growth stage where over a 20 year period (including thinning every 6 years with sale of those woods) the average annual returns are 23%.
This unique Panama investment is described in our Immigration section here: Panama Reforestation Visa
Contact Us for more information on investing in Panama & other offshore investment opportunities.
What happens if you only invest in the U.S.?
Too many investors make the mistake of having all of their investments in one country. If that country’s economy collapses so will the bank accounts, CD’s, corporate stocks, government bonds, treasury notes, and real estate investments.
When the worldwide economic crisis began in 2008 real estate prices in the U.S. plummeted. In addition, so did the U.S. commodities, stocks, government bonds, and banks. U.S. cities are still filing for bankruptcy!
The European Union (EU) has also been greatly impacted by the global economic crisis. Spain and Cyprus became the 4th and 5th EU countries seeking aid from the EU Bailout Funds during the week of June 25, 2012. 5 EU countries are broke along with their banks. Spain’s banks were recently downgraded by Moody’s. Slovenia may soon become the 6th EU country seeking EU Bailout Funds according to its Prime Minister. More EU countries will seek aid within the year.
During the same week, the city of Stockton, California filed for bankruptcy. On June 29th 2012 the Federal Reserve reported that foreigners are reducing their holdings of U.S. Treasury Bonds.
Countries such as Kazakhstan, the Ukraine, and Turkey recently bought gold to protect their reserves. Chile and a few other countries have agreed not to use the U.S. dollar and settle all trade debts with China in China’s currency (Renminbi). China plans to create a special zone in Shenzhen, one of its wealthiest cities, allowing full exchange and conversion of the Renminbi.
Invest in Panama and Implement Cross Jurisdictional Diversification
Cross Jurisdictional Diversification means diversifying your investments across different countries.
As an investor, it is best to avoid using just one fund manager. Additionally, Cross Jurisdictional Diversification stands for not placing all of your funds into one fund Management Company because that company could go bankrupt, simply close its doors and disappear, or be shut down by government regulators. If any of those should happen what will happen to your funds? A U.S. money management company called MF Global recently filed for bankruptcy reporting $1.6 Billion in missing customers’ funds. Don’t let this happen to you.
Geographical investment diversity makes sense. Putting all of your assets, your home, and your business under one government is putting all your eggs into one weak & frail basket.