President Martinelli has signed an Executive Degree that all foreigners who do not require a visa- this includes all American and European citizens, effective now will get an automatic 180 days stay in Panama upon entering the country. Foreigners who enter Tocumen Airport are  receiving this 180 stay.

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Our family just enjoyed  a truly  sumptuous meal including our hard-to-please older kids (age 19 and 21) . Eurasia is one of our favorite Panama City restaurants.  Why? First, because it’s because of the creative fusion cuisine. Eurasia  fusion means a bit of Asia, a bit of Panama ( the owner is Chinese-Panamanian)  and a bit of Europe- yummy.

It is hard to say which dish was better- my husband’s ginger corvina, my sour plum spare ribs, my son’s chicken malay and our daughter’s vegetarian pie.   These are all unique dishes with a combination of flavors hard to find anywhere else.

Second,  we love Eurasia is because of the  all-you-can-eat dessert buffet. If you love dessert- this is the place. For just $7.50 you can feast on the best carrot cake in Panama a rich chocolate cake more like a dark fudge, a delicious three leches (Panama’s most exquisite dessert)  plus pecan pie, flan, etc.

Third,  we love Eurasia  because of the decor- Eurasia has one of the best decors and ambiences in the city.

Owner Gloria Chu learned the joy of food at her own family table as a child.  Her joy in giving others joy through food permeates the Eurasia experience.

Nancy Hanna, President Panamainfo.com/The Panama Planner

Euroasia is located in Bella Vista.

It is open:Monday-Friday, 12:00pm-3:00pm and 7:00pm to 10:00pm.
Saturdays, 7:00pm to 10:00pm.
Sundays, closed.

Tel: 264-7859

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Panama is seeking to position itself as a surfing destination and rightly so. Panama has some of the best surfing venues anywhere. A step in that direction is the upcoming World Surf Master Tournament in Santa Catalina. 20 countries will participate with 300 international guests. The event will be covered on ESPN,  Surf Line the most important surf webpage in the US  and Surf Magazine.  Panama is following Costa Rica which receives 1000 surfing tourists a day and is the third top surfing destination in the world.

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 Retiring Abroad Can Cut Expenses but Don’t Let Wanderlust Blur Vision- Washington Post, June 27, 2010

Panama continues to get excellent coverage in mainstream press for retirement. This Washington Post article follows articles in Forbes and Business Week- all in the last year.

Excerpt:

When Sid and Barb Williams began searching for the perfect place to retire, they never thought they’d wind up living outside the United States. But they kept hearing about the benefits of retiring to Panama.

The Central American country not only offers a warmer clime than their hometown of Cincinnati but also provides a lower cost of living, generous financial incentives for retirees, and a reliable and affordable health-care system. Plus, Panama uses the U.S. dollar, so there’s no need to hassle with foreign currency.

After visiting, the Williamses were so entranced by the area’s beauty and value that they decided to go for it. In 2008, just as the stock market began to head south, they did, too. For less than $250,000, the Williamses bought a three-bedroom, three-bathroom (plus maid’s quarters) condo in a new nine-story building overlooking the Pacific Ocean.

Today, they are happy about their decision and their timing. “We could have retired comfortably in the U.S.,” says Sid, 66. “But we live three to four times better down here.”

Do a reality check

Check out the whole article here:

http://www.washingtonpost.com/wp-dyn/content/article/2010/06/26/AR2010062600183.html

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Below is an excerpt from this article. However, in my opinion in Panama  you need a Social Security check of at least $2000.00 to live “comfortably”.  This does not include rent or  mortgage. To live on this amount you would also to buy a home or condo as well.

US News and World Report Blog Post

One of the most compelling reasons to consider retiring to another country is the opportunity to reduce your cost of living, maybe dramatically.

As one American I know who retired to Boquete, Panama put it recently, “Back in Tucson, Arizona, where I’m from, my monthly Social Security check might cover the cost of my utilities. Here in Boquete, my income from Social Security is enough to buy me a very comfortable new life.

The average Social Security check is about $1,200. You can receive that payment while living anywhere in the world. In some countries, you can even have your Social Security check direct-deposited into your local bank account. Here are five places where you could retire on your Social Security income alone.

Boquete, Panama. Panama offers super user-friendly options for foreign residency. Resident retirees receive a long list of benefits including discounts on everything from prescription medicines and in-country air travel to closing costs on the purchase of real estate.

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Panama as a business capital continues to get positive press

(Reuters) - A generation after Panama shed a tradition of military rule, canny fiscal management and good stewardship of its emblematic canal have made the tiny country a model of success for today’s frontier markets.

An investor darling that has grown rapidly over the last decade and even managed to dodge recession during the recent global downturn, Panama’s government debt has received a coveted investment grade rating by Fitch and S&P.

Panama will not realize its ambition of joining the world’s most developed nations until it cleans up its murky banking system and narrows a wealth gap that leaves a third of its people in poverty, but economists say it is well-positioned for steady growth.

“What’s striking is that this is such a broad-based economy,” said Boris Segura, an economist with the Royal Bank of Scotland. “Yes, they have the canal but there is also tourism, construction and a growing financial services sector.”

With a population of just 3.4 million, Panama will never be a China or a Japan but local leaders say it can aspire to become like Singapore, an affluent and diverse crossroads for international finance and trade.

“Nobody is going to come to Panama to sell to the domestic market. We tell investors ‘Come to Panama and sell to the world’”, Trade Minister Roberto Henriquez told Reuters. He sees the small isthmus nation’s future as a boutique exporter of high-margin goods and services.

See the whole article here:

http://www.reuters.com/article/idUSN2320863320100528?type=ousivMolt

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TAKE A REPROSA FACTORY AND HANDICRAFT SHOW ROOM 

When if comes to a unique and beautiful gift that showcase’s Panama’s culture, history and natural beauty- most everyone goes to the REPROSA’s stores- the  one in downtown Panama City and one in Casco Viejo. In addition to their unique jewelry, REPROSA  is the place to find the finest tagua, carabola carvings and Embera baskets .

Now you can enjoy REPROSA another way.  Treasures of Panama Tour at the REPROSA award-winning factory, just minutes away from the ruins of Panama Viejo.  We just took this tour and loved it. 

An informed guide will demonstrate how the fabulous gold artifacts of Panama’s Museum of Anthropology are reproduced, using virtually the same method as the ancient goldsmiths.

(You can even try your hands at the process!)

 Their showroom also includes some of the best examples of local handicrafts and their reasonably priced jewelry is highly recommended as the “perfect gift” by major guidebooks.

$10 admission includes refreshments and “goodie bag”.

 Tours are daily Monday thru’ Friday at 9.30a.m. and at 2.00p.m.

For bookings, call 271-0033.

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The International Monetary Fund has just released an analysis of the economic progress of each country in the region over the next 5 years. Panama comes out on top with a projected growth rate of 5% for 2010 and between 6.1% and 6.5 % until 2015.  This good news comes along with the recent good news that Panama now is now investment grade.

This analysis reflects confidence in Panama and its 5 billion dollar Panama Canal widening project and in the Martinelli government which is undertaking numerous important infrastructure projects-including two new international airports, a Panama City Metro, and a convention center. At the same time, the government is  seriously reducing corruption- the major reason that Panama and other Latin American countries have been held back in their development.  Transparency International estimates that corruption costs 30% of the GNP in Latin America.

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International Real Estate

MARKET OVERVIEW

Tito Herrera for The New York Times

Published: April 6, 2010

Tito Herrera for The New York Times

Twelve miles from Panama City, Lake Las Cumbres is a popular fishing and boating destination.

$1.1 MILLION

Set on the shores of the lake in Las Cumbres, a wooded area 12 miles northwest of Panama City, this 1,000-square-meter (10,764-square-foot) home was built in 1999. The brick-and-concrete structure has three stories and an open-air sitting area with a roof; there is also an outbuilding on the property.

The entrance to the main house is on the second floor, which has an entry hall with a glass elevator. The open kitchen is on this level, with glass-and-wood cabinets, blue tiled countertops and a built-in breakfast table made of concrete and brick. The open living and dining room has floor-to-ceiling windows and a wooden balcony. There is a half bath off the living room and a laundry room off the kitchen.

Upstairs the master suite has lake views, two offices, a Jacuzzi with a skylight above it, a walk-in closet and an en-suite bath. A tiled terrace is off the bedroom.

Downstairs are two additional bedrooms, each with an en-suite bath. There is also a patio.

Outside on the two-and-a-half-acre property is a swimming pool with a deck and waterfall, and a 50-square-meter (540-square-foot) roofed structure called a “rancho.” This has a built-in bar and cabinets, a dining and barbecue area, and space for hanging hammocks.

A separate two-story structure, built into the hillside, has a gym and a guest room, each with its own bath, and roof-level parking for four cars.

The property has abundant vegetation, including mango and plantain trees, and ficus and coffee plants. It is not unusual to sight toucans and sloths. The property has about 100 meters of shoreline on Las Cumbres Lake, a popular destination for boating and swimming. Tocumen International Airport is about 30 kilometers (20 miles) away.

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This is an article written by my friend Paul McBride.  A lot to think about.

The United States Government Does Not Want You to Move to Panama

Panama Investor Blog’s Sam Taliaferro comments:  Paul McBride wrote this piece earlier this week. Paul and I have been watching things pretty closely over the years and it has become clear to us both that the window of opportunity is closing for those who want to get their assets and their asses out of the U.S.. We don’t believe the government will stop you from leaving, but they will make it very much more difficult and expensive to do so. I believe Paul’s scenario below is very close to the truth.

The United States Government Does Not Want You to Move to Panama

Actually, the U.S. government doesn’t care whether you decide to move to Panama or not, they just don’t want you to take your money.

Most of the people I meet who are looking for a home or property in Panama just want to live comfortably in a beautiful environment at a reasonable cost.  For many, Boquete is the perfect choice.  Mild weather, magnificent scenery, great community and most, if not everything, they need to live a cozy day to day existence.  I can safely say that the average couple living in Boquete spends less than $2,000 a month in total living expenses.  That’s everything – car, health and home insurance, food, gas, entertainment (we go out a lot!), utilities, cable TV, Internet.  You name it, the whole enchilada. Did I mention very low or no property taxes?

This simple formula, low living costs and quality lifestyle, was the reason that Boquete became one of the most desirable retirement destinations in Latin America.

But what if I told you that the price of real estate in Boquete was likely to increase as much as 30% in the next two years or so?  A home that costs $250,000 today could be as much as $350,000 in that short period of time. A $150,000 condo could cost $215,000 or more.   In today’s market that sounds absurd.  But this is a real possibility…… if you happen to be a U.S. citizen.

You see, the United States Treasury is concerned about money leaving the country.  Money that they’re going to need to pay their bills.  The Federal government is running an operating budget deficit of over a trillion dollars this year and, by their own admission, this level of deficit spending is projected to continue for several years in the future.  In order to service this unfathomable debt they’re going to need to do one of two things – drastically cut spending on defense and entitlement programs or significantly raise taxes.  Which way do you think they’ll go?

My bet is that they will raise taxes and it’s not unthinkable to believe that the total tax burden for high income workers (the definition of which keeps changing all the time) will reach a combined total of 60% to 70% when you include state, local and federal taxes.  Think about that – 60 to 70 cents of every dollar you earn will go to the government, with much of it being spent to cover the debt.  And the state and local governments are in even worse shape.   I project that will see increases in income taxes, capital gains taxes, payroll taxes, Medicare withholding, property taxes, sales taxes, death taxes, increased fees for services, all types of licenses and taxes we haven’t even heard of yet.  If a state, local or the federal government can squeeze a nickel out of you, they most certainly will.

In an environment like this, more than a few people will stop voting at the ballot box and start voting with their feet.  They will begin leaving the country with as many assets as they can and go somewhere where they can live their lives in comfort without watching everything they’ve worked for, everything they sacrificed for, get taken away in taxes or eaten up by inflation.

The federal government is aware of this real possibility.  So aware, in fact, that they’ve been methodically preparing for this potential exodus of money for the past two years.

On June 17^th, 2008 the Heroes Earnings Assistance and Relief Tax Act of 2008 (H.R. 6081), also known as the Heart Act, was unanimously passed by Congress and signed into law by the President (a Republican no less).  This piece of legislation was very well intended.  It provided much needed tax relief for the men and woman of our military who are sacrificing their time and their lives for our country.  But this bill also contained some language that targeted a very different group – expats who, for whatever reason, decided to give up their U.S. citizenship.  The bill provides for withholding taxes of up to 30% on certain assets held by the expat as well as assessing the value of the property of the expat 24 hours prior to the renouncing of their citizenship.  Keep in mind; only around 600 Americans renounce their citizenship each year, so the expected revenue from this small group is relatively limited.   More important are the procedures and policies established by this bill that can be modeled for future legislation.

Okay, so this bill is not a big deal.  Few people actually give up their U.S. citizenship and it’s not likely to directly affect you.  What’s more, if someone decides to give up their citizenship, who really cares how much they’re taxed?  But it does establish some policies, procedures and tax rates for individuals who decide to live offshore.  Policies, procedures and tax rates that very well could affect you in the future.

As a follow up to the Heart Act of 2008 we have the Hiring Incentives to Restore Employment Act (H.R. 2487) commonly known as the HIRE Act (don’t you just love these names?).  This is the jobs incentive bill that was signed by the President on March 18^th amid little fanfare.  In a congressional bill of 47 pages, presumably written to address the unemployment situation in the U.S., 21 pages are devoted to the treatment of foreign bank accounts and other offshore investment vehicles held or controlled by U.S. citizens.  But I thought U.S. citizens were already required by law to disclose their overseas account to the IRS, so why do we need this legislation?  Well, yes they are.  But this law goes a bit farther in that it requires foreign financial and non-financial firms to report accounts held by American citizens to the U.S. Treasury.  So, in effect, the United States Congress has passed a law that requires a foreign firm, located in a foreign country, to disclose account information held by a U.S. citizen (including name, address, tax ID number, account number, account balance, and flows of funds into and out of the account) to the United States Treasury on their demand.  Now, that takes some nerve.  What if the country where the financial firm is located has laws against disclosing this information?  In that case, the law requires the financial firm to obtain a signed waiver from the account holder authorizing the firm to disclose the information.  If they don’t sign the waiver, the financial firm is required to close the account.  I spoke to an attorney friend of mine who told me that his firm is no longer accepting U.S. clients because they don’t want to be harassed by the IRS.  Because of this law, foreign banks are likely to close accounts held by Americans due to the bookkeeping hassle or the potential liability posed by the U.S. account holder.  The fact that banks and law firms will no longer want to work with U.S. citizens is an unintended consequence of this legislation.   Or was that the real intended purpose?

Despite these two laws, the U.S. Treasury knows that a determined citizen, driven by the fear of increasing taxes and confiscation, will find ways to keep their privacy and their assets away from the long reach of the U.S. government.  In fact, the Hire Act even has a name for these non compliant citizens – recalcitrant tax payers. And this is where I think a third piece of legislation will fill the gap.

It’s my belief, based on the actions already taken by the U.S. government, that an exit tax will be instituted to capture money at the source (your U.S. bank), before it leaves the country.  I believe that this exit tax will apply only to certain specified transaction (since senators, congressmen and their wealthy patrons will still need to get their money out of the country).  Further, I think this tax rate will be in the 30% range (remember the Heart Act and the withholding requirements of the Hire Act?) and will be withheld by your bank and remitted to the U.S. Treasury at the time you make a transfer to a foreign entity.  Like the provisions inserted into the Heart Act and the Hire Act, this exit tax will likely make its way into some well meaning piece of legislation, inconspicuously inserted in the arcane language of the bill and will become the law of the land.  Most Americans will not even know the law exists and many of those that do understand won’t object because it will not have any impact on their lives.

And this, my friends, is how the $250,000 house in Panama suddenly costs $357,000 and the $150,000 condo will take $215,000 of your hard earned cash to buy.

If you are thinking about moving to Panama (or any foreign country) or investing overseas, the window of opportunity is getter smaller and smaller.  Although I don’t believe the U.S. government will ever prohibit you from leaving the country, I’m convinced that they will make it increasingly difficult to get your money out without a punitive tax.

Perhaps I’m wrong.  Maybe I’m misreading the situation and the U.S. government isn’t concerned about the flows of funds overseas for the average citizen.  And maybe this current financial crisis is just a bump in the road and the economy of the United States will start growing enough to cover the debts that are piling up without huge tax increases.  Maybe.

But try this mental exercise – Let’s say you believe the scenario I’ve described is a real possibility and you decide to act by moving some of all of your assets overseas, buying a house and creating a “Plan B” lifestyle for you and your family.  And then, none of the currency restrictions predicted happen, the U.S. economy springs back to life, the government institutes favorable tax policies to encourage investment and growth and money making opportunities abound.  What’s the worse thing that can happen?  You can always move your assets back to the U.S. since you’ll never see restrictions on money moving into the country.

But what if I’m right?  What if the economy continues to sputter?  What if unfunded liabilities like Medicare, Social Security or the new health care plan continue to expand the federal debt causing the economy to stagnate, forcing increases in tax rates and placing restrictions on the flow of capital overseas?  If you’ve chosen not to take action, what options are left for you and your family and at what cost?

Freedom means having the ability to make choices.  I believe there’s still time to make choices but the clock is winding down.

 Good luck and God bless.

Paul McBride

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