Panama is an often-misunderstood country.

    To set the record straight, General Manuel Noriega, along with his kidnapping and corrupt government, has been out of power for more than a decade now.

    Furthermore, despite what you may read in the mainstream press, Panama's economic performance is, almost every year, better than just about every other country in Latin America. In fact, over the past 40 years, the country's inflation rate has averaged less than 2% per year...that's simply unheard of south of the United States.

Panama is home to hundreds of private, deserted beaches, such as this one in front of the Villas at Contadora.

    When you compare Panama to its neighbors, you'll see that it has more amenities than traditional retirement spots like Mexico and Costa Rica--but costs and crime rates are lower. In Panama there is less red tape and less interference from local authorities. In fact, the government of Panama actually encourages foreigners to invest and live here.

    We like Panama for a number of reasons, including: 1) the tropical weather, 2) the low cost of living, 3) the reliability and efficiency you don't find in other Latin American countries, 4) the favorable offshore banking laws, 5) the stable economy (with the U.S. dollar as the currency), 6) the government investment incentives that slash tax rates and fees for entrepreneurs…and give retirees discounts on everything from doctor visits to utility bills, 7) the diverse geography (from mountain ranges to tropical islands…from a booming metropolis to vast jungles), and 8) the fact that it is still a relatively undiscovered paradise.

    Here's one way to think about this country. Have you ever been to a place where someone said, "Yeah, it's nice now…but you should have seen it 10 years ago"? That's what we think you'll be saying about Panama in the not too-distant future.

    In this section, we'll take a look at a few of these reasons to consider Panama as a place to spend part of each year…to start a business…to invest…or even to retire.

A safe stable government— with investment incentives

     When we first started investigating Panama more than five years ago, we expected to find a rough and unstable government. We expected shabby, squalor conditions. We expected a lot of anti-American sentiment. We found the exact opposite. We believe that Panama is the safest, most stable place in Central America.

    And we're not the only ones.

    For the past half-dozen years, the Panamanian government has focused on getting foreigners to put money into the country's economy.

    The government realizes that foreign investment will help the country as a whole…and so it has passed more than 40 laws protecting foreigners' investment rights, including the Investments Stability Law (Law No. 54), which guarantees all foreign and national investors equal rights.

    Major companies in Panama include Federal Express, DHL, Sears, Price Costco, Bell South, Kansas City Southern Railways, Continental and American Airlines, ICA (construction), Cable & Wireless, Evergreen, Warranty Company of the Americas, and Hutchinson Whampoa. Plus you'll find just about every American franchise you can imagine on the streets of Panama City.

    In addition to Law 54, the government is offering other incentives for foreigners to spend time here, invest here…or even live in Panama. For example:

*If you buy or build a new house, you won't pay property taxes for 20 years.

*As a resident, you pay no taxes on foreign-earned income.

*Panama passed Law No. 8 of June 14, 1994—the most modern and comprehensive law for the promotion of tourism investment in Latin America and the Caribbean. Law 8 offers incentives such as 20-year exemptions from import duties, fees for construction materials and equipment, and income, real estate, and other taxes.

    Plus, Panama uses the U.S. dollar as its legal tender, which insulates its economy from global shocks. During the Asian monetary crisis of 1998, Panama became one of the healthiest economies in Latin America.

The world's best incentives for retirees

    Without a doubt, Panama's "law for pensioned or retired persons" is the best deal going for retirees the world over.

    Qualifying for the Pensionado visa is relatively simple. You must:

1. Be in good health and free of AIDs (blood test at a local lab costs $25 and doctors exam is $10).
2. Have an up-to-date passport from your country of residence.
3. Have a verifiable minimum monthly retirement income or pension of $500 from a government or private company fund. For dependents (such as a spouse or children), you must show an additional $100 of income per month for each.
   If you do not meet the monthly pension requirement, you can instead deposit $100,000 in the National Bank of Panama. The interest from this account is proof to the government that you will be guaranteed a steady monthly income. You will have no problem withdrawing these funds should you decide to leave the country permanently.
4. Be 62 years or older if you are a man, or 57 years or older if you are a woman.
5. Have a clear police record for the past five years.

    Once you qualify, you get significant discounts on just about everything in Panama, from doctor's visits to transportation, restaurant tabs to utility bills.

    Here's a small sampling of the discounts you'll receive:

• Movies, recreational, and sports events: 50% off
• Public buses and trains: 30% off
• Boat and ship transportation: 30% off
• National airline flights: 25% off
• Hotels: Mon. - Thurs.: 50%; Fri.- Sun: 30% off
• Regular restaurants: 25% off
• Fast food: 15% off
• Hospitals (without insurance): 15% off
• Prescription drugs: 10% off
• Doctor visits and surgery: 20% off
• Dental work: 15% off
• Optometrist visits: 15% off
• Electricity (if under $50 per month): 25% off
• Telephone/water: 25%off

The world's best offshore bank haven

    Panama has the most modern and successful international banking center in Latin America (and the second largest in the world, after Switzerland), with more than 120 banks from 35 countries, including Citibank, HSBC, Dresdner, Bank of Tokyo, Bank of Boston, and International Commercial Bank of China.

    As one of the world's top offshore banking centers, Panama has no exchange controls or restrictions on the movement of money in or out of the country.

    It is also legal and very simple to form truly anonymous corporations. Panama may very well be the best tax haven on Earth, with the most solid banking and corporate book secrecy laws in the world, engraved in the country's constitution.

    Non-resident Panamanian corporations and foundations do not pay tax on any of their income--interest income and capital gains income included. Nor do they have any reporting requirements to the Panamanian government.

Mountains…beaches…and a First World metropolis

    From cities to beaches…mountains to tropical islands, Panama offers geographical diversity few places can match.

    Panama City is probably the least expensive First-World cosmopolitan city. In fact, it's our top choice, if you're looking for inexpensive city living. Here you'll find world-class restaurants, every imaginable luxury, hundreds of multinational businesses…all at about half the price you'd pay in Miami, or any other U.S. city for that matter.

    It's not just Panama City's skyline (which is more reminiscent of Miami or even New York than any Central American city we know) that looks First World...it's that things here work. You can get through the airport quickly and efficiently. The roads are pothole free. Your international phone calls go through the first time every time. Panama City is efficient and reliable, unlike any other Central American city we've been to.

    Outside Panama City, this country offers some of the finest natural attractions in the world…

* Because of its geographical position, Panama has recorded 940 bird species— more than in all of North America.

* Panama has some of the most dense rain forests in the world…and you'll find hundreds of beaches where you'll most likely have the whole place to yourself. Inland, there are several mountains where you can see both the Pacific Ocean and the Caribbean Sea.

* Panama offers some of the best whitewater rafting and deep-sea sport fishing in the world.

* There are more than 1,500 islands off the country's coast, some of which offer snorkeling and diving opportunities that rival any found in Central America.

* Surfers should go to Playa Santa Catalina, where it's not uncommon to find 10-foot waves. In Panama's 12 national parks you can see sea turtles, crocodiles, pumas, and jaguars, just to name a few of the native species.

* And, of course, there's the canal, one of the great engineering accomplishments of the last century.

    Yet, despite all of these attractions, Panama is still a relatively undiscovered haven. In 1998, the last year for which the World Tourism Organization has tourist figures, the country's total overnight visitor count was 431,000...100,000 of whom came from the United States. To put this in perspective: Panama gets about as many American tourists in a year as Disneyland sees in three days!

A 25% discount on your cost of living

    Panama isn't a dirt-cheap destination...but it is certainly affordable. You can expect to spend about 25% less to live here than in the United States.

    Groceries, for example, will cost about 20% less than in the States. You can go to the movies for $3.75…$2 on Wednesdays.

    Monthly fees for the brand new Summit Golf and Resort complex (with the top-rated course in Central America, according to WorldGolf.com) are $135 a month, about half of what you'd pay for a similar membership in the United States.

    A new car will cost just about the same here as it does in the United States. We picked up a new computer for the IL office (including a Pentium III processor, 128MB of RAM, CD ROM, a 30GB hard drive, standard software, and a 15-inch color monitor) for $850.

    Electronics, such as televisions and VCRs, are about the same price as in the United States, maybe even a little cheaper.

    Doctor visits are downright cheap. Our man in Panama, Greg Geurin, tells us that his recent dentist visit cost only $35, for a cleaning and check-up.

Word on Panama is slowly getting out…

    In the past few months alone, we've seen newspaper and magazine articles on Panama from all over the world. This country is finally starting to get the press coverage it deserved several years ago.

    "Panama is the most beautiful treat in the world and almost undiscovered," claimed a recent article in Harper's Bazaar.

    "Known mostly for its canal, Panama is, in fact, an undiscovered tourist paradise," stated a recent travel article in the Boston Globe.

    The New York Times, The Los Angeles Times, Modern Maturity, and National Geographic have also featured long travel articles this year praising the undiscovered delights the country has to offer.

    And look at the recognition from various agencies around the world:

* The Tripartite Committee has ranked Panama #1 in the region for low cost of living.

* Political Risk Services named Panama one of the top three countries in the hemisphere for best-risk investments.

* According to Canada's Fraser Institute, Panama is at the top of the list of the world's freest economies, ranked eighth with Australia, Ireland, the Netherlands, and Luxembourg.

    Many of the world's best companies have already invested here…

    In addition to passing legislation to attract foreign businesses, the Panamanian government has privatized most of its former state enterprises. Many big-name companies from around the world have realized the potential of this country, and have moved in…

* Cable & Wireless, a UK company, recently took over 49% of the National Institute of Telecommunications with a bid of $652 million.

* Foreign companies, including Constellation Power (U.S.), Union Fenosa (Spain), and Enron, bought up 51% of the country's power industry.

* Bell South bid $145.2 million for the right to use certain cellular bands here.

* U.S. companies Mi-Jack and Kansas City Southern Railways bid together to win control of the national railways. They will pay the government 5% of profits and invest $60 million.

* The Hong Kong-UK company, Hutchison Whampoa, won the concession for two important ports (Balboa and Cristobal) for the next 25 years. The company will pay the government $22.2 million per year and will put in about $400 million in port improvements.

    The point is, lots of big companies with lots of money have a lot at stake in Panama. It's not the kind of place that's going to simply disappear from the map. These companies realize that this is a sound investment in a quickly growing, peaceful country. (Panama, in fact, has no military).