Peter Macfarlane reports from Panama on his airport covid testing experience and talks about good deals coming up for investing in Panama – and two great ways you can benefit right now short term from low cost substance and tax advantages.
Well here I am, writing to you from Panama City, Republic of Panama. I have an apartment here and Panama has been one of my favoured offshore business bases for years, so I had to come back at some point. On the agenda: some banking, routine business meetings about a client’s Foundation, and a visit to check out a new duty-free gold storage facility.
A while back I wrote how my mental image of Panama changed forever with the lockdown. What I thought was a freedom-loving country introduced an absolutely draconian, police state lockdown. Some readers replied that I was being a bit drastic and that not all was as it seemed. Hence here I am.
Well, as much of Europe and North America are going back into lockdown, Panama is open again. Travellers wanting to fly into Panama City’s Tocumen airport, whether they have Panamanian residency or not, need a negative covid test.
The rules issued in October were not exactly clear, even though I read the Presidential Decree. They have now clarified things and the coronavirus test must be taken less than 48 hours before your entry into Panama. They supposedly accept PCR tests, but there are very few places in the world where you can get a swab taken, have the PCR test done, get the results back and physically get to Panama all within 48 hours. In terms of my personal experience, I was flying in from Europe so this timeline was impossible.
The answer, then, is a rapid antigen test. And you can get this done at the Hub of the Americas in Tocumen when you arrive. I am going a bit off topic here, but I could not find much practical detail on the test online so I thought it would be useful to publish my experience as of November 2020, for the benefit of any readers who are wondering whether to visit Panama this year.
I had visions of long lines for the airport covid test, but the process was actually quite fast. There was no-one in front of me in the line, so I paid the $50 fee (they accept cash or card) and immediately had a swab taken from my nose (not throat). The tests are carried out by a private company called Jers Medical Panama Inc. Whoever got this concession is certainly onto a winning business.
I was then told the result would be available in 20 minutes. I went and grabbed a drink at the bar nearby, and was back in 20 minutes at the Covid Testing station. I then had to wait about another 30 minutes for the result, so by this time we are at about an hour since landing.
Fortunately, the result came back negative. Documentation online shows these tests do give a certain proportion, albeit small, of false positives. If you test positive you get detained for at least 7 days in a government managed hotel room at your own expense. So that is something to consider. If you can get a test done before flying, I would advise it – but many places still do not have easy access to these rapid antigen tests.
So, test results in hand, I went downstairs to immigration. A lady in PPE looked at the test result, checked my name against my passport, and checked the time and date. Then she sent me to immigration.
I heard rumours that a sworn declaration about covid would be required to enter Panama, but nobody asked me for such a document. Migration was very fast as there was almost no-one entering the country. The next problem was no Ubers were available, presumably as a result of the dearth of tourism and business travellers, so I had to take a regular taxi that cost double what an Uber costs.
Anyhow, enough about my coronavirus airport test experience. Now you know what to expect in terms of covid testing if you are flying into Panama either on business or pleasure.
Panama City today is like a ghost town. Many businesses such as shops and restaurants have closed. Unsurprisingly, most were unable to survive the drastic eight month lockdown. Many foreign business owners simply left. There was a moratorium on all rent payments, loan and credit card repayments during the lockdown, so most of the population have accumulated huge debts with no reasonable hope of being able to pay.
Is it a good time to invest in Panamanian property? There will certainly be some fire sales and other great deals coming up, but I suspect the full impact is yet to hit and we will see what happens in 2021. Personally I would not rush to buy right now, but would get cash ready to jump on deals that might come up.
And how about banking in Panama? Panama’s banking system is generally pretty stable, but the banks will be badly hit by this debt moratorium which eventually must come to an end. It is hard to imagine what the effects of this will be. The economic effects of the pandemic are being felt worldwide, but Panama had the longest and strictest lockdown in the region, so is likely to be even worse hit than other countries.
What is a good deal now, for sure, is real substance in Panama for offshore companies. There is so much available business space, and plenty of well qualified employees. Renting a small office and staffing it with one or two people will be cheap and doesn’t require a large capital outlay. I am actually setting up one such deal for a consulting client right now. He is going to use Panama as a hub for Latin American distribution of his company’s products – with a nice side benefit of tax advantages for the whole group!
There are also reliable rumours about changes to the requirements for the Friendly Nations visa. It is no longer a matter of if, but when – and it is coming soon. The Panamanian Friendly Nations residence visa has to be one of the easiest residence permit deals of all time. If it is something you have been putting off, do it now – fly in, get your covid test, spend a week or two in Panama and fly out having completed all requirements for Permanent Residence in Panama.
This would certainly be my advice now, for anyone who has an existing Panama company or Foundation. Having a real office is becoming a must for banking in Europe and beyond, with banks no longer wanting to provide services to shell companies. And if you as owner are resident in Panama, all the better – this way you can also legally sidestep outward reporting, subject to certain rules – see my recent article Legal Ways to Avoid the Common Reporting Standard – And Why You Should Do So!
This window of opportunity will not stay open long in Panama, so do not think about it too extensively or procrastinate!
While I’m here I will also be meeting up with key partners to update the Panama material in our members area which will be published soon. If you are not yet a member, our $5 pre-launch offer is still applicable. That’s right – only $5 to get access to lots of historical Q Wealth research material, and more importantly also future updated material on the topic of Panama and other international investment and banking jurisdictions.