subject: Panama Gearing Up To Be A Big Player In 21st Century World Economy [print this page] Within the next few years, Panama may be the first third-world country in Central America to rightfully take its place as a first-world country, along with the United States, Britain and others. An ongoing expansion project at the Panama canal promises to make the country a virtual money making machine upon completion.
Much larger ships will be able to pass through the canal, at toll costs that will add millions of dollars into Panama's coffers instantly. Economic growth for 2012 is predicted to be 8% over last year, with no end in sight for future years.
The United States stands to make money from this arrangement as well. The Foreign Account Tax Compliance Act, or FATCA, requires foreign banks to charge a 30 per cent tax on all payments or transfers for American business people using foreign funds to conduct business and refuse to identify themselves.
Indeed, Panama has in the past been seen as a tax refuge for companies trying to save money by cheating on their taxes. The FATCA agreement is designed to help both the US and Panama collect the fees that are due to both.
Panama's government however does not appear to be overly enthusiastic about enforcing the FATCA laws. This is easy to see why, as financial services for users of the Panama Canal compose nearly three quarters of Panama's gross national product. An even wider canal will result in even more funds for Panama as more ships move through the canal.
Panama banking officials must be persuaded to help the government collect these taxes. The temptation is to ignore them, however. Some companies would rather sail around the South American continent rather than pay the huge 30% tax bill. This would result in a loss of income for Panama. American and Panamanian officials are working to arrive at a version of Fatca that will work in both cases.
Other countries such as France, Germany and Great Britain are watching these discussions between the U.S. and Panama. They have ships passing through there are well, and certainly have their share of clandestine shippers to deal with. A successful agreement between Panama and the United States would open the door to similar agreements with shippers in other countries.
Fatca or no Fatca, Panama is currently in an economic state that it has not seen in literally hundreds of years. Once a very rich country during the 1500s, it is now seeing profits that could very well make every citizen of the country quite well off in a very short period of time.
The FATCA disagreements need to be settled quickly, as they are holding up the creation of more bank accounts. Panama banking is virtually at a standstill while the fine points of FATCA are ironed out. In a recent interview, Panamanian President Ricardo Martinelli recently said it would be easier right now fly to Mars than to open a new bank account in Panama. His government is working to develop ways to prevent further profiteering from dishonest businesses.
As time goes on, keep an eye on Panama. It could very well be the place to invest in new businesses in the near future, once the FATCA agreement is in place and enforced.
by: Jordan McPelt
welcome to Insurances.net (https://www.insurances.net)
