Colombian investors “pack suitcase”

Panama City, September 2023 - Colombia remains a good place to invest; However, investors have decided to pack their bags in search of new horizons. In this context, Colombia and the main cities of the United States have lost prominence compared to the advantages that Panama offers in terms of proximity, costs, benefits and opportunities for Latin American investors, and in 2021, significant investment flows were reported. direct from Colombia to various destinations, the three main recipients being the Netherlands (US$ 1,197.9 million), Panama (US$ 441.3 million) and Luxembourg (US$ 392.7 million). These countries represented 60.4% of Colombia's direct investment abroad during that year, marking a trend in the diversification of the country's investment interests.

Panama has established itself as an unparalleled destination for Colombian investors and entrepreneurs looking for investment opportunities. With steady economic growth, strategic location and a boom in tourism, the country has captured the attention of those seeking safe and profitable investments.

According to Camacol's economic report from March of this year, the World Bank estimates that Latin America and the Caribbean will experience modest growth of 1.3% in 2023 and 2.4% in 2024. In contrast, the Bank of the Republic of Colombia forecasts real GDP growth of just 0.2% for this year and 1% for 2024, marking a slowdown after notable growth in 2021 and 2022.

According to Natalia Botero, an expert in international real estate investments, these economic projections show a marked disparity between both countries, highlighting Panama for its constant progress. Over the past two years, its economy has seen impressive growth of 15.3%, and is expected to reach 5.8% in 2024, driven by significant investments and an increase in exports.

Challenges in the Colombian Real Estate Market

On the other hand, the real estate market in Colombia is facing challenges due to the economic slowdown. The high prices of construction materials and expensive loans for entrepreneurs have influenced the decrease in housing launches. In February 2023, there was a 64.4% annual drop in new homes compared to the previous year. Furthermore, the supply of commercial premises has decreased, reaching figures even lower than those reported before 2020.

Political uncertainty, high interest rates on mortgage loans, insecurity in cities and lack of confidence in the country's stability have reduced Colombia's attractiveness for foreign investors, says Botero.

Panama: A Profitable Business for Colombian Investors

For Colombian investors, the real estate sector in Panama has become one of the most attractive and profitable options. Natalia Botero, an expert in international real estate investments, highlights that the country offers economic advantages, laws that encourage foreign investment in dollars, tax incentives and a high quality of life.

According to the Panamanian Association of Real Estate Brokers and Promoters (Acobir), during the first half of 2022, Colombians invested around US$100,000 million in the Panamanian real estate sector. The majority of foreign investment in housing came from Colombia, Venezuela and the United States.

Regarding the real estate sector, the demand for rental of commercial premises is increasing. Panama offers investment opportunities in strategic locations. Office spaces have high occupancy, reflecting the country's economic and commercial boom.

Panama benefits from its strategic geographical location, with an annual economic growth of 6.3% and a solid logistics infrastructure, which includes the Panama Canal and ports in the Pacific and the Caribbean, facilitating international trade and consolidating it as an important regional logistics center. .

Panama is a country that invites investment. Its economy with sustained growth, strategic location, potential in tourism and access to markets in Central America, the Caribbean and northern South America make it a preferred destination to acquire properties. The devaluation of the Colombian peso and the stability of the US dollar make it even more attractive.

After the Americans, Colombians are the main investors in the Panamanian market. The incentives offered by the country to entrepreneurs, retirees and residents, along with Law 41 that grants tax benefits to foreign companies, make Panama an attractive destination.

To invest in real estate, Panama offers two options: make the investment or apply for an investor visa, which allows you to live and work in the country. The minimum investment amount is $300,000 and may include a completed property or a promise of sale contract.

Investors can access mortgage loans with competitive interest rates and financing of up to 70% if they are Panamanian residents. Documents such as a bank reference letter and evidence of resources are required for the purchase.

Key factors for a profitable investment

For a successful investment in the real estate sector, it is crucial to consider factors such as location, type of property, associated expenses and age of the property. Panama offers a retiree visa with no investment requirement, only a minimum pension of $1,000 dollars per month.

The Panamanian real estate market continues to attract investors thanks to its economic stability, strategic location, tax advantages and growth opportunities. This trend is anticipated to continue in the coming years.

A Bloomberg report revealed that Colombia is one of the main Latin American countries that chooses Panama as an investment destination. According to the Embassy of Panama in Colombia, the country is the second largest issuer of Foreign Direct Investment (FDI) in Panama, with a total of US$441.3 million in 2021.