The benefits established by Law No. 80 of 2012 seek to boost foreign investment in the tourism sector in Panama for:

  1. Public tourist accommodation.
  2. Establishments and constructions of tourist accommodation located outside the district of Panama.
  3. Establishments and constructions within the district of Panama.
  4. Complementary hotel investments such as golf and tennis courts, spa, gyms, discotheques, restaurants, convention centers, and marinas, among others.
  5. Tourist products such as conventions or exhibitions, incentive trips, nautical tourism for cruises, nautical tourism for marinas and docks, and others.
  6. Travel agencies and tour operators.
  7. Investments in public sites, among others.

The incentives established by Law No. 80 of 2012 are granted by the Panama Tourism Authority, once the company and activity to be engaged are registered with the National Tourism Registry.

Last December 2019, Law No. 122 was approved, which amends Article No. 09 of Law No. 80 of 2012. The purpose of this amendment is to favor investment and financing of new tourism projects or new stages and extensions of those projects already existing outside the district of Panama, for which the sums invested by individuals or corporations in the acquisition of bonds, shares and other financial instruments issued by tourism companies, will be considered 100% tax credit for income tax purposes.

The most relevant points of this amendment are:

  • The tax credit may be used annually as from the second year of the investment made, up to a maximum amount equivalent to 50% of the resulting income tax, as long as this does not exceed 15% of the initial amount of the tax credit up to 100% of the tax credit can be consumed during a maximum period of ten years from the date it was granted.
  • The incentive will be granted until December 31, 2025, to those investors not directly or indirectly related to the tourism companies that issue the financial instruments, and that are not part of the reorganization of a company into several legal entities, nor affiliates or subsidiaries of tourism companies.
  • The bonds, shares and other financial instruments may be issued by companies registered in the National Tourism Registry, including real estate investment companies duly registered with the Superintendency of Securities, in a stock exchange in Panama and in the National Tourism Registry.
  • The bonds or financial instruments must have a minimum validity period of five years, and may not be paid in advance, nor may they be acquired by the tourism companies themselves.
  • The validity of the National Tourism Registry will be enabled for those companies or hotels that have expired between January 1, 2014, and December 31, 2019, in order to maintain the incentives established in their records until December 31, 2025. For those whose registration expires after December 31, 2019, the validity is extended until December 31, 2025.

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