Off-topic: James Bond in the former Panama Supreme Court

James Bond Part 22 ("Quantum of Solace") is being filmed in Casco Viejo Panama City and Colon. The video shows the local media chasing the actors in the former building of the Supreme Court - now the Institute of Culture - in the Plaza de Francia. The location is meant to portray a hotel in La Paz, Bolivia.
There, some more trivia for ya ;-)

2008 Immigration Law finally published

The 2008 Immigration law was finally published online in the Gaceta Oficial as Law Decree 3 of February 22, 2008, whereby the National Immigration Service, the Immigration Civil Services and other provisions are created.

The final text of the Immigration law can be downloaded in PDF files (Yahoo registration required):
http://groups.yahoo.com/group/Live_in_Panama/files/DLey3_08Migracion.pdf

Panamanian law gets you financing at 2% to 3% interest rates until 2008, or later ...

Banks granting residential mortgages for new residences below US$62,500 receive a negotiable tax credit equivalent to interest reduced in 2 to 4 points below the prevailing rate (see http://lawyerfuture.blogspot.com/2006/10/buying-your-real-estate-in-panama.html).

This has made financing the construction of houses an attractive business for banks, who after earning the tax credit can assign or transfer it to another company which has to pay a lot of taxes, but at a discount. The benefit stems from a little-known Panamanian law that gets you financing at 2% to 3% interest rates. The law expires this year 2008. http://mensual.prensa.com/mensual/contenido/2005/01/09/hoy/negocios/102717.html

For the buyer, this translates into having to repay a mortage loan at interest rates 3.2% to 4% less than what the government considers as the "Reference Rate", under Law 65 of October 29, 2003 , as long as the home is the main residence of the borrower and its purchase value does not exceed US$62,500.

What is more, if the home has a purchase value below US$16,000, the final interest rate to the borrower can be of 2%. http://www.martesfinanciero.com/history/2005/07/19/columnas/nacional_3.html

For example, the government Superintendencia sets the Reference Rate (TRM) at 8.25% http://www.pa-digital.com.pa/archive/11122003/finance01_slim.html A bank would get a 4% credit rate for financing the purchase ofa US$62,000 home, so the borrower would repay at a 4.25% rate. For a US$24,000 home, the bank gets a 5% credit, so the borower gets a 3.25% rate loan.

With the current TRM at 6.5% under Memo CFL 3-85 2-2008 you can use this formula to calculate the final loan rate:

TRM - Bank Tax Credit points = Final Loan Rate


This means that the law does NOT provide benefits if:
1) The home was purchased for more than US$62,500 (this may get you a 700 sq. foot apartment or studio in the banking area, or a 2 bedroom house in a working-class commuter town),
2) The borrower expects to buy the property under a corporation,
3) The borrower already has more than 1 home under his/her own name.
4) The borrower is a foreigner buying a home to apply for a Solvency Visa (which requires an US$80,000 home)

Developers are recommending to increase the cap for benefits to homes up to US$85,000, since the US$62,500 limit was set under the first preferential interest rate law 3 of 1985. This benefit is regularly renewed thanks to the construction lobby, although many developers and real estate agent are expected to push buyers into signing the dotted line with the story that interest rates will go up.

If anybody misses the 2008 deadline, it is a good thing to know that the 5-year laws have been renewed like clockwork under Laws 3/85, 11/90, 5/94, 28/95, 30/99, 50/99 and 65/2003.

Changes to Immigration and Banking laws approved

Just when the media made us think the 2008 Immigration draft law was dead, local dailies announce that the Cabinet indeed approved the Immigration law as well as changes to the 1998 Banking Law Decree.

The text should be posted online next week in the Official Gazette and from that date it will be in force.

It remains to be seen if recommendations sent by the Bar Association and other groups were included in the final approved text. The National Board of Migrants and Refugees (MENAMIRE) wants the President to veto it, but that is not possible with a Law Decree from the Cabinet. MENAMIRE says the law only allows those with a bank account to stay in the country.

The Presidency website provides us picture of the lovely Cabinet meeting with accompanying breakfast.

Books on Panama legal stuff

Before learning about blogging, My Panama Lawyer used to write a lot of articles for foreign publications. They are available from these Amazon links:

Enforcement of International Property Protection between Mexico and the United States (Fordham Intellectual Property Media & Entertainment Law Journal , Vol. V, No. 1, 1994). Panama Section of "International Intellectual Property Law" (John Wiley & Sons, 1995).
Panama Section of "International Taxation of Low-Tax Transactions" (BNAI, 1996).
Panama Section of "International Banking Law and Regulation" (Oceana, 2000).
Panama Section of Legal Systems of the World: A Political, Social, and Cultural Encyclopedia (ABC-Clio, 2002).
Panama Section of Trademark Practice and Forms (compiled by Stephan Kinsella).
Articles on Latin American business law in “Latin American Law and Business Report” and “Inter-American Trade Report”.
. .

30-day visa for US citizens is alive and well

As of February 6, the 30-day visa for US tourists entering the country seems to be alive but ailing. After the anti-gang law which reduced the duration of tourist visas and vehement denials by the tourism czar, our clients report that they have are being told upon entry that their tourist visas have a 30-day duration, but when they show up for the Filiacion registration, Immigration turns them away saying that there is "an understanding" that the visa lasts 90 days. The stamp in the right says it all. Go figure!

Visa agreements between Panama and the US are in 2 exchanges of notes:

Reciprocal agreement for gratis nonimmigrant visas.*
Exchange of notes at Panama March 27 and May 22 and 25, 1956. Entered into force June 1, 1956. 7 UST 905; TIAS 3573; 268 UNTS 333.

Agreement modifying the agreement of March 27 and May 22 and 25, 1956 for gratis nonimmigrant visas.*
Exchange of notes at Panama June 14 and 17, 1971. Entered into force June 17, 1971. 22 UST 815; TIAS 7142; 796 UNTS 353.

NOTE * The status of this agreement is under review.

These exchanges of notes allow for granting of multiple-entry tourist visas of up to 48 months. The US government publication "Treaties in Force" lists them as "under review" but the 1977 Panama Canal Treaties ratified their validity. Their text is available in the UN Treaty Series website or by email from this blog.

The 2008 draft Immigration law - if enacted - will provide that tourist visas have a duration of 30 days, renewable for 60 more days.

Hot air and second passports

Much is advertised on the Internet about how easy it is to get a second passport from countries such as Panama, Cape Verde, Belize and others. The second passport frenzy had its high with the Chinese takeover of Hong Kong - when thousands of Hongkongese sought alternatives to the hard-to-get British Overseas and Peoples' Republic passport - and hit a brick wall with the post-9-11 world.

The current bottom line is:

1) Panama has never had a legal "second passport" based on investments. The Rentista visa granted to bank accountholders allows them to have an identification booklet which has the same blue cover as a passport but the pages inside specify that the holder has no Panama citizenship. It does not even have the bar codes of a normal Panama passport.

2) The only way to get a legal Panama passport is to undergo the naturalization process (after being a permanent resident for 3 to 5 years - not a pensionado), being born in Panama soil or from a Panamanian parent. Thousands of US citizens were born in Panama during the 90 years of the Canal Zone and qualify for Panama citizenship.

3) Currently, the only countries with officially sanctioned economic citizenship programs granting a second passport are Austria, the Commonwealth of Dominica, and the Federation of St. Kitts/Nevis. Section § 10 (6) of the Austrian Citizenship Act program requires investing millions of euros in an Austrian business, with no guarantee that a passport will be forthcoming. In contrast, when you apply for a second passport in either Dominica or St. Kitts/Nevis, you make the necessary US$75K+ or US$350K+ investment only after you receive approval for your application and background documents.

3) Descendants of countries with high-emigration rates, such as Spain, Italy, Ireland, Israel and others, can apply for citizenship and passport by showing the birth certificate of an ancestor from said country. Ironically, those countries have now high-immigration rates in part thanks to said passports. The duty to provide military service may be a concern depending on the country.

4) An interesting alternative being promoted are passports with Dominican Republic citizenship, granted after only 1 year of residence. A very important negative is that Dominican citizens are subject to many restrictions when travelling.

5) As explained in Afroyim v. Rusk and other court rulings, US citizens generally do not lose their citizenship when acquiring a second passport.

5) Second passports from other countries are likely to be stolen (thousands of Panama passports "lost" before the 1989 US invasion), expired or belong to fairy tale domains such as Dominion of Melchidzek, Anjouan and others. The ‘World Passport’ from the ‘World Government of World Citizens’ in 14th Street, Washington is a scam.

This can never be the last word on second passports as countries regularly change their laws and are subject to international pressure to revoke these documents.