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In August, 2004, Panama celebrated the 90th anniversary of the opening of its world famous canal, and if the country can be described as South America's gateway, then its canal can most certainly be called the continent's waterway. The canal's fortunes continue to improve and up to 38 large ships pass through the canal each day and its operations contribute 10% of GDP. It is estimated, in fact, that about one-third of GDP is derived from canal-related revenues. The country’s shipping registry is the world’s largest (in number of ships). Panama has also continued to improve its democratic credentials. Gone are the days described in 1868 by Mark Twain when he travelled on the Panama railway and wrote about “the Isthmus people.” Twain said that there was a revolution in Central America “every time the moon changes.” “All you have to do is to get out in the street…… and give a whoop, and the thing is done.” In 2004, Martín Torrijos was appointed the new President of Panama after elections which were seen by outside observers as having been free and fair. Voter turnout was about 80% and the elections passed without incident. Not even a whoop.

One thing that Panama shares with readers of this web page is a keen interest in the offshore financial services landscape. Panama has had an offshore industry for several decades and today is Latin America’s largest banking centre (in number of banks). The jurisdiction has not escaped scrutiny by the Organisation for Economic Co-operation and Development that has established the Global Forum on Taxation in order to achieve fair tax competition world-wide. Self-interest and contradictory rules, however, have meant that few resolutions and little progress have been made at any forum meetings and it was Dean William R. Inge who once commented that “it is useless for the sheep to pass resolutions in favour of vegetarianism while the wolf remains of a different opinion”. In this instance, the OECD has more than one wolf, I suspect, to deal with.

Panama, together with many other offshore financial services centres, has agreed with the OECD that, in principle, it will work towards an even-handed international tax system. But Panama has been lumped in with those jurisdictions that are, in my experience as both a regulator and practitioner offshore, little better than manufactured tax havens with designer tax advantages when, by comparison, Panama's economic development in the field of international services is, as its government puts it, “a consequence of history and not of initiatives to help evade taxes in other parts of the world”. In Panama’s opinion, the OECD’S initiative started out badly with “the threat of economic sanctions disguised as defensive measures”. So although Panama will continue in good faith as a member of the OECD’s Global Forum on Taxation, its government has said that this willingness “should not be interpreted as Panama’s resignation to (sic) its sovereign right to conduct its international economic agenda” and that if even-handedness is not applied then the conditions will not exist “in order to develop effective commitments between the OECD and Panama”.

In September, 2007, the project to widen the canal to meet commercial demand commenced. Whether the gap between the OECD and “the Isthmus people” will be widened remains to be seen, but what is beyond doubt is that the country is widening its international appeal, based on economic and other indicators.

Combine the opportunities in Panama with our expertise. We subscribe to Ralph Waldo Emerson's observation: "If a man write a better book, preach a better sermon, or make a better mouse-trap than his neighbour, 'though he build his house in the woods, the world will make a beaten path to his door". Knock on our door for superlative service. We ensure that our workload is commensurate with the work force available to deal with it, so you will understand when I tell you that we’re losing business but we don’t mind. We offer knowledge, efficiency and reliability with a proven track record of over 25 years in business and over 60 years combined experience between the two partners. Please visit the rest of our website to learn more about us, what we offer and our views and observations in relation to offshore financial services. After reviewing our menu, please complete and e-mail our confidential Information Request for further assistance. Remember when you’re telephoning us to first dial your country’s international dialling code (011 in the case of the United States, for example) before our country code (507).

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