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The “beef” of the Law 24 incentives are tax exonerations for all aspects of the forestry activity from land purchase to equipment, exemptions on earned income from lumber sales, and even a reforestation visa for a minimum $40,000 investment.  Coupled with the fact that the land itself is often highly attractive and reasonably priced (particularly in such places as the Bocas del Toro islands, and the highlands of David in and around Boquete/Volcán), the picture starts looking less like a balance sheet and more like a postcard of a tree farm.  Lest the picture grow too rosy, however, a reminder of a hard fact: the profits to be garnered from growing hardwood trees are excellent, but are longer term.  The laurel tree, for example, is fully mature in 8-10 years; teak can be harvested for profits beginning in year 12. On the plus side, the climates for growing trees in Panamá are some of the most ideal to be found anywhere outside Southeast Asia.  Panamá enjoys a politcally-stable democracy where the US dollar is the established currency.  It also has a Caribbean island group, an archipelago 45 miles long by 15 miles wide, where growing conditions for trees are ideal, and there are no hurricanes.  In the highlands, where there are distinctive seasons, teak is thriving (as well as the coffee and varied produce for which the region is famous) as many Panamanians have already discovered.

Growing hardwood trees, whether in reforestation or plantation projects, has always been an attractive eco-profitable business.  Today in Panamá, where the country’s Law 24 has been offering incentives in this sector since 1992, forestry activity has been spurred to new heights as more people discover the attractions of what this law is offering.

Access for future shipping of the product is made easy from deep-water ports on both coasts: Almirante on the Caribbean where Chiquita’s European ships call in; Pedregal on the Pacific, and also via the Panamá Canal, the world’s shipping crossroads.  Road access and infrastructure throughout the country is excellent owing to the years and millions of US dollars that have been spent here since the inception of the Canal.  Panamá city is also a well-established off-shore banking center, and cosmopolitan metropolis where most all US goods and services can be found or accessed easily. 

Still sound suspiciously like Nirvana?  For many investors who have opted to grow trees, there is tremendous confidence and excitement about investing here. 

Says John Hubbard, international business man from Massachusetts: “You have to come in person to see and believe how fast things grow here.  You put a stick in the ground and there are leaves on it in a week. 

The climate is perfect for growing trees.”  On why he chose Panamá, he says: “The US dollar is extremely practical and avoids worries about devaluation.  Also the labor force is well suited to this type of activity and very economical to employ.”  On returns for money invested, he states: “The investment is viable, though longer term.  When the profits come, they will be very rewarding." 

Law 24 Incentives 

The goal behind Law 24 is simple: to encourage private investment in reforestation to renovate the once-rich natural resource of Panamá's tropical forests which are decreasing at the rate of 79,000 hectares (195,130 acres) per year  The agency designated with overseeing these projects is ANAM (National Authority of the Environment) and it is ANAM who accepts and registers these projects throughout the country. 

This is an outline of what is offered: 

1). All wood that is harvested within the project (the terms of "harvesting" are spelled out in the management plan provided by the reforestry expert) are completely exonerated from any and all taxes, including export taxes, for 25 years.  All capital gains are tax exempt and all direct and indirect investment in the business are 100% deductible from income within Panamá. 

2) Equipment, which can include vehicles, heavy equipment, and any other direct investment into the reforestation project are exempt, and  can be brought into the country tax-free.

3) A reforestation visa can be obtained with proof of the project's existence and receipts equal to a $40,000 investment in the project.  (This includes the purchase of the land, itself).  This visa is particularly attractive for those who want to live in Panamá year 'round and who do not qualify for a "retiree's visa" and want to avoid the lengthy process of obtaining an "investor's visa".

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