Peruvian Investors Look To Panama
On July 28, 2021 Pedro Castillo was inaugurated as the next president of Peru in a closely contested election. Castillo is a member of the left leaning Free Peru party, and has alternatively been described as an agrarian leftist, populist and socialist by political analysts. His meteoric rise to power has shaken Peru’s business and political elite, and has left many Peruvians fearing a socialist take over will lead to an inevitable economic decline similar to Venezuela. Whether such fears are overblown will take a long time to determine. What is certain is that the current economic and political situation in the country has thousands of Peruvians searching for alternatives.
For many middle and upper middle class Peruvians, that alternative is Panama. With the highest foreign investment rate and GDP per capita in Latin-America, fast growing economy, accessible immigration programs and political stability, it’s no surprise that many Latin American countries are looking to create and expand their economic links with Panama. Peru is just the latest to be making investment waves in Panama.
Peru is a long-time commercial partner of Panama and one of the top 10 users of the Panama Canal. The Free Trade Agreement signed with Peru in 2012 covers 60% of Panama’s exports to the country. Panama’s position as the hub of hubs continues to benefit both the country, and global investors placing capital here, including Peruvians.
Seizing the opportunity, Panama representatives went on tour last month to Lima, pitching Panama to investors and business groups. Their aim was to create an alliance between their governments and the private sector for joint investment. During the “Panama Day (Connecting with Panama)” event, Chamber of Commerce president José Ramón Icaza met with representatives from over 50 companies. He highlighted Panama’s position as a country that has created laws specifically to attract foreign investment across various industries. Panama Day attendees included representatives from multiple industries, including tourism, logistics, construction, and real estate.
Further fomenting closer ties between the countries, Panama added Peru to its list of Friendly Nations. Consequently, Peruvian nationals can now benefit from the accelerated permanent residency that this program offers. The Friendly Nations residency is one of Panama’s most sought-after options, with expats receiving their permanent residency with an investment of only $200,000 in real estate. As a result of these policies and Peru’s current economic and political situation, 2021 saw a dramatic increase of foreign investment from the country, much of which took the form of investments in real estate from Peruvians planning to relocate to Panama now or in the near future.
Panama is making every effort to attract Peruvian investors to the isthmus, and the Panama real estate sector is already feeling the impact. Philip James Realty Corp. has been regularly attending Peruvian clients for much of 2021. Combined with similar waves of immigration from other Latin American nations, including Chile, Argentina and Mexico, and increasing interest from investors in North America and Europe, 2022 is increasingly looking like the year when Panama’s real estate sector may finally flip back to a seller’s market.
