A come-back for Howard?
The old airport of Howard could be operative again. The new director of the Civil Aeronautics Authority, Eustacio Fábrega, proposed maintaining the airport of Howard at an international category and as an alternative, in the case of a critical situation at the main terminal of Tocumen.

Preferential interest rates
Increasing the ceiling of the preferential interest rates for new residences with a value of up to US$80,000, is one of the proposals that will be presented by the private sector to the government. At this moment, the Law of Preferential Interest applies only to the houses with a minimum value of US$25,000 to a maximum of US$62,500

Continental Airlines leaves Copa
Continental Airlines Inc. announced the collection of US$156-million from the sale of part of its shares in the consortium that controls the company COPA Airlines of Panama and it said that it has destined almost half to its pension scheme. Continental said that it had sold 7.5 million the 11.9 million shares that it had in Copa Holdings S.A. The stock market quotes of Copa Holdings in the United States dropped US$0.19 to US$23.01, while the shares of Continental rose US$0.74 cents, or 2.5% to US$30.24 in the evening session of the New York Stock Exchange.

High tides
Recently there have been abnormal high tides on the Panamanian Pacific coast. The National System of Civil Protection (SINAPROC) announced tides that reached to 15.4 feet in height, and caused damage, warning of more to come, and reaching 17 feet.

Yellow cabs
The National Chamber of Transport (CANATRA), requested the Transit and Land Transport Authority to annul the resolution for taxis to paint their units yellow. The Secretary of Defense of CANATRA, Hector Vargas, said that these operators are affected by the constant cost rises and do not have the money for this purpose.

New city transport system?
Sixteen business participated in the studies, designs, construction and application of the integrated system of mass transport for the capital city, which is projected for approximately five years. The deputy director of the Transit and Land Transport Authority (ATTT), Ovigildo Herrera, indicated that local as international businesses are actively participating and that the compensations expected by some bus operating sectors would depend on the company that wins.

No changes on coat of arms
The high costs of making the changes to all the existing coat or arms nationally and internationally was the reason given by the Executive against the government Bill that would have the Harpy eagle replace the Imperial eagle on all Panamanian coast of arms. The plan was rejected and returned to the National Assembly to decide the future of the proposal. The suggested change generated contrary opinions by the relatives of the creator of the coast of arms Nicanor Villalaz, as well as by other local historians.

The Rayo Montaño case
The newspaper La Prensa announced that a request to the Electoral Tribunal to know if the Colombian drug trafficker Pablo Rayo Montaño donated to some of the presidential candidates in 1999 ó 2004 was denied. The Tribunal called the request "inproper".

Noriega
The release of former general, Manuel Antonio Noriega from his Miami prison where he has served 17 years of a sentence for drug trafficking has been confirmed by officials of the US Federal Bureau of Prisons for September 2007.

La Merced Church:

The hurch's façade was removed from Old Panama and re-assembled by slaves in its present location, in the San Felipe district.

Someone should submit La Merced Church, in the historic district of San Felipe, to the Guiness Book of Records as the luckiest building in the world.

The church has stood in its present location since 1673, but it is the resurrection of the La Merced church located in Old Panama, some ten kilometers to the east.

The original church in Old Panama was built in the 16th century and survived a number of fires and earthquakes before the final plundering of the city by English privateer, Sir Henry Morgan, in 1671. La Merced, which was one of the few buildings not affected by the subsequent fire (ordered by the city’s governor, Juan Pérez de Guzmán) served as headquarters of Morgan’s forces during their month-long stay.

When Spanish authorities ordered the relocation of the city to present-day San Felipe, black slaves underwent the painstaking task of removing La Merced’s baroque-style façade stone by stone to re-assemble it in its present location, where it has survived the "small fire" and "big fires",which almost destroyed San Felipe in the 18th century, as well as the 1880 earthquake.

The first La Merced church has an enormous historic significance. It was there that, in 1531 Francisco Pizzarro and Diego de Almagro took Holy Communion before setting sail to conquer the rich Inca empire, in Perú.

The Old Panama Ruins
The original city of Panama, built by Spanish conquistador Pedro Arias de Avila in 1519, was the first European settlement the Pacific coast of the Americas. It was attacked and plundered by English privateer Sir Henry Morgan in 1671.

Panama City’s Old Quarter
The "new" city built by the Spanish after the destruction of Old Panama encompasses over 300 years of Panamanian history. Within its premises, tourists will find beautiful plazas, ruins of colonial forts and magnificent churches dating from the 16th century. The area, along with the Old Panama ruins, was declared a World Heritage Site by UNESCO in 1996.

The Panama Canal Museum
Situated in the Old Quarter, the Interoceanic Canal Museum offers tourists the opportunity to learn about the complete history of the famous waterway as well as the technological, political and scientific factors that changed the world as a consequence of the Canal’s construction. The museum opens Tuesday through Sunday, from 9:30 a.m. to 5:30 p.m.

Panama Canal Museum.

The Panama Canal
The Panama Canal opened to the world in 1914. It is a giant, 50-mile-long ditch across the Isthmus of Panama. Thanks to a system of locks, the Canal allows ships of all sizes to transit from the Atlantic to the Pacific and versa in approximately 8 hours.

The Miraflores Locks Visitors’ Center
This new, four-story center located at the Canal’s Miraflores Locks offers all the information a visitor needs to know about the world’s most famous waterway. It features a museum, a projection room, a cafeteria and a nice restaurant-bar offering superb vistas of the Panama Canal. Expert, bilingual guides are always at hand to help you.

China Town
Located in the city’s Old Quarter, Panama’s China Town is a tribute to one of the country’s most important and prosperous ethnic groups.

Mi Pueblito Tourist Center
This center, situated at the foot of Ancon Hill, is a replica of three early-20th century towns –a tribute to Panama’s three main ethnic groups (Hispanic, Native American and African.) Colorful folklore dance performances take place there every weekend.

The Panama Canal Administration Building
Officially inaugurated on July 15, 1914 (exactly one month before the opening of the Canal itself) this building harbors the fascinating historic legacy of the waterway. Built on the summit of a hill overlooking the suburb of Balboa, the Administration Building features an impressive rotunda adorned with frescoes depicting scenes of the construction of the waterway, complemented with majestic columns and marble floors. According to original records, the building represented an investment of US$879,000 (1914 dollars.)

The Bridge of the Americas
Visitors on the Amador Causeway, on the Pacific entrance of the Canal, can enjoy a complete view of the Bridge of the Americas, which links Panama City to the western part of the country and to Central and North America. It was built by the U.S. government in the 1960’s.

The Amador Causeway
Located on the Pacific terminus of the Canal, the Amador Causeway is a strip of land that thrusts in to the Pacific, linking three islands in the Bay of Panama. In addition to offering superb vistas of the Canal and Panama City, the causeway boasts numerous stores, boutiques, restaurants, bars, hotels, a marina and several kilometers of road for jogging, biking and skating. Perfect for enjoying a romantic sunset with your better half.

Summit Gardens
Located within Soberanía National Park, Summit Gardens is recommended for anybody who loves the great outdoors. Ideal for campers and nature lovers, the park includes a small zoo, nature trails a special center dedicated to the Harpy Eagle (Panama’s national bird) and countless species of flora from all parts of the tropical world.

Old Panama’s Visitors’ Center
Situated next to the Old Panama ruins, the center provides complete tourist information for visitors, as well as a museum harboring fascinating colonial artifacts found at the ruins during recent archaeological excavations.

Old Panama.

Canopy Tower
Nature enthusiasts will enjoy visiting this exclusive eco-resort, nestled in the green forests surrounding the Panama Canal (Soberanía National Park.) It is a paradise for birdwatchers.

A townhouse on Calle 42, Bella Vista.

Many Panamanians find it hard to believe that what today encompasses Panama City's ever-rising hotel and financial district was the heart of one of the most peaceful residential suburbs in Latin America only 40 years ago.

Visitors exploring the trendy nightlife sector between Calle Uruguay and Calle 50, for example, will find that, right next to the area's impressive skyscrapers, many restaurants and boutiques are, in fact, remodeled houses featuring red-tile roofs, outer walls adorned with river-and-cut stones and ample, arched windows.

A walkabout along the tree-lined streets west of Avenida Federico Boyd will reveal a larger number of these unique dwellings, some of which are still inhabited, while others now welcome the clients of doctors, lawyers and accountants.

When giving directions, Panamanians often describe Bella Vista's old town houses and mansions as "colonial". The truth is that what some call "Bella Vista-style" architecture is actually a mixture of styles. Its most visible influence comes from the old Spanish “missions” of California, as well as the unpretentious, tropical housing styles of the former Panama Canal Zone and adaptations of neo-classical architecture.

In the mindset of city dwellers ages 50 or more, Bella Vista represents grandeur and sophistication. It was the seat of the country's well-to-do families which, sometime after 1915, abandoned their century-old colonial mansions along the narrow streets of San Felipe and settled between the neighborhood of La Exposición and Playa Peña Prieta, a popular beach which now lies beneath the asphalt of Avenida Balboa.

An apartment complex on Calle Colombia.

The neighborhood got its name from the U.S.-owned construction company that deve-loped the area along ample, tree-lined avenues and parks extending all the way to La Cresta hill, which overlooked Panama Bay.

Bella Vista became a corregimiento (one of the city's main petit districts) in 1930, and expanded to El Cangrejo and Campo Alegre, which presently encompass the city's financial district. Although clean and quiet, Bella Vista also had its share of life with trendy restaurants along Vía España. Movie-goers awaited the international box office hits of the day with deluxe gala premieres at Teatro Lux and Teatro Bella Vista, where the first, full-length Panamanian-made film was released over 40 years ago (The Visitor will publish a story on lost Panamanian films in its coming issues.)

As the city rapidly became an international banking center in the 1970's and '80's, Bella Vista's population moved to the high rises of Punta Paitilla.

A mixture of old and new, today's Bella Vista is facing an interesting dilema. Plenty of high-rise apartment buildings, which are attracting expats and retirees to Panama, are being built in the area, and as Bella Vista's elegant mansions are being demolished, one by one. Will they disappear altogether?

Many Bella Vista townhouses have been transformed into businesses and office complexes.

A beautiful mansion on Calle 41.

Museo de la Esmeralda, the only museum/boutique specialized in emeralds in Central America, has a new address. It is now located on Plaza Catedral, across from the Metropolitan Cathedral in San Felipe, Panama City’s old quarter.

The museum, the Panamanian branch of a Colombian-owned chain with stores in Cartagena and Spain, also doubles as a jewelry store and boasts a replica of Colombia's three largest emerald mines (Muzo, Coscuez and Chivor), where visitors learn about the history, chemical composition and the extraction process of the gem.

The jewelry store has a wide selection of polished or unpolished gems, which can be purchased individually or as part of elaborate rings, necklaces, bracelets or earrings, made of pure gold or fine silver. Prices range from as as low as $3.00 to prices worth several thousands of dollars.

For more intformation, send an e-mail to: info@museodelaesmeralda.com

Starting a Business:

By Chronicle Staff
(Reproduced by the Latin American Chronicle)

It takes seven procedures and 19 days to start a business in Panama. By comparison, it takes 12 procedures and 203 days to start a business in Haiti. The average for Latin America is 11 procedures and 70 days, according to a new World Bank report, Doing Business in 2005: Removing Obstacles to Growth.

However, measured in terms of cost (as percent of income per capita), Chile had the lowest cost (10 percent), while Haiti again fared worst (176.1 percent). In terms of minimum capital (as percent of income per capita), both Panama and Chile were among nine countries in Latin America with no costs, while Haiti had the highest cost (182.4 percent), according to the report, which was cosponsored by the International Finance Corporation, the private sector lending arm of the World Bank Group.

Panama didn't do too well on the ranking of hiring and firing, though. Chile had the lowest (and best) score of all countries in Latin America in terms of difficulty in hiring, while Uruguay, Costa Rica and Bolivia had the best score in terms of firing flexibility. Panama, along with Venezuela, had the most rigid regulations for hiring, while it was among the three worst countries in terms of difficulties in firing employees, the report shows.

In terms of firing costs, as measured by weeks, Nicaragua was best (24 weeks) and Guatemala worst (170 weeks).

Nicaragua was also best when it came to enforcing contracts. It only takes 18 procedures and 155 days to enforce a contract in the Central American nation. In comparison, it takes 47 procedures in Bolivia and a whopping 1,459 days in Guatemala. Measured by cost (as a percent of debt), Chile fared best (10.4 percent) and Costa Rica worst (41.2 percent).

By Juan F. Pardini
President
BusinessPanama Group
www.BusinessPanama.com

During recent years, Panama has become a top destination for tourists, investors and retirees from all over the world. Most retirees or "pensionados" come looking for more friendly, secure and affordable communities, such as Boquete, Volcan, the Caribbean islands of Bocas del Toro, the Pacific beaches and, of course, cosmopolitan Panama City.

Incentives for tourism investments were first granted by means of Law 8 of June 14, 1994. The enactment of this law began the process of branding Panama as a tourism destination, attracting investors and tourists alike, but mainly in the hospitality sector.

In the last few years, resort residential communities have taken off and entrepreneurs have identified islands such as the Archipelago of Bocas del Toro to develop their project, but found that most of the lands in these areas were yet to be titled, thus making the process of installing their project more difficult.

As early as 2003, a group of foreign and Panamanian lawyers and entrepreneurs identified serious problems with certain land transactions known as "rights of possession" and started lobbying with Panamanian authorities and legislators to enact legislation to regulate land tenure and establish clear rules of the game to title land for tourism projects and private citizens. The government became aware of the need for second-home or retirement investors to obtain registered title to the lands where their projects are to be developed and secure legal stability for their investments.

With this in mind, the Cadastral Land Office (locally known as Catastro), headed by Benjamín Colamarco, promoted a bill early in 2005 which was approved and enacted by the Legislative Assembly as Law No. 2 of January 7, 2006 "regulating concessions for tourism investment and the sale of island territory for purposes of tourism development and other provisions" (and an Executive Decree containing the enabling regulations for Law No. 2 to be enacted soon), also referred herein as the "Island Law". This law provides legal security, clear procedures and continuity to the efforts to promote tourism investments in Panama, as set forth in Law No. 8 of 1994.

The day that President Martín Torrijos stamped his signature to Law 2 in the island of Bocas del Toro, an initial group of seven projects for an estimated amount of US$732 million were unveiled. Now there are other projects in the pipeline in the Pearl, Veraguas and Paridas islands, demonstrating that investors were awaiting this law.

Panamanian law distinguishes between two kinds of property: (a) private or titled property, and (b) public or state-owned property.

Titled property is that whose ownership, area, value, boundaries and other details are dully recorded at the Public Registry of Panama. The Public Registry of Panama contains a centralized record system of all titled property in the Republic of Panama.

State-owned property is all land and territories owned by the Republic of Panama, which can be used by a private person (individual or company) if an administrative concession has been granted over the same for a limited period of time. State-owned properties can also be exploited or used for agricultural purposes by persons in the event a procession rights certificate has been granted by the Agrarian Reform of the Ministry of Agriculture. Rights of possession (in this article referred to as "RoPs") have been recognized by local authorities such as municipalities and corregimientos (municipal sub-divisions.) Law No. 2 of 2006 acknowledges RoPs granted by any of the authorities identified above, subject to the process established for the issuance of concessions.

Law No. 2 of 2006 offers tourism investors the opportunity to either obtain a long-term concession or acquire and title the property where they will undertake their projects.

CONCESSIONS
Concessions can be defined as leasehold agreements between the Ministry of Economy and Finance through the Cadastral Office, a government institution in charge of the management of all state-owned property, and private citizens or companies for a determined period of time. Once the concession is granted the person awarded the concession must pay an agreed lease amount to the Ministry of Economy and Finance.

Law No. 2 provides the following additional characteristics for concessions over areas located in the tourism zones as defined by the Ministry of Tourism, whether located on islands, coastal lands and other properties of the State, to be granted for tourism projects:

Longer concession periods granted for use of state-owned lands:

Law No. 2 of 2006 establishes concession periods of 40 years with the option for an extension of 30 years.

• There also exists the possibility of a concession for 60 years, with an extension for an additional 30 years.
• The length of the concession will depend on the amount of the investment and potential for generation of employment, subject to the parameters to be set by the Ministry of Economics and Finance.
• The granting of these concessions will be awarded by means of a public bidding procedure as it will be more fully detailed in the enabling regulations.

An express procedure for the procurement of concessions over lands to be used for tourism projects.

All improvements and buildings constructed over concession areas may be titled and recorded in the Public Registry. This will facilitate procurement of financing for the investors as well as the option to sell, lease, transfer, mortgage or in any other manner make use of the concession granted to him and the improvements attached thereon.

Law No. 2 of 2006 creates an "Express Window" ("Ventanilla Unica") within the Cadastral Office of the Ministry of Economics and Finance in charge of receiving all applications as well as processing all approvals and authorizations required for concessions. This special department will have representatives from all entities whose approval is necessary to complete the concession contract and start a project. To speed up project start-up, and once the developer present all basic requirements, this Express Window department may issue a provisional authorization to begin operations, while the developer complete all remaining requirements for the permanent concession.

Among the requirements to be provided to the Ministry of Economics and Finance to obtain the concessions created by this law are:

• Preliminary development master plan of the property.
• Project budget.
• Development program and execution schedule.
• Evidence of financial capability of the petitioner.
• Certificate issued by the Ministry of Tourism certifying that the requested area is located within a tourism development zone.
• Approved Environmental Impact Study.
• Certificate that the petitioner is registered before the Tourism Enterprise Registry of the Ministry of Tourism.
• Performance bond for 10% of the value of projected works, which will expire once the improvements are recorded.

DIRECT PURCHASE
Islands, whose ownership, according to the Constitution of Panama, up to now, was limited to nationals, have always been an area of special interest for tourism related investments.

Law No. 2 of 2006 provides the following incentives to foreign or national individuals or corporations interested in purchasing island territory for developing a tourism project:

• Island territory may be sold for tourism related purposes, provided an affidavit is granted, confirming the purpose of the investment and the number of jobs to be created.
  It is important to repeat that no more than 50% of an island can be sold to foreigners or foreign interests in a corporation. The sale of island territory must be submitted to a public bidding procedure as it will be more fully detailed in the enabling regulations and obtain the approval of the Ministry of Economics and Finance. However, projects over RoPs or already initiated or undertaken on an island before the enactment of Law 2 may request direct sale of the island property.
• Individuals or corporations legally occupying island territory will have the right to obtain concession of the same and be able to transfer it to a third party.

The contract for purchase of island territory must include at least the following:

• Description of the land granted for sale, including area, measures and boundaries.
• Value of the land object of the sale. The price will not be less than the average of the appraisals made by the Ministry of Economics and Finance and the Cadastral Office.
• Estimated amount and details of the investment, including the amount to be invested in utilities and infrastructure for the project.
• Environmental Impact Study and Mitigation Plan.
• Complete description of the project in its definite phase, including investment amounts and execution term for the development of the project.
• Description of beach easements, which can be no less than 22 meters
• Precise description of the public domain assets located within the island territory.
• A bond of at least 10% of the value of the contract and that will be valid during the term of the project. This bond will expire proportionally as the improvements are recorded.

All projects within these areas must comply with the territorial zoning master plan to be prepared by government authorities. Until this master plan is approved, each project may submit its own zoning plan which will be processed and approved through the Express Window.

The same "Express Window" ("Ventanilla Unica") within the Cadastral Office of the Ministry of Economics and Finance will be in charge of receiving all applications as well as processing all approvals and authorizations required for direct purchases of island territories.

RESTRICTIONS
Due to the nature of islands, and for sovereign protection purposes, the following restrictions have been set for these special tourism areas:

• They cannot be located less than 10 kilometers from the borders.
• They must not be designated as historical patrimony or national patrimony.
• They, due to their characteristics, cannot be dedicated to the conservation of the environment or for forest or scientific purposes.
• They cannot be part of Indian territory.
  The sale of these special tourism areas cannot exceed 50% of the total territory of each island and ownership cannot be transferred to another State. Tourism projects pursuant to Law 2 cannot exceed 30% of the total territory of an island.

As an effort for nature conservancy, the following limitations have been set for certain areas:

• The construction over coral formations is forbidden as well as any activity that may cause the death or destruction of their ecosystem.
• The cutting, use or commerce of swamp forests, their products, parts or derived products is forbidden, except for tourism projects after the approval of the respective environmental impact study.

As a final note regarding restrictions, concessions and sale of beachfront property may only be granted up to 22 meters as of the line of high tide. The area of 10 meters as of the line of high tide is considered beachfront and cannot be granted in concession under any circumstances. The area of 12 meters as of the beachfront can be granted in concession as a coastal easement.

SPECIAL SITUATIONS
Law No. 2 of 2006 cover a special procedure for individuals domiciled in an area, who have kept a permanent and uninterrupted possession of national island property, for at least 2 years before the enactment of the law, and prove that they have used such property for their own home or agricultural purposes.

These persons will be granted a concession for a period of 90 years without having to participate in a public bid process, plus not having to comply with the requirement of posting a bond and, being exempted from payment of the concession lease.

A corporation that properly purchases the RoPs from an individual resident in the area who proves that he complied with the requirements of Law 2 will be subrogated in the rights of such person for purposes of obtaining the concession.

Another special situation set forth in Law No. 2 of 2006 is the obligation of concessionaires and investors to hire non-skilled local personnel from the area during the construction of the project.

2ND HOME & VACATIONAL HOUSING
In an additional effort to promote residential tourism investments in Panama, Law No. 2 also provides incentives for "Vacational or Permanent Residential Units". The purpose for this incentive is to promote the development of vacation and retirement homes or buildings, which may be built over concession areas on islands or coastlands, provided they are located within a tourism development zone as defined by the government and only one parcel per petitioner. These projects additionally will enjoy the incentives and benefits of Law 8 of 1994. Enabling regulations will be enacted to provide rules for the size of the parcel, costs of constructions and improvements over the same.

CONCLUSIONS
Law No. 2 of 2006 confirms the decision of the Government of Panama to support, promote and grant more legal security to tourism investments plus an orderly development and a better use of the island and coastal resources of Panama. The implementation of this Law No. 2 of 2006 will definitely result in benefits and profits for both the tourism industry and the country of Panama and its people.