With the End of October and Halloween in Boquete the holiday season comes marching in. If this is your first year in Panama get ready for the party.Nothing much gets done in November and December except parades, fiestas and celebrations of all types.
If you live in Bajo Boquete and do not enjoy long days and nights of music, better find the ear plugs soon. If you like a party you are in the right place.

Do NOT complain about the music, these celebrations are very much the culture of Panama.

If you enjoy a parade,these are the DATES

November 3, November 4,  and the REALLY big one – November 28, rain or shine.

Here are the official HOLIDAY DATES for the season-

• November 1 – Children’s Day
• November 2 -All Souls’ Day ( No Alcohol sales)
• November 3 –  Anniversary of Separation from Colombia (Parade)
• November 4 –  Flag Day ( Parade)
• November 5 -  Colon Day
• November 10 – Anniversary of the First Call for Independence from Spain ( Parade)
• November 28 – Anniversary of Independence from Spain (REALLY BIG parade!)
• December 8 – Mother’s Day, Major holiday in Panama!!
• December 24 – Christmas Eve
• December 25 – Christmas Day
• December 31- New Year’s Eve

GO FOR IT!   ENJOY YOURSELVES!!

Panamanian law grants reforestation visas based on ownership of a minimum of 5 hectares (about 12.4 acres) of timber land titled in the investor’s name or in the name of a corporation in which the investor has at least a 51% share. Sales contracts for reforestation projects contain two parts: a land purchase contract and a tree and management contract. Once the contract is executed, the visa investor is considered the owner of an independent reforestation project, with a contract in place to manage the timber property through final harvest. Each 5-hectare project in the residency visa applicant’s name must be independently certified by ANAM (Autoridad Nacional del Ambiente, the national environmental authority of Panama) and other government authorities.

Companies that market reforestation visa packages normally do all the obligatory studies and obtain all the certifications needed for the visa applicant to qualify for the residency visa. The essential information is then provided to the applicant’s lawyer. As you compare programs, be sure that there are no additional charges for these services in connection with the visa application process. ?

Selecting a Reforestation Visa Company:

The major differences between reforestation visa companies are the number of hectares of timber that you actually receive and the ongoing cost of managing your reforestation project. Most of the established companies provide good management service, and the trees grow at about the same rate, resulting in roughly the same yield per hectare per year. In the end, all teak properties managed by reputable companies will have about the same value per hectare for the investor. Although yield projections for teak plantations vary, the reality is that plantation teak has been around for over 1000 years and teak is a popular commercial hardwood. Both growth rates and sale prices for logs and lumber are well established.

Be wary of overly optimistic projections as you compare the programs offered by Panama’s reforestation visa companies. Although 20 year and shorter harvest rotations are sometimes advertised and of course sound attractive to prospective investors, the true minimum rotation time frame to produce good quality teak is 25 years. The companies that advertise 20 year rotations do not, in fact, have any 20-year-old trees and have yet to discover that 20 years is not enough time to bring a teak plantation to maturity. For example, rotations in India and Indonesia, which have long histories with plantation teak, run from 25 to 60 years; the longer rotations produce higher volumes per hectare and a better quality wood. Optimum return on investment (ROI) is obtained from a 25 to 30 year rotation.

Pros and Cons of Corporate Ownership of Your Teak Investment: As mentioned previously, Panamanian law specifies a minimum size of 5 hectares for timber plots that are used to qualify the investor for a reforestation visa. Some companies that market reforestation visa packages have found ways to increase their own profits by offering investors smaller-sized properties. These smaller plots are titled to the investor’s Panamanian corporation rather than directly to the investor.

Be wary of this option, since it reduces your ROI and can increase the risk and cost of your teak investment without adding any value. Although corporate ownership can shorten the approval time needed to get your residency visa by a few months, there is a significant down side to owning your teak property through a corporation.

First, you may receive fewer than 5 hectares of timber land for your investment. Second, there are costs associated with owning a Panamanian corporation, including set-up and maintenance fees. These run from $500 to $1200, depending on the reforestation visa company that you select and how the corporation is structured. There is also a net asset tax of 2% of the value of the holdings. This means that you will owe the Panamanian government at least $1,600 per year in taxes even if the government never reappraises the value of your holdings. Keep in mind also that there are costs associated with filing the paperwork to pay your corporate taxes. ?

If you are a U.S. citizen and you own your timber property through a Panamanian corporation, that corporation is deemed a controlled foreign corporation (CFC) in the U.S. There are new and rather rigorous reporting requirements for owning a CFC, which are available online from the IRS and other sources. An accountant in the U.S. will typically charge from $2,000 to $7,000 per year to fill out the forms required by the government, and the penalties for improper reporting can be significant.

Because of reporting requirements, your ownership of the Panamanian corporation that holds the title to your timber property becomes a matter of public record. In addition, you get very little asset protection through this corporate ownership structure.

Over the lifetime of your teak investment, owning your timber land through a Panamanian corporation can add at least $40,000 in net asset taxes to the cost of your investment package.

You can also expect these expenses over the life of the investment held in a Panama Corporation:

•  approximately $12,500 in corporation maintenance costs even if you are a citizen of a country with no CFC reporting requirements,
•  an additional $62,500 for reporting costs to comply with U.S. CFC laws if you are a U.S. citizen.

Having your plot titled in the name of a Panamanian corporation that you control can make the visa application process a bit shorter. However, up to $115,000 is a lot to pay to shorten what can be a six-year process by a few months.

Evaluating Visa Company Management Charges:

 As you evaluate the packages offered by Panama’s reforestation visa companies, you will find that management charges vary greatly. Most companies include management costs for the first few years of the contract in your initial $80,000 investment. From year 6 or from year 10 on, however, you will probably be charged an annual maintenance fee that ranges from a few hundred dollars per hectare to as much as $800 per acre. Since there are about 2.5 acres in a hectare, note whether the management fee in the company’s contract is expressed in hectares or acres to be sure that you are comparing apples to apples.

Some companies collect a percentage of the harvest as their management fee. This is ultimately in your best interest as an investor, because:

•  Your management company has a financial stake in producing the maximum amount of quality wood from your land;
•  Your out-of-pocket expenses are lower.

As with all financial offerings, read the fine print in visa company management contracts carefully. ?

Example 1: 51% Corporate Ownership and an $800/Acre Management Fee: For example, assume that, to qualify for a reforestation visa, you buy a 51% share in a Panamanian corporation that holds the title to 5 hectares of teak property. You also agree to pay an $800 per acre management fee after year 10. In this scenario, you own about 2.5 hectares (a little over 6 acres) of teak property.

This could turn out to be a very expensive proposition. In addition to your initial $80,000 investment, you will have to pay about $115,000 in corporate fees and taxes in Panama and $60,000 in management fees. Your total investment in 2.5 hectares of teak will yield about $260,000 in logs by year 25 of the rotation. Your total cost can be as much as $255,000 leaving a net profit of only $5000 after 25 years.

Example 2: Personal Ownership and a Percentage of the Harvest as the Management Fee: Alternatively, assume that you select a reforestation visa company that sells you 5 hectares of teak land titled in your name and charges you 20% of the harvest as its management fee. You will own 5 hectares of land and will be entitled to the profits from 80% of the harvest (the yield from 4 hectares) through the 25-year rotation. This arrangement will yield about $520,000 in returns from your initial $80,000 investment, for a net profit of approximately $440,000. That return is over 8,800% better than the return in the first example.

When evaluating reforestation visa packages, your focus should be on the cost of this investment over time, the number of hectares of teak you will receive, and exactly what you are buying. For example, some companies sell you the trees, but not the land. This means that you will receive the proceeds from one full teak rotation but your ownership stake ends with the final harvest. You cannot benefit from the appreciating value of the timber land itself or from any future production.

Sample Yield Per Hectare Projection:

 Below are typical yield per hectare figures for a teak property, using realistic numbers that have not been adjusted upward for inflation. Projections are best done in this way. Once inflation is added to the numbers, almost any return may be projected simply by inflating the future value of the harvest, making the projection meaningless.

Over time, of course, teak prices will rise. Timber prices, in general, have exceeded the inflation rate over the past 30 years. To determine what your internal rate of return (IRR) would be with inflation factored in, just add whatever average inflation number you feel is appropriate to the yield numbers shown below. For example, if the projected IRR is 8% and you add 7% for inflation, the inflation-adjusted return rate will be 15%. ?

Costs have not been factored into this projection because—as discussed above—your expenses can vary significantly, depending on the terms of your contract with the reforestation visa company.

Yield at Key Stages of the Teak Rotation:

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This info from the Director of  Panama Teak Forestry. A major tropical timber investment company focused on teak investment.

If you have visited Panama and decided you do indeed want to spend some time here as a resident ( and yes, it does have its advantages) then first off read the section in the Boquete Handbook about Visas. It seems obvious but really that’s why we wrote it, to demystify the process and help people decide which visa they want and how to go about it.

Here is a post I read on a Boquete forum today-

I also recommend that first up, do that. Read up and acquaint yourself with the different types of visas and what is required. From there, it is not a difficult process. But you do need to know what you want to do first.

Buena suerte!

Dianne H – The Boquete Handbook

BCP, who run the Tuesday market, has advised that everyone who sells food or food/produce related products must have their (if more than one person on the table) carnet by Sept 2011. Here is how you go about it, it’s not hard, just time consuming!

Go to the Centro de Salud (next to Romero’s). Speak to the first window (on the left, hopefully someone will be behind the window) If you do not speak good Spanish, TAKE someone who does!

Tell them you are applying for your carnet de salud (permiso) and need your examinations form (for blood/stool tests). They will give you TWO forms – a white one and a blue one. They should give you a  stool sample jar,(un envase) if they don’t, ask for one.

You will be directed to go around the corner in that building to see the nurse, who will take your forms and ask for your vaccination record. If you don’t have it with you, you can say you will bring it to the Dr later. The nurse will certify the forms and tell you to go to the polyclinic to have the exams done.

Take both the Blue and white forms (exam results) to the OTHER health clinic , the POLYCLINIC opposite the bomberos, half a block south of the Centro de Salud.

Go into the PolyClinic – there will be many, many other people there. Don’t be frightened! You are looking for the line at the back of the room ( on the right hand side as you walk into the room) where people are registering for their various appoinments. Go there and hand your forms to the lady behind the window. Also give her you stool sample (wait until she asks!). Once you are signed in, she will tell you to go to the caja (cashiers) and pay your exam fees – $6.00.

Go to the Caja and pay you exam fees, a few windows up from where you were.

Take this back to the exam sign-in lady. Give her the receipt.

Then go to another line outside the little glass box type stall a few steps away from the registration line. This is where the blood drawing people live. Get in line there and wait until you are called. Take a book or something to amuse you. There will be a lot of pregnant people in front of you.

After having blood drawn, go have lunch (and maybe a drink!)

Now is the time to organize both your dental check and you pap test(ladies), protate ( men) results. If you have been to the dentist recently, go to them and tell them you need a simple statement of a clean, healthy mouth ( they will know what its for) . There is usually no charge for this.

If you have had your pap/prostate tests within the last year, those results are valid and can be used.

Organize your docs. If you need a pap/protate test one done, you can get either of these quickly and inexpensively at Dr Chen’s clinic across from MELO. A very nice young locum Dr (who looks about 15) will do them with little fuss. The results will be available the next day ( $24.00)

Go back to the POLYCLINIC the day after the blood/stool tests and pick up the results.

Once you have your -

Blood/stool test results

Pap/prostate results

Dental check

Take all of these PLUS your vaccination history back to the Centro de Salud on either a MONDAY or WEDNESDAY early – about 7.30am and try to get the dentist/s to check your dental check.( Cost is 0.50c)

NB-You cannot proceed until you have this. You will be given a small, long skinny form. This will be signed by the dentist and THEN you are looking for a signature from the Dr on duty (probably Dr Pedro ) at the Centro de Salud who will give you a quick physical and review all your docs. The review costs $0.50c.

Now if you get exhausted during all this, and trust me, you will somewhere along the line…because this is only one page of notes but the actual process took about 3  to 4 weeks…while you are waiting for all the tests etc, go and schedule your kitchen inspection with Snr Juan Pablo who’s office is in the back of the Centro de Salud.

Snr Juan Pablo is the short, balding man who came to the BCP to tell us about the Carnét. He is very nice and relaxed and is in charge of the health dept inspections for Boquete. He will give you a date for your kitchen inspection and then you will meet him outside the Centro de Salud and take him to your cocina. Do not panic about the inspection, it’s quite brief and not a big deal. Make sure the place is clean and tidy, no animals inside, tiled splash backs in the kitchen , roof not falling in , screened windows in the kitchen (very important it seems) …hot water in the kitchen too. Just make sure it all looks good and be very friendly. Offer the inspectors a drink ( no it’s not bribery , its manners).

Once you have had your house inspection and all your tests, done your physical with Dr Pedro and you have the long skinny form signed by both the dentist and Dr Pedro, take the form to the caja in the Centro de Salud and pay $1.00.

Go have two carnet head shots taken at the print shop down from the Bistro and REAL recycling- $3.00

Take -

• your signed medical form
• receipt for $1.00 from the Centro de Salud
• 2 headshots

to the Admin Office next to/in front of Snr Juan Pablo’s office. Ask/beg Snra. Isabella for your card. She speaks English,so no swearing. If you are selling Food, you will have to schedule your CHARLA with Snr Juan Pablo BEFORE you get your card. This is a full day program and it will be in Espanol.

There…now was that too bad???

As in all things be cheerful ( or at least try!) and Hope for the best!!!

The number of Americans who are renouncing their citizenship has been climbing in recent quarters. Take a look at the chart below, courtesy of Andrew Mitchel, an international tax attorney who has been manually tallying the lists of expatriates published in the Federal Register. The chart below is taken from his blog – source is the Treasury.

A total of 499 Americans renounced their citizenship during the first quarter of this year. The number of people expatriating during the first quarter in each of the previous seven years averaged 115.

Mitchel suggests that two technical tax-related changes inspired more people to give up their citizenship. He writes in an e-mail:

First, in 2008 the expatriation rules were changed. There is no longer the 10 year U.S. tax return filing requirement. Although there is now a mark-to-market regime triggering gains upon expatriation, up to $636,000 of gain can generally be excluded for individuals expatriating in 2011 (the amount is annually adjusted for inflation). Further, non-U.S. citizen, nonresidents can now annually visit the U.S. for 120 or more days without becoming taxed as U.S. residents (under the pre-2008 rules, visits to the U.S. for more than 30 days during any of the 10 years following expatriation caused the individual to be treated as a U.S. resident for that year). With the $636,000 exclusion from the mark-to-market gain, many individuals can expatriate without paying any U.S. tax. It is important to note, however, that some individuals, especially those with assets in foreign pension plans, may unexpectedly pay more tax than they  realize. The circumstances of each individual considering expatriation must be closely analyzed to determine the amount of U.S. tax that will be due upon expatriation.

The second reason for the increase in expatriations, I believe, is the recent publicity regarding the penalties and voluntary disclosures for failing to report offshore bank and other financial accounts. The U.S. tax rules for U.S. citizens living overseas can be quite complex. The increase in awareness of the penalties has caused many individuals with dual citizenship to conclude that their U.S. citizenship is not worth the stress and hassle of the U.S. tax filing rules. The U.S. is almost the only country in the world that requires its citizens that live permanently in another country to continue to file tax returns in the country of citizenship. Combine the U.S. tax return filing complexities with the potentially bankrupting penalties for failing to report certain items, and many individuals conclude that their lives would improve by shedding their U.S. citizenship.

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From the news yesterday – excerpted from La Prensa. 

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  From LA PRENSA, (translated  by  Google):

 Lannate, vidate, Lorsban, and captan 50WP Benlate are some of the 16 pesticides that were restricted to the use of agricultural activity in the country, are considered highly toxic to human health and the environment. 

Using some of these products can cause depression, nausea, vomiting, loss of orientation, cancer and even death. 

These substances are used in the country’s agriculture as herbicides, fungicides and acaricides were restricted after achieving a consensus among producers, traders and authorities. 

Among the health measures also banned the use of 11 chemicals such as: 2-4 dichlorophenoxy, captafol 50WP, Akar, dicofol 25 WP, methyl parathion, dimecrón, Pillar, Brazier M, toxaphene and Azodrin. 

There is evidence that the mismanagement of these toxic substances can cause serious health problems, reported Emeris Quintero, director of Plant Protection, Ministry of Agricultural Development (MIDA). 

Through a resolution, provide that all restricted products may be marketed only by prescription certified agronomists. 

In the restricted group, said the official, the sale of the pesticide active ingredient methomyl (Lannate), oxamyl (vidate) and chlorpyrifos (Lorsban) is governed by extension of the Measure. 

According to the World Health Organization, the Lannate and vidate 1A category are substances, extremely hazardous. 

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 Original  text (espanol)

Lannate, vidate, lorsban, captan 50WP y benlate son algunos de los 16 plaguicidas que fueron restringidos para el uso de la actividad agrícola en el país, por considerarse altamente tóxicos para la salud y el ambiente.

El uso de algunos de estos productos puede causar depresión, náuseas, vómitos, pérdida de la orientación, cáncer e, incluso, la muerte.

Estas sustancias, que son utilizadas en la actividad agrícola del país como herbicidas, fungicidas y acaricidas, fueron restringidas luego de lograrse un consenso con los productores, comerciantes y autoridades.

Entre las medidas sanitarias también se prohibió el uso de 11 sustancias químicas como: 2-4 diclorofenoxi, captafol 50WP, akar, dicofol 25 WP, metil paratión, dimecrón, pillarón, blandón M, toxafeno y azodrín.

Se ha comprobado que el mal manejo de estas sustancias tóxicas puede causar graves problemas a la salud, informó Emeris Quintero, director de Sanidad Vegetal del Ministerio de Desarrollo Agropecuario (Mida).

A través de una resolución, se establecerá que todos los productos restringidos solo se podrán comercializar mediante receta certificada por ingenieros agrónomos.

En el grupo de los restringidos, explica el funcionario, la venta de los plaguicidas con ingrediente activo metomil (lannate), oxamil (vidate) y clorpirifos (lorsban) será regulada por extensionistas del Mida.

Según la Organización Mundial de la Salud, el lannate y vidate son sustancias categoría 1A, extremadamente peligrosas

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http://www.chiriquichatter.net/blog/2011/04/15/who-is-your-angel/

Thank you to Don Ray for this article.

 The New Consumer Protection Agency here in Panama is ACODECO.

 The David Offices and contact details are located at the foot of the image here to the left.

You are encouraged to visit them ,even if you can’t speak Espanol. Take someone with you who can. It always helps here if the office workers recognize you. Politeness and a smile go a long way towards your goal of getting someone to listen to you. You can always check out Jubilado discounts there too.

For those unable to attend , a summary of his remarks which are posted here in PDF format.Summary of presentation at BCP Community Center

For more information regarding attending the meetings ( open to all – $1.00) email Hershel Stolebarger at  srhershel@yahoo.com