Reforestation Visa In Panama: Buyer Beware

Posted by Tropiland Editor on February 14, 2008 Leave a comment (1) Go to comments

Reforestation investments in Panama for permanent residency in Panama, citizenship in Panama and as an investment opportunity in Panama have been highly touted by many websites in Panama and internationally. Many consider that the US$40,000.00 investment has a money-back guarantee, and sell it as a future gold-mine. We would, however, advise caution and consideration to be applied when you are studying where to invest your funds and how to obtain residency under a reforestation program in Panama.

One of the pitfalls of the Panama reforestation investment is that there are many reforestation programs offered in Panama, which have already been structured by other investors or promoters (usually foreigners). The biggest pitfall to beware of is the “guaranteed returns” which are offered on the investments. Although teak reforestation may be lucrative, often the figures quoted are highly exaggerated, failing to take into account the usual culling of the trees during the 20-25 years of growth. Therefore, although 1,000 trees may originally have been planted, you may expect at the end of the 20 years to only harvest 100 of these trees. I am not a forestry expert – I simply wish to state: buyer beware.

There are two ways to qualify under the reforestation program – you may buy your own piece of property, through a corporation, and invest in reforesting the Panama property directly. This may be of interest to you if you intend to buy a small lifestyle propety in Panama, in the mountains or on beach front and you have an interest in planting some trees which fulfill the ANAM’s list of forestry woods (this is not limited simply to teak). You will need to register the project with the ANAM before we can apply to the Immigration Department for your immigrant visa as a reforestation investor. The registration process may be a little tiresome, but you will then have complete independence with respect to the land and how you manage it.

On the other hand, many investors in Panama prefer to simply purchase either shares in a corporation which has already established a reforestation project in Panama or purchase property which is administered by such a company and which has already been qualified by the ANAM as an appropriate project. In this case, you will need to ensure that the shares and project have been properly registered both with the Securities Commission and the ANAM. Many qualified attorneys in Panama can do this due diligence for you.

Note: When a foreign investor in Panama undertakes a reforestation project in Panama, (s)he must invest a minimum of US$40,000.00. With this investment, (s)he will be eligible to apply for an Immigrant Visa as a Reforestation Investor, whether through the purchase of the property and direct investment or through the purchase of shares, bonds, securities or other Panama investments. The investor must hold the investment, whether direct or indirect, for the minimum 10-year period. This is not a liquid investment, although it may be possible to sell the future harvest.

Please Read ANAM’s (Autoridad Nacional de Ambiente) Law 24 on reforestation incentives (in Spanish). Use our translator tool (top left corner of this blog) to translate into English.