Author: Klaus Happ

Partnership between FRAPAN-Invest and arsago Real Estate

FRAPAN-Invest and arsago Real Estate have formed a partnership for property investments in Panama. We therefore combine decades of property management experience with local market access and networks. Our aim is to be able to offer attractive investments in Panama`s real estate market.

arsago Real Estate was founded in 2001 by an experienced management team which had already been successfully working together for a period of 20 years. The company is active as a manager of investment capital and asset manager for residential real estate in Germany and can look back on a successful track record of many years with renowned investors and investments of over 1 billion euros.

FRAPAN-Invest trustfully offers investors the opportunity to diversify their assets in a new and alternative category, namely that of property investments in Panama. The company is continually active with regard to the profitability of Panama real estate.

Panama Casco Viejo Skyline

Europeans and Asians are only just beginning to discover Panama`s real estate market for themselves. Accordingly, we would like to take on a leading role in the German market which until now has not been in the focus of investors.

Why Panama? Simply because the facts are considerably better than Panama`s reputation

  • One of the fastest growing countries in the world (GDP growth of 8.5% per year since 2002)
  • US dollar as the national currency
  • Guaranteed USA protection
  • More than 130 multinational companies and organisations have their head office for Middle and South America in Panama. These include Adidas, Bayer, Nestle, Roche and also the United Nations
  • Newly-discovered investment opportunities from a European and Asian perspective, with commensurately attractive prices and returns
    …an advantage that will change in the future following the onset of diplomatic relations with China and negotiations over a Chinese tourist visa (Link)

The real estate market in Panama counts internationally as one of the most interesting locations for property investment. We would like to be your local trusted adviser and to take care of your investments in Panama.

Profitable, secure and beautiful:
Real estate investments in Panama

Investment Opportunities in Panama

Due to rapid growth, legal security and the US dollar, investments in Panama represent an attractive alternative in times of low interest rates. We offer three types of investment in terms of real estate.These all differ regarding expected yields, duration of investment and dividends.

1. Accommodation in a top setting with high rental returns

  Skyline Panama City

As Panama City is the location of over 250 multinational groups, there is a huge demand for employee apartments which can house reliable tenants. Many of these employees live in one of the modern multi-storey buildings on the Pacific promenade or in the beautiful UNESCO old town site of Casco Viejo in Panama City. Gross rental yields in Panama City are around 7% per annum. A regular rental income can therefore be achieved alongside the potential appreciation of a property`s value. We assist you in your search for an apartment, the legally-secure buying process and your administrative needs (Accommodation in a top setting).

2. Restoration of a historic colonial building

Restauration Casio Viejo

The UNESCO world heritage site of Casco Viejo in Panama City presents a fine setting for property investment thanks to its unique position, historical buildings and appreciation potential. We plan to restore a colonial building with a view of the ocean and skyline in cooperation with a German developer. So too, we would like to rent out the resulting shop premises and apartments. Investors here can profit from Panama`s state concessions (Restoration of a historic colonial building).

3. Boca Brava island plot

Inselprojekt Panama

Land in Panama provides an interesting alternative thanks to infrastructure investments from the government. We offer investors the chance to share in a tropical island project in one of the countries most beautiful provinces. Our goal is to develop a hotel and real estate project along a 400 metre stretch of beach, with the target of increasing the value of the plots belonging to it (Boca Brava island project).

The real estate market in Panama counts internationally as one of the most interesting locations for property investment. We would like to be your local trusted adviser and to take care of your investments in Panama.

Profitable, secure and beautiful:
Real estate investments in Panama

Panama-Global City of the Future

Panama City has been chosen as one of the global cities of the future. It is the location for over 250 multinational companies which have decided to establish head offices there. Such companies include Adidas, Nestle, Roche, Bayer and Huawei & Co. Panama`s legal security, growth and US dollar currency are some of the many advantages. Additional characteristics, including a young population (0-24 years: 45% of people/ 23% in Germany), make Panama City one of the global cities of the future alongside Shenzhen (Link). The real estate market in Panama counts internationally as one of the most interesting locations for property investment. We would like to be your local trusted adviser and to take care of your investments in Panama.

Profitable, secure and beautiful:
Real estate investments in Panama


Attractive Rental Returns in Panama

Top investment locations are marked by a growing young population, economic momentum, increased purchasing power, the well-being of the people, good infrastructure and a developed transport network. Panama fulfils these criteria, thereby making it attractive to invest in the country. Where else can you acquire an apartment for 2500 US dollars per square metre within a modern, international metropolis with excellent conditions in a top location on the Pacific promenade? The above-mentioned factors coupled with Panama`s security appeal to many international companies and their staff. This, in turn, serves to create prosperity, purchasing power and a continual demand for real estate. Property investments in Panama City`s top locations realise around 7% per annum (2% in Frankfurt). Such returns are moreover achieved in US dollars, the world`s most important currency. Additional costs for buying in Panama (notaries, lawyers, estate agents and registration) are low at 1-2% of the purchase price. Similar costs in Frankfurt would be approximately 7.5%.

Real estate multiplier in international comparison

The “purchase/rental price ratio” (“multiplier”) compares buying prices to attainable rental incomes. The following rule applies: the higher the multiplier, the more expensive the property. In this way, we can look at both under and overvalued locations.

These figures do not only relate to top settings, but concern average downtown prices and thus differ from our above-mentioned figures for best locations. They do indeed provide a fine overview of profitability in single spots.

Rental yields

Panama is thus internationally an excellent investment location, not only because of its natural beauty, security and strong economic growth, but also because of its real estate figures. The comparatively high rental returns stem from:

  • The demand from multinational companies for employee accommodation
  • International business people who wish to profit from the economic growth
  • Spanish workers who have few prospects in their own country
  • Foreign retirees who have settled in Panama
  • South Americans attracted by job opportunities

Such groups can be defined as those preferring to rent rather than buy.
Whether you decide on an investment in the UNESCO old town of Casco Viejo with all its incentives or on an apartment in Panama City along the Pacific promenade, the real estate market in Panama is truly exciting and profitable.

Source of graphs (,, own)

Expected real estate boom through Chinese investors

Following the onset of diplomatic relations with China some weeks ago, Panama is looking forward to closer economic cooperation and is indeed anticipating a new property boom. Up to now, the Chinese have scarcely appeared as real estate buyers in Panama, something in stark contrast to their worldwide investments in places like Canada, US, UK and Germany. Chinese people had previously received no tourist visas for Panama and didn`t therefore have the country in their sights regarding real estate. That has all changed however…

A great many workers from China and India came to Panama during the construction of the Panama Canal (1904-1914). Pressure from locals at the time subsequently led to the Chinese and Indians being refused tourist visas…a matter which stood until recently. Only work permits for multinational companies such as Huawei or China Construction were granted. Hardly any Chinese tourist groups or private investors were to be seen in Panama. Following new diplomatic relations and a consequent visa agreement, one can now expect the arrival of Chinese investors in the coming months. This will undoubtedly have a lasting impact on Panama`s real estate market and prices, just as in the world`s other countries. In the best locations one can currently buy top quality apartments (e.g. from internationally-renowned designer Philippe Starck) directly on the Pacific promenade for about 2500 US dollars per square metre and achieve a rental yield of 7%. Compared internationally, this is very cheap and will be discovered by Chinese investors who are globally used to quite different costs. And all that with US dollars, in one of the fastest growing countries in the world.
Link China`s property desire

Tax Agreement between Germany and Panama

As announced some days ago, Germany and Panama have signed a new tax agreement. This provides for an automatic exchange of tax and financial data from 2017 on. The agreement complies with the international standards of the OECD. Panama wishes to free itself from the reputation of the “Panama Papers” and this represents a further step in the right direction, following the OECD decision to remove Panama from its list of tax havens. With this, two important preconditions have been created for a pending double tax agreement between Germany and Panama.

OECD takes Panama off tax haven list

The OECD (Organisation for Economic Cooperation and Development) officially removed Panama from its international list of tax havens at the end of June 2017. The OECD explained this as being part of the good development and cooperation of Panama with regard to tax transparency and international relations. The country itself has signed numerous agreements with various nations over the last months (eg with Germany in June 2017) in terms of exchanging tax information. The OECD has furthermore given Panama its second-best rating status, that of “highly respectable”.

Investment Incentives in Panama`s UNESCO Old Town

Panama`s parliament has approved a new tax relief law on investments in the beautiful old town which will come into effect immediately and last for ten years. This, of course, is extremely good news for our UNESCO old town project in which a building will be restored in order to generate a lasting rental income. In all, it means (according to our understanding…no liability, we offer no tax advice):

  • 30 years no property tax on buildings and grounds
  • 10 years no income tax on rental yields
  • 5 years no sales tax

Such an investment is very sustainable since the number of buildings on the peninsula is limited to about 850 and is not extendable. In cooperation with a German developer who has a great deal of experience in old town restoration work, we plan to reconstruct a unique building with a view of both the ocean and skyline. We would similarly like to rent out the resulting shop premises and apartments, thus achieving a long-term rental income in addition to the increased value of the property.

This video gives you a small impression of the UNESCO old town: Casco-Video
Investors and the government have been reconstructing the historic colonial buildings for some years now. Although there is still much to be done, restoration has led to desirable hotels, bars and restaurants being situated close to the presidential palace, museums and galleries. The trendy district of Panama has thus arisen. The old town (originally formed in 1673) is now the second most popular tourist destination after the Canal. At the same time, many expats from international companies and young people from the upper-middle class are looking for rental accommodation here, in order to experience Latinamerican flair at first hand.

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