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Investing in Panama, its forestry and reforestation

Investing in Panama, its forestry and reforestation
July 31, 2020 Jonathan Sacks
A cut-down log of wood, representing investing in Panama and its forestry.

When you amass enough capital, there’s a single question on your mind — where do you invest it? In today’s fully globalized economy, there are myriad options when it comes to potential investments. Sure, you could take a look at the world’s least volatile stocks and put some money there — but a truly secure investment portfolio requires diversity, and thinking outside of the box. And that’s precisely why we’re going to examine the possibility of investing in Panama’s forestry!

Investment Climate

When considering if investing in Panama is a good idea, there are plenty of factors to take into account — both regarding your specific form of investment, and Panama in general. Indeed, each country presents its own macroeconomic benefits and challenges. When it comes to Panama, however — you’ll find that the local investment climate is particularly stable.

Fiscal concerns are out of the way, seeing as the local currency is tied to the U.S. dollar. The local population also uses U.S. dollars as their paper currency, with Panama only minting its lower denomination coins.

This dollarization is important for investments, because it signals macroeconomic stability — along with the existence of the world-famous Panama Canal, a crucial lynchpin in the global trade network. Because of all of this, the economy of Panama has achieved an incredibly steady annual growth in the previous two decades. In fact, it has had the highest average yearly growth in the entirety of Latin America.

One of the key sectors in Panama is the agroindustry sector, along with tourism and the assorted financial services. This industry is ripe with potential for foreign investment — which is one of the many reasons why tens of thousands of U.S. citizens relocate here; many of them look to invest their savings.

It’s also crucial to note that Panama’s government has worked hard to ensure a stable political environment for foreign investors. For almost three decades, Panama has proven to be one of the most stable constitutional democracies in Latin America, with fair elections and a constantly decent credit rating. This ensures that there are no unwanted surprises that could spoil your investment.

Panama Reforestation Programs

Panama’s reforestation efforts represent ample opportunities for an excellent investment. More specifically, the local government offers a Reforestation Visa — a type of residency that serves to attract investors that would help replant deforested areas. Panama offers the possibility of citizenship to anyone willing to invest a certain amount of money into their economy — more specifically their reforestation efforts.

One of the excellent parts about investing in teak wood forestry in Panama is that you don’t have to worry about the details of the investment; all you need is the finances and the will to utilize them. In return, you get one of the most secure investments you can find, and a residency that leads to full citizenship for both you and your family.

Also, if you’re picturing yourself leading a reforestation project in Panama yourself — don’t worry, you won’t actually have to lay the groundwork yourself. Investors usually cooperate with local companies that provide programs with full maintenance. That includes every aspect of teak wood growing, harvesting and processing.

You can find an operator who will perform the thinning, trimming and cutting, while also creating lumber from the trees and selling it for the best possible price. Also, as you’ll soon see, the reforestation programs certified by the government represent an excellent source of practically passive income.

Teak Wood Investment

If you’re looking for an excellent commodity investment, you won’t do much better than an investment into teak wood in Panama. First of all, this type of hardwood is constantly in demand; globally, the teak wood market has fared better than the U.S. stock exchange in the past couple of decades. Such an investment allows you to sell the wood itself, as well as the lumber and byproducts.

And let’s not forget — you’re not only making an investment for your own benefit, but for the rest of the planet as well. Teak wood reforestation is a major boon for the surrounding ecosystem. It’s also a monetarily sound investment because teak wood is one of the sturdiest hardwood trees you can find. It’s extremely resistant to decay, weather changes don’t affect it much, and parasites and insects don’t infect it. It’s used for the manufacturing of everything from furniture to ship decks. Woodworking artists also frequently use it, due to its elastic and yet firm qualities.

You can earn quite a lot from teak wood — around every six years, the trees get thinned for byproducts that earn additional money for their owner. Once twenty years pass, you cut the trees and reap the biggest reward — lumber sales. The global supply of teak-based lumber is actually shrinking, meaning that there’s a constant demand for such products. Hardwood forests are disappearing all over the world, in places like Malaysia and India. That’s why each hardwood tree grown in tropical climates is bound to fetch a hefty price on the open market.

Conclusion

Keeping all of this in mind, investing in Panama and its forestry is an incredibly enticing proposition. Indeed, it’s not just about the expected return on investment, but about the secondary benefits as well — such as a Panamanian residency and citizenship. The local economy is robust, the investment opportunity is solid, and the product itself is of high quality — practically everything you need to know!

Jonathan Sacks is an economist and freelance author, mostly dabbling in trade logistics and global markets. When he’s not working for companies like panama.movers-int.com, he enjoys quality scotch and a good game of chess.

1 Comment

  1. Susan Wright 2 years ago

    Hello, I am wonering how long it does take for the Cirizenship in Panama. ?

    thanx

    Susan

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