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| cost of International Financial Centre of the Americas |
Offshore banking in Latin America is one of the winners from the global banking downturn, with Panama taking most of the spoils according to a report by Alternative Latin Investor. As a result of collapsing US banks and a weakening dollar, US investors are looking for alternative places to keep their money. In addition, Latin America’s high-net-worth individuals have done relatively well compared with rich people in other regions. According to a Capgemini analysis, between 2007 and 2008 Latin America’s high-net-worth population fell by just 0.7%, compared with Asia’s decline of 14.2% and North America’s 19%.
Safe haven
Panama in particular is a safe haven during crisis times with favourable tax requirements. It offers relative political and economic stability for Venezuelans, Ecuadorians and Hondurans. For US citizens it is an economic hub with strong ties to the US and a thriving banking system.
The Panamanian economy has solid foundations because of earnings from the canal, which reassure clients. Its regulators also require banks to set up physical operations in the country rather than operating paper businesses.