On 26 June, 2016, the first vessel passed through the then recently completed Third Set of Locks of the Panama Canal. The completion of the $5.3 billion investment, which allows for far larger vessels to transit the Isthmus of Panama, forms one part of a strategy to develop Panama into the leading maritime logistics hub for the Americas, as well as a logistics hub par excellence, in general. Part of this strategy is the inclusion of developing Panama as a hub for superyacht business, as well as a destination, as a means of socioeconomic growth.
“Panama, in the merchant world, has become one of the most important places in the world. The main reason is our geographical location, secondly it’s the [Panama] canal, and more recently it’s been the development of two of the most important ports in this area of the world,” starts Juan Jose Espino, partner at Pardini & Asociados, a Panamanian law firm. “A consequence of that is that we have developed an infrastructure that is able, in many respects, to service the yachting world.”
Espino explains that Panama already has over 140 multinationals using the region to service their Latin American and Caribbean operations and, furthermore, that the same beneficial taxation laws and incentives would apply for a number of the services that are being provided throughout the yachting world.
Additionally, in 2017, the Panamanian government approved a law to create a special legal regime for financing operations of the local and international maritime sector, which includes providing fiscal, labour and migration incentives for companies that carry out such operations in Panama.
“For example, if you service foreign-flagged (non-Panamanian) superyachts there is zero tax, or, if you established a yacht management company in Panama, it would be exempt from income tax for 20 years,” he says. “However, we need to up our game. I want to open people’s eyes to the opportunity that is Panama and encourage European and US influence because there is room for better and more specialised yachting companies to do business here.”
Much of the logistical and legislative infrastructure needed for Panama to become a yachting hub is already in place, but it remains understandably underutilised due to the nation’s reliance on the commercial shipping industry. If one considers the number of superyachts that pass through the Panama Canal on a yearly basis, it is clear that more can be done within the region to benefit from these high levels of traffic. Furthermore, the challenge that Panama faces is one that has been common throughout many nations and various yachting sectors, the quandary of how best to transpose commercial models onto the yachting market.
“A number of the commercially-minded service providers are now realising the benefit of also assisting the yachting sector,” continues Espino. “However, my conclusion after so many years is that the yachting market is extremely different to the commercial markets and requires an entirely different level and type of service. This is where Panama needs outside influences to aid in its development.”
According to Espino, the various ministers, cabinets and chambers that are involved in the development of Panama’s maritime strategy are very much behind the nation’s yachting development. So much so, that the Panamanian maritime chamber has created a commission dedicated to promoting the yachting industry.