Teak grows only within a very narrow band around the world, within 20 degrees of the equator. Although not indigenous to Panama, this tiny country provides a uniquely perfect geographical, climatic and geomorphological condition for the production of high-quality Teak. Some of the fastest growth rates of Teak in the world have been recorded in Panama.
In addition to having implemented a strong conservation policy, the Panamanian Government has enacted incentive programs to promote reforestation projects. These incentive programs include such things as residency status and various tax exemptions.
By means of Law 24 of November 23rd, 1992, the State of Panama creates incentives for reforestation activities in the Republic of Panama. Also, Executive Decree No.89 of June 8th, 1993, further regulates that reforestation projects will not be subject to any income tax on any profits from the wood produced.
Benefits for Foreigners
Any foreigner who participates in a reforestation project with a minimum investment of US$100,000 is entitled to obtain residency in The Republic of Panama. This is another incentive provided by the Panamanian legislation for the development of reforestation projects and is an added incentive to the tax incentives previously discussed, which were established for the investors.