International Real Estate – Panama – Mario Alberto Arias V.

I founded AALN in 2011, following comprehensive prior work in corporate and financial services. Since then, I have provided legal services to individuals and corporations, as well as family offices, primarily in the real estate and corporate fields.

Panama has long held great importance as a full-service financial and corporate centre, with its dollarised economy, stable political environment and a privileged geographic location in the middle of the Americas. The country has also seen significant economic growth in the past 25 years, attracting investors from differing parts of the world.

I have gained experience providing advisory, and as lead counsel in complex real estate cases for varying purposes, including the structuring of REITs, restructuring real estate portfolios, advisory in the management of real estate assets, advisory in real estate developments, securitisation of real estate, due diligence of real estate, as well as complex real estate acquisitions in differing industries.

We distinguish ourselves by providing top-of-the-line services, and by understanding and securing our clients’ investment purposes and objective. Our service is rendered via a team of experts whom I lead, and who are fully committed to analysing the risks to arrive at the most secure – yet practical – deal structure, depending on the clients’ objectives. Experience, transparence, detail, responsiveness and full availability are our promise.

As noted, Panama has seen significant economic growth in the last 25 years, which has attracted investors from various parts of the world due to the proven excellence of the region’s service industry.

Since the beginning of my career, I have assisted international investors who have come to Panama to invest in real estate for such purposes as high-profile residential real estate, high-profile and social interest real estate developments, energy developments, commercial and heavy industry real estate investments, as well as touristic real estate developments.

Accordingly, we have worked in collaboration with law firms from various countries from our region, from Europe, from Asia, as well as from the US, who have referred clients that are investing in real estate in Panama directly or through private real estate funds.

In recent years, the clean energy generation sector (primarily solar and eolic) has become very dynamic in the region, and Panama has become a haven for investors seeking land on which to develop large-scale energy projects. In addition, the country has experienced substantial developments in solar and eolic energy, being able to claim the largest eolic energy project in Central America. As a result, we regularly assist clients from the region and other countries in the acquisition of land for these projects.

Meanwhile, during the COVID-19 pandemic, the hotel industry was deeply affected by the restrictions regarding the inflow of foreigners to our country for more than six months – a situation that obviously had a tremendous negative effect. Today, after four years, we have noted a dynamic environment for the hotel industry in differing regions of our country, as there have been numerous regional and global hotel flags coming to invest due to the world-class touristic sites that Panama has to offer. These include Boquete, Tierras Altas, the Gulf of Chiriqui, Bocas del Toro, Pearl Islands, San Blas, Colon and Anton.

Moreover, the housing development industry in the main cities of our country has regained its strength by increasing the number of projects in recent years, including high-quality projects for local and foreign investors.

At the same time, it should be noted that our financial centre does not escape the new technologies and means of conducting business intrinsic to today’s world. Therefore, we have received potential investors seeking opportunities to create differing types of funds of digital assets through our jurisdiction, including securities with real estate portfolios as underlying assets. However, digital assets in Panama have not been regulated formally in our legislation, and so this creates a challenge for structuring this type of vehicle or asset in our jurisdiction.

Nonetheless, the real estate industry in Panama has seen transformation with the advent of novelties and technologies, including AI, which are being used for the promotion and management of commercial, industrial and residential properties – creating a more secure, transparent and dynamic environment for investors.

We have seen that ESG values are gaining importance in the majority of industries, extending to the real estate sector, which depends on financing from banks and financial institutions, as well as private and public funds. They all now expect higher standards of compliance and observance of environment, social and corporate governance regulations, as well as best practices.

ESG values have definitely impacted our work, as we have been required to broaden our advisory offering, considering these values when advising clients who are seeking funds for their development. This has led us to reinforce our knowledge in the realm of ESG best practice, which is also evolving continuously.

During this climate of high interest rates, we have faced complexities in assisting private companies and funds in structuring financing. Although it seems more of a financial problem, it also affects the ways in which these deals have been legally structured to meet the expectations of the issuers, as well as the requests of potential investors – a situation that can result in lengthy and complex negotiations between the parties to secure the investments.

As mentioned previously, Panama is well known for being politically stable, and this means that we have stable regulations that – from time to time – change strategically to keep up with new developments so that they maintain the region as a vanguard financial and services centre.

There have not been recent changes or amendments we can mention that have directly affected our work; however, for more than five years, Panama has adopted significant changes by implementing stringent compliance regulations that have proven to be at the forefront of international standards.

These compliance regulations have affected our work in positive ways, as we have been obligated to elevate our standards; but it has also affected our work by creating the necessity to adapt and conscientise foreign investors to these practices.

We maintain a network of legal professionals and real estate agents in the region, as well as in differing parts of the world, who are our proven allies, and whom we inform of updates and programmes in Panama so they can inform their clients and seize opportunities accordingly.

Furthermore, we analyse clients’ citizenship, their objectives and special requests – in order to provide information relevant to their case, including regulations, legal obligations, legal benefits and recommendations on how to proceed depending on their unique scenario.

As noted before, there are no new relevant legislations that affect real estate law in our jurisdiction. However, we foresee that soon we will have a complete regulation in digital assets in Panama, which will allow new trends in real estate financing in our jurisdiction.

We also foresee new legislation in the social interest housing development sector, which will dynamise investments in this sector by providing secure ground for large developments in differing parts of the country, which will in turn attract capital to the sector.

Meanwhile, environmental issues and regulations seem to have gained more relevance in all sectors, and so the resulting compliance has become something of a challenge.

Finally, as mentioned previously, we foresee that ESG values will become a standard in our jurisdiction for those seeking external financing.

Panama has proven to be a resilient economy and a very stable jurisdiction for foreign investment.

AALN has – for more than 10 years – committed to delivering comprehensive legal assistance and excellent personalised attention to each of our clients, adhering to the highest standards of ethics and professionalism. Our real estate practice has been distinguished by our clients and peers, with whom we have worked on several local and international transactions, reaching a transactional profile that surpasses US$150m.

Last, but not least, our offering is comprehensive, with a team of expert lawyers and assistants committed to providing tailored legal advice covering all aspects in order to secure our clients’ interests and objectives at all times.