Thetabiz Corporation

Business practices in Panama are very similar to those in the United States. Business tends to be direct and straightforward. On average, Panama City accounts for 65% of total national sales of consumer goods, the remaining 35% is distributed among the principal cities of David, Colon, Santiago and Chitre. Generally, the marketing channel structure in Panama is simple. Direct importers act as wholesalers and in many cases also as retailers. This situation is common in the case of apparel, automotive parts and hardware products. In the case of consumer goods, food and medicines, the retail operation is separate from the wholesale operation. For industrial goods, sales are normally handled by local exclusive agents or distributors. In other cases, local firms order directly from U.S. brokers or the manufacturer. Some of Panama’s major importers are also regional distributors for Central and/or South America, with warehousing facilities located in the Colon Free Zone (CFZ). Generally, CFZ importers/distributors have affiliated stores in Panama City for retail sale to the local market.

Due to its strategic location at the mouth of two oceans, Panama, from the time of the conquistadors, has served as the crossroad of trade for the Americas. Today the country is an international trading, banking, and services center. Trade liberalization and privatization over the last several years, while flawed, have added some substance to these assertions. Panama’s dollar-based economy offers low inflation and zero foreign exchange risk. Panama’s Government actively seeks foreign investment. The downturn of Panama’s economy, which started in 1999, modestly reversed itself at the start of 2003. Panama still struggles to overcome the departure of the US military, low prices for its primary exports, higher prices for petroleum imports, reduced trade and investment due to the regional and worldwide economic slowdown, and contraction of domestic demand, however, growth in tourism, telecommunications, and maritime sectors along with recent growth in construction portends that first quarter 2003 gains in the Panamanian economy might continue. The sectors of Panama’s economy that have suffered in 2002 were manufacturing and construction, traditional agriculture, retail sales, fishing, and the exports sector (the Colon Free Zone in particular). According to the Government of Panama (GOP), the economy grew 0.8% in real terms in 2002, compared to 0.3% real growth in 2001. Although Panama’s 2002 per capita GDP is among the highest in the region at US$3,699, this figure is unreliable as an indicator of prosperity overall, because of Panama’s highly skewed income distribution. Panama’s income distribution is second only to Brazil in the hemisphere in terms of inequality. The Survey of Living Standards, produced by the World Bank and the Government of Panama in 2000, estimated that 37% of all Panamanians live in poverty, including over 50% of children under age 10, and 95% of the indigenous population. GDP grew 2.0% during the first quarter of 2003. The GOP predicts GDP growth of 2-2.5% for 2003. Due to the evolution and composition of Panama’s largely services based economy, the extent and nature of local competition is limited in most non-service sectors. Although the United States is Panama’s most important trading partner, with about 40% of the import market, and U.S. products enjoy a high degree of acceptance in Panama, competition is strong in several sectors including: telecommunications equipment, automobiles, heavy construction equipment, consumer electronics, computers, apparel, gifts, and novelty products. Panama’s merchandise imports increased in 2002 by 3.5 percent over 2001 to a total of US$3.1 billion. The value of Panama’s total merchandise exports in 2002 reached US$756 million, a decrease of 6.5 percent over the previous year. The Colon Free Zone alone represents a larger market than Panama’s entire internal market. Free Zone imports totaled US$4.45 billion in 2002, with exports of US$ 4.8 billion. These figures mark a decrease of 6.5% and 10% respectively in comparison to 2001, when imports decreased 0.6% and exports increased 0.4%. The total net contribution of the CFZ to the Panamanian trade balance (Exports-Imports) was US$369.3 million, down slightly from 2001. In 1999, the CFZ experienced one of its worse years ever, a disastrous 23% decline. Zone imports are mostly luxury goods, electronic products, clothing, and other consumer products. Because of this product mix, U.S. market share is somewhat lower in the Zone than in Panama. Hong Kong is the Free Zone’s biggest supplier, while Colombia and Ecuador are the two largest destinations for Zone re exports. As a direct effect of economic slow down of the economy, Panama’s agriculture sector continued to reduce its contribution to the GDP in 2002, which stands now at 6.9%. Falling prices for export commodities such as coffee and sugar continued affecting those sectors, reducing their exports on an average of 2%. Banana exports decreased 13% due to access problems to EU markets and to local labor unrest. Traditional commodities such as rice, corn and beans suffered setbacks due to bad weather conditions (drought caused by El Nińo), forcing an increase in imports. The sectors that experienced the highest growth rates were fruits (mainly melons, watermelons and pineapples) with 7% average increase, and beef with 3% increase. Some agricultural imports are still subject to high duties while non-tariff barriers have proven to be a persistent obstacle to agricultural market opening. The Fisheries sector suffered a setback with exports decreasing 12% due to recurring problems with shrimp virus (the White Spot Virus). Panama paved the way for tuna exports by signing the International Dolphin Conservation Program Agreement in 1998. 2002 witnessed advanced growth in the sector with tuna exports increasing to USD 14 million (a 49% increase), mainly to U.S. markets.

Well you have some assets well over 25.000 or better 50.000 USD? In that case, you should be able to open bank account over Internet, mail or fax. You could send your certified copy of passport by fax and bank account opening application by fax to the Bank of Copenhagen and you would get premier bank account.

How to make payments to your account

You can make payments to your account(s) either by sending a cheque or by having the amount transferred electronically by SWIFT (international transfer og funds between countries) directly from your local bank. The bank’s SWIFT-address is BCPH DK KK. Should you have any doubts concerning the correct procedure, just give the bank a call. On their list of correspondent banks you will find more information on how to transfer funds by SWIFT.

How to withdraw money

Withdrawing money is simple and fast. You only need mail, e-mail, fax or pass on the relevant instructions to us by telephone. The bank will then either send you a bank draft or transfer the funds electronically via SWIFT to your local bank. All requests for third-party payments should be made in writing and/or with a prior given password. Drafts and wire transfers made payable to a party other than the account holder will be assessed a per draft/wire charge in accordance with the Schedule of Fees. Should you decide to come to the Bank personally to withdraw cash, you are most welcome. However, kindly make arrangements for this in advance.

Fitch Ratings, the widely known international rating agency, announced today the rating for the Republic of Panama. Following is the text of the press release:

Fitch Ratings-New York-April 8, 2005: Fitch Ratings, the international rating agency, today affirmed the Republic of Panama’s long-term foreign currency rating of ‘BB+’. Fitch also affirmed the sovereign’s long-term local currency rating of ‘BB+’, the short-term foreign currency rating of ‘B’ and the country ceiling of ‘BBB’. The outlook on these ratings is stable.

“Fiscal slippage beyond what had been anticipated occurred in 2004 in Panama; however, against this, we have seen a strong economic recovery and the new administration’s efforts to strengthen public finances, as demonstrated by the prompt passage of a fiscal reform in January and improvements in fiscal transparency,” said Theresa Paiz Fredel, Director of Latin American Sovereign Ratings at Fitch.

The non-financial public sector (NFPS) registered an estimated deficit of about 5.0% of GDP last year, under new accounting methodology. However, if liabilities not recorded in public finances as a result of arbitration rulings against the state are included, the deficit rises to 6.2% of GDP. In addition, outstanding accounts payable (which were reduced from 3.6% of GDP) add another 0.8% of GDP, the 2004 deficit would approach 7% of GDP. As a result, Panama’s debt/GDP ratio is estimated to have increased to 68%, among the highest in its peer group. The authorities expect to reduce the NFPS deficit to 3.6% of GDP in 2005 with improved tax administration and the rationalization of expenses. As the 2005 budget does not take into account the recently approved fiscal reform, the deficit could be even lower. Nevertheless, Fitch will closely monitor fiscal outturns this year to see if implementation of the new fiscal package delivers the expected consolidation. If the deficit is not reduced substantially in 2005, renewed pressure on sovereign creditworthiness could arise.

With a legislative majority and strong popular support, the Torrijos government, which took office on September 1, 2004, is expected to tackle an ambitious reform agenda early in its term. In addition to the recently approved fiscal reform, the government is committed to obtaining passage of a social security reform and to the expansion of the Panama Canal.

“If meaningful fiscal consolidation is not achieved,” said Paiz-Fredel, “Fitch will be concerned that stronger GDP growth rates may not be sufficient to stabilize debt dynamics, let alone offset any future increase in public debt related to the Canal project.”

Dollarization, a stable financial system, moderate debt service needs, and the Government’s considerable financial and land assets support the sovereign’s ratings. Dollarization has resulted in a long history of monetary and price stability unseen in other emerging markets. In addition, it limits the probability of a devaluation-induced increase in public debt ratios or a balance of payment crisis.

We have launched the new website which promotes business through Panamanian Corporation business vehicles world wide. So you are welcome to join us!

Applications for Bank Licenses from the Superintendency of Banks shall be filed with the Superintendent of Banks through a two (2) step process. However, Corporations already registered and authorized may proceed directly to the second step, provided that they comply, at such time, with all applicable requirements.

1. STEP ONE: TEMPORARY PERMIT

The formal consideration on the part of the Superintendent of Banks of a Temporary Permit application, requires filing of a Petition requesting a Temporary Permit from the Superintendent of Banks for the sole purpose of registering with the Public Registry any documents pertaining to the organization or authorization of the corporation under national or foreign Laws applicable to its organization. The application shall indicate the type of License being applied for: General, International or Representative. The application shall be accompanied by the following documentation:

POWER-OF-ATTORNEY.

The applicant shall file the petition through a Lawyer or a Law Firm authorized to render legal services in the Republic of Panama.

2. ARTICLES OF INCORPORATION:

a) In the case of corporations to be organized under domestic law: minutes of the applicant’s articles of incorporation and By-Laws, if any.

b) In the case of corporations organized under foreign law: legalized copy of the deed containing the applicant’s articles of incorporation and by-Laws, if any.

3. AUTHORIZATION BY THE BOARD OF DIRECTORS:

Minutes, extract of minutes or Secretary’s certificate of the Meeting of the Board of Directors of the applicant or of its financial promoter attesting to its financial support, its authorization to exercise the banking business, as well as the allotment or investment of capital required to exercise banking activities in Panama.

4. CERTIFICATION BY HOME SUPERVISORS (MONETARY, SUPERVISORY OR REGULATORY):

Certification issued by the authorities of the country of origin of the applicant or its promoter noting that it is duly registered and authorized to exercise the banking business in that country, as well as its authorization to conduct the banking business in or from Panama or establish a Representative Office in Panama (Article 23).

In case the applicant operates as a bank in its country of origin, or if the applicant is part of a financial conglomerate which includes banks operating in its country of origin, the Superintendency of Banks may require a certification by the foreign Banking Supervisory Entity of such country, indicating that such entity will carry out a consolidated cross border supervision of the applicant if the Banking License is granted in Panama.

5. PARTICULARS OF THE APPLICANT OR ITS PROMOTER, AND ITS SHAREHOLDERS:

Detailed and accurate information as to domicile, address, nationality (national identity document and/or passport) and qualifications of the applicant, its shareholders or promoter, and its Directors and Officers, as well as stock ownership by its Directors and Officers.

If the shares of the applicant or its promoter are constantly traded in the Stock Exchange, the information required shall apply to the five (5) shareholders with the largest number of shares.

6. RESUMES OF THE PERSONS RESPONSIBLE FOR THE BANK:

Resumes of the officers, directors, executives and administrators responsible for the banking office in Panama, including banking, commercial and personal references, indicating their source, in order to confirm these or to request additional information.

7. ECONOMIC GROUP:

The applicant and/or promoter shall provide information about the Economic Group to which it belongs, particularly any corporation having control over the applicant and/or its promoter, its components, track record; family relation, property, control or management; directors, officers and responsible personnel they may have in common.

8. CAPITAL:

The applicant shall submit evidence that it has the minimum initial capital required for a Bank to operate in Panama, to wit, Three Million Balboas (B/.3,000,000.00) if it is applying for an International License, and Ten Million Balboas (B/.10,000,000.00) if it is applying for a General License. The capital destined for the subsidiary in Panama shall be made up of additional capital funds provided by the Head Office, and separated from the capital of its Head Office. (Articles 33 and 42).

9. CAPITAL DISTRIBUTION:

Percentage of the applicant’s or its promoter’s participation in the paid-up capital of the office to be established.

10. LEGAL REPRESENTATION:

a) In the case of banks organized under foreign law: names of the persons designated as the Bank’s General Attorneys-in-Fact, all of whom shall be residents of Panama and at least one of whom shall be a Panamanian citizen (Article 37).

b) In the case of banks organized under Panamanian Laws: name of the person who will act as Legal Representative of the bank to be established, as designated in the respective Articles of Incorporation.

11. BALANCE STATEMENT AUDITED BY CPA AND FINANCIAL STATEMENTS:

Balance Statement of the applicant and/or its promoter dated no less than ninety (90) days prior to the application. Comparative audited Financial Statements for the two last years, accompanied by reports on portfolio classification and maturity structure of assets and liabilities, as well as the applicant’s or its promoter’s position in the market of origin, according to major financial indicators (total assets, portfolio, deposits and equity) and its most recent rating by its supervising authority.

12. REGISTRATION AND AUTHORIZATION OF AUDITORS:

Certification by the Technical Board of the Ministry of Commerce & Industries of the Republic of Panama or the appropriate foreign authority noting that the CPA firm auditing the applicant’s and/or its promoter’s Financial Statements is duly authorized to exercise said profession.

13. REPORTS BY INTERNATIONAL RATING AGENCIES:

Information available on recent ratings of the applicant or promoter, or the Financial Group by Rating Agencies, according to internationally recognized rating standards.

14. YEARBOOK AND OTHER PUBLICATIONS:

Most recent Yearbooks and other publications containing information about the applicant and/or its promoter, or the Financial Group to which they belong, their organization, changes in corporate name, mergers or consolidations, operation turnover, domestic and foreign banking offices (subsidiaries, branches, representative offices and agencies), relations with other financial institutions, and general information on business results, as well as profit, growth and risk indicators for assets, liabilities and equity.

15. PROPOSED ACTIVITIES TO BE DEVELOPED/BUSINESS PLAN:

Description of the plans the applicant intends to develop (short, medium and long-term objectives) once the License is granted, indicating the Bank’s likelihood of success and its contribution to the Panamanian economy. (Article 33).

16. FEASIBILITY STUDY:

Financial projections of the applicant, and projected organizational functions and anticipated income-yield capacity of the bank.

17. PUBLICATION OF NOTICE:

Within fifteen (15) days after filing the application, a notice shall be published during three (3) working days in a newspaper of national circulation containing the following information:

a. Name of License applicant.

b. Name of applicant’s directors and officers.

c. Applicant’s business background.

d. Names and national identity card numbers or passport numbers of the Bank’s directors, officers and executive officers, including their titles.

18. OPPOSITION TO OBJECTIONS:

Should any objections from the general public be filed within fifteen (15) days following the date of the last publication referred to above, the applicant shall be entitled to refuting the same within fifteen (15) days after the objections are served.

19. PUBLIC REVIEW OF FINANCIAL STATEMENTS:

The applicant’s audited Financial Statements shall be available for review by the public at the Superintendency of Banks’ offices. (Article 36).

Remarks

1. Once the documentation and information required is reviewed and assessed by the Superintendency, a Temporary Permit shall be issued in order to notarize and register in the Public Registry the Articles of Incorporation of the new corporation or those of the foreign corporation, as the case may be. A decision shall be made within ninety (90) days after filing the complete application.

2. The Temporary Permit is granted for ninety (90) days.

II. STEP TWO: FINAL LICENSE

Formal consideration on the part of the Superintendent of Banks of license applications shall require the filing of a Petition requesting the appropriate BANKING LICENSE, according to the type of operations to be conducted. Said application shall be made within ninety (90) days following the granting of the TEMPORARY PERMIT.

The application shall be accompanied by the following:

1. Copy of a duly registered Public Deed containing the applicant’s charter or authorization, as the case may be.

2. Evidence that the capital has been duly paid or allotted, in accordance with applicable legal requirements.

3. In the case of Banks applying for International License, certification issued by the Banco Nacional de Panamá indicating that a restricted deposit has been made to the order of the Superintendency of Banks in the amount of B/.250,000.00. (Article 42).

4. Any additional information required by the Superintendency.

Remarks

1. The Superintendent of Banks shall be charged with discretion to assess the documentation submitted and adopt a warranted decision approving or denying the License.

2. Once a decision is made regarding the International License application, the Superintendent of Banks shall suspend any temporary restrictions on funds deposited with Banco Nacional de Panamá (BNP). In the case of International Banking Licenses, B/.250,000.00 of this deposit shall be kept with BNP to set up a Guarantee in favor of the Superintendency of Banks, as established by Article 42 of Decree Law 9 of 1998.

3. Applicants obtaining a Representative License shall only be authorized to operate REPRESENTATIVE OFFICES whose activities shall be limited to contacting third parties interested in carrying out operations with the Head Office. These offices shall require a Representative, in addition to the two (2) Attorneys required under Article 37 of Decree Law 9 of 1998. Representative Offices are not authorized to carry out any kind of operations from or within Panama.

The use of the corporate name of the Head Office represented by the Representative Office shall always be accompanied by the expression “Representative Office.”

1. Petitions filed shall bear any revenue stamps required by Law.

2. Documents executed abroad shall be legalized by the appropriate Panamanian authorities (Panamanian Consulate in the relevant country or by means of Apostille), and those executed in English or any other foreign language shall be accompanied by appropriate translation into Spanish by an Authorized Public Translator.

3. Any figures expressed in currencies other than Balboas or U.S. Dollars shall quote the exchange rate and equivalent amount in Balboas or U.S. Dollars.

As part of the war declared against international terrorism, the Government of the United States of America resolved today to freeze all assets that suspected terrorists and their respective organizations might have under the jurisdiction of the United States, and encourages other countries around the world to adopt similar measures in order to stop the cash flow to terrorist organizations.

Considering the above, the Superintendency of Banks of the Republic of Panama, in due compliance of applicable legislation and procedures, shall keep cooperating and will fully support any national and international efforts which contribute to prevent, combat and eradicate this flagellum against humanity.

By virtue of Law No. 41 of October 2nd, 2000, capitals laundering related to funds linked, among others, to acts of terrorism, is a criminal offense. Consequently, in order to detect accounts -if any- owned by individuals or legal entities with funds resulting from acts of terrorism, the Superintendency of Banks will continue to collaborate with the Financial Analysis Unity (FAU) and other instances, in matters of investigation, and exhorts all banks and trust companies under its supervision and regulation to be particularly diligent in this case with respect to the application of the “know your customer” rule, and in the reports which must, by law, be directly presented to the FAU by all Compliance Officers.

Panama, September 24th, 2001

The Superintendency of Banks hereby states and advises the public that the individuals or companies inclu ded in the following list do not have a Banking License issued by this Superintendency, allowing them to carry out banking operations within or from Panama:

1. Global Capital Bank
2. First Union Finance International, S.A
3. First Union National Ban, S.A.
4. Lancaster Group
5. BANK OF HELEN
6. Corporación Internacional de Inversiones, S.A. Representado por Carlos Benavides P.
7. The Harris Organization (Harris Organization’s Businesses)
8. Morrison Cross Financial Investment, Ltd.
9. Offshore Association of Central America, The Caribbean, Corp, Stern & Co, CORP., Time Publishing, Weal dth Advisor, CBS, Butterfield, Reimer & Associates, Corp, and Robo Enterprises, dont have neither banking nor fiduciary license under both Law Decree No. 9 of February 26th of 1998 and law No. 1 of January fift h (5) of 1984.
10. Capitalizadora Generar, S. A., dont have neither banking license under both Law Decree No. 9 of Febr uary 26th of 1998.
11. Southern Bank & Trust Company, Ltd.
12. Wealth Advisor
13. CBS
14. Butterfield Reimer & Associates, S.A.
15. Robo Enterprises
16. Capitalizadora Generar, S.A.
17. Pegasus Pacific Bank
18. Eurobank Trust British Isles (ETBI)
19. BANFIN
20. Tempus Bank
21. Investors of America
22. Empresa Noble Securities
23. Lion Heart and Trust Company Limited
24. FIRSTDIRECTBANKING
25. Sovereign Chartered International Bank.
26. Tempus Bank, Montenegro
27. Tempus Account Center Corp.
28. Sociedad de Ahorro y Préstamo para la Vivienda Mi Techo, S.A.
29. Panamerican Group, S.A. / Panamerican Holding
30. Universal Financial Group / Universal Financial Investment Group, S.A. /UFGroup.
31. Adriatic Bank, Inc.
32. Truscoban International Bank, Ltd.
33. Multibanka
34. Biz Trade Center of Panama
35. International Finantial Service
36. Finor Associates, Ltd.
37. Finor Finance Corporation
38. Caja Hipotecaria Centro Sur, S.A.
39. NYC FINANCIAL CORPORATION
40. Regulación de las Empresas Capitalizadoras
41. Supervisión de Asociaciones, Sociedades de Ahorro, Préstamos y Crédito para la Vivienda
42. INVESTMENT BANK OF AUSTRIA
43. Development & Holding Bank of Belize
44. BANK OF NG, N.A.
45. BANCAYA INTERNATIONAL INVESTMENT CORPORATION

Since the enactment of Public Law 6 of 2005 (Whereby a Fiscal Equity is Implemented) there have been some publications, specially on the internet, that in a vicious and distorted way have been spreading misinformation regarding the effects of Law 6. This information could affect negatively our national economy and the legal security enviorment for foreign investors in the Republic of Panama. Hence, the Economy and Finance Ministry clarifies the subject as follows:

FIRST: The pensions and/or retirement benefits that foreign residents of Panama receive from abroad, DO NOT PAY Income Tax in our country, neither are obliged to declare such income.

SECOND: Law 9 of 1987, “Whereby exemptions are granted to Retirees, Pensioners and persons retired from active live”, is still in force.

THIRD: The interests generated by savings accounts (i.e. Time Deposits, Regular Savings Accounts) DO NOT PAY Income Tax in Panama.

FOURTH: The Republic of Panama only taxes income that is generated within the territory of the Republic of Panama. Therefore, foreign source income is not taxable in Panama.

We invite those who have inquiries regarding the effects of Law 6 of 2005, to contact with the General Department of Revenue of the Economy and Finance Ministry (507) 207-7753; Fax (507) 227-3852, Email: dgireclamos@mef.gob.pa, Website: www.dgi.gob.pa

Because of much interest on our Thetaworld Offshore Services we have decided to launch the new interactive website which promotes Panamanian Corporations as a business vehicle for international trade and commerce purposes and asset protection as well.

We welcome all readers to join us in the discussion and to contribute with messages or questions.