Panama officially the Republic of Panama , is the southernmost country of Central America. Situated on the isthmus connecting North and South America, it is bordered by Costa Rica to the northwest, Colombia to the southeast, the Caribbean Sea to the north and the Pacific Ocean to the south. The capital is Panama City. Explored and settled by the Spanish in the 16th century, Panama broke with Spain in 1821 and joined a union of Nueva Granada, Ecuador, and Venezuela - named the Republic of Gran Colombia. When the latter dissolved in 1830, Panama and Nueva Granada stayed joined. Nueva Granada later became the Republic of Colombia. Given the fact that Gran Colombia did not exist anymore, with US backing, Panama seceded from Colombia in 1903. The Panama Canal was built by the US Army Corps of Engineers between 1904 and 1914. In 1977, an agreement was signed for the complete transfer of the Canal from the US to Panama by the end of the century.
Tourism in the Republic of Panama kept its growth during the past 5 years due to the government offering tax and price discounts to foreign guests and retirees. These economic incentives caused Panama to be regarded as a relatively good place to retire in the world. Real estate developers in Panama have increased the amount of tourism destinations in the past five years because of the interest for these visitor incentives. The amount of tourists arriving between January and September 2008 totalled 1,110,000. This was a significant increase of 13.1% (128,452) over the previous high of 982,640 during the same period in 2007.The arrival of tourists from Europe to Panama grew by 23.1% during the first nine months of 2008. According to the Tourism Authority of Panama (ATP), between January and September, 71,154 tourists from the Old Continent entered the country that is 13,373 more than figures for same period last year. Most of the Europeans who have visited Panama were Spaniards (14,820), followed by Italians (13,216), French (10,174) and British (8,833). From Germany, the most populous country in the European Union, 6997 tourists arrived. Europe has become one of the key markets to promote Panama as a tourist destination.In 2007, 1.445.5 million entered into the Panamanian economy as a result of tourism. This accounted for 9.5% of gross domestic product in the country, surpassing other productive sectors.
Panama's Law No. 9 is still the most modern and comprehensive law for the promotion of tourism investment in Latin America and the Caribbean. In so-called Special Tourism Zones, Law 8 offers incentives such as 100% exemption from income tax, real estate tax, import duties for construction materials and equipment, and other taxes. Panama has declared different parts of the country as Special Tourism Zones which are benefited with multiple tax exemptions and tax holidays.
