Tourists and Investors Get a Warm Welcome in Reykjavik, Iceland

July 29, 2008 at www.investdest.com

Reykjavik is a small capital city in the tiny island nation of the north Atlantic -- Iceland. In a place where unemployment, violent crime, and smog is nearly inexistent, it really is a refuge both physically and economically.

Iceland is one of the least visited western European countries, but that's about to change. Iceland Air now has new connections to the East Coast and continental Europe. Nature loving tourists will love the country's rugged coast with whale watching opportunities, green fields and long days in the spring/summer, and of course -- the geysers and geothermal spas (hot springs). The country's many hot springs, such as Blue Lagoon (pictured below, courtesy of Icelandic Tourist Board) is known for its purifying and revitalizing effects.



The country's recent surge in tourism is a testament to its unique landscape and endless attractions. Tourism has grown tremendously, averaging nearly 15% since 2000 and it seems to be picking up, not slowing down. In 2007, for instance, the number of tourists in Iceland grew by over 20% compared to 2006 (See the European Travel Commission Report). Since the country welcomes less than 400,000 visitors annually and since there's plenty of room for growth, cashing in on the tourism industry would be a profitable idea.

It's well worth mentioning that Reykjavik has also become a cruise ship port of call. As cruising grows in popularity and as more and more tourists seek northern Atlantic and Balkan itineraries, Reykjavik will increasingly become a desired destination for both premium and luxury vessels. So you can expect even further opportunities.

The city itself is a quaint yet vibrant mix of history, modern conveniences, and natural beauty. Near the southeast coast, there are views of the pristine ocean and mountains as well. Reykjavik bears striking resemblance to Norwegian coastal cities with its wooden colorful homes, cobblestone streets, and baroque national landmarks. Tourists will love local cuisine with fresh seafood, lamb, and of course plenty of great beer.

Travelers will undoubtedly take note of the clean and fresh air that's due not only to the sparsely populated and underdeveloped landscape, but the country's energy use. Unlike other developed nations, hydrogen powers most cars in Iceland. Now, Iceland is one of the most oil-independent nation on earth. So the rise in cost of oil won't make Iceland as prone to inflation over the next years as elsewhere.

Reykjavik is by no means cheap, but compared to other important cities in Western Europe, Iceland is at least better. The recent currency depreciation trend made Iceland a whole lot cheaper since it was named one of the most expensive cities in 2005-06 studies. For example, a four-star hotel such as the Radisson would run you US$ 208 compared to about $ 250 in New York. A cup of coffee or a hot dog will run about $3.50.

Doing business in Iceland is very easy. Forming an EHF corporation takes a couple of days, just US$ 6,200, and minimal individuals. New business ventures get major incentives like a 12% refund of costs for launching film or TV production. But best of all is that Iceland has much lower corporate taxes than in EU member states, having been reduced from 30% to just 18% in 2002. For more information, please visit www.invest.is

Investment Opportunities

The country is a literal hotbed of energy. You may be aware that Iceland has and uses its own geothermal energy to power up Reykjavik. Metal producers have thus moved smelting operations to Iceland where "free" energy is readily available to cut energy costs. With the rising prices of oil, natural gas, soybeans, and other energy commodities, expect many producers to fail over the next few years except for the following attractive long term investments:

BHP Billiton (BHP) was the first major aluminum producer to set up shop in Iceland back in 2006 and has been an utter success since then.

Alcoa (AA) followed suit and moved smelting operations to Iceland in 2007 and operating expenses are down significantly since.

Rio Tinto (RTP) bought Icelandic smelter Alcan for US$ 38 B in order to join the other major producers at cutting costs with geothermal energy.

Century Aluminum (CENX) faced several hurdles as conservationists vowed to "save Iceland" and cease further construction of smelting facilities. Century released its plan earlier this year to begin smelting by 2010. But in the meantime, energy costs continue to drain the company. Perhaps it'll be worth buying next year.


As previously mentioned, the Icelandic Krona plunged to a new low against most major currencies on concerns that its banking sector would have trouble this year. The country's central bank reassured investors and even raised key interest rates to 13% to encourage holding Kronas, their highest rate ever. The Krona is terribly oversold and will rebound this year as banks and institutional investors seize the opportunity to take out loans in currencies with low interest rates, like the US Dollar, Swiss Franc, or JPY and re-invest them in Icelandic Krona (currency carry-trades).

The 13% Icelandic savings bond might be enough to lure you there, but the imminent increase in the Krona's value will add to your savings bond investment.
If this sounds attractive to you then the easiest way to obtain one is through the following:

Everbank.com has had online bank accounts available with the ability to get a 3-month certificate of deposit (CD) at 13% . Contact them for further details.

With its emerging tourist industry, business-friendly environment, an undervalued currency, a double digit interest rate on savings bonds and low energy costs, Iceland truly is a destination investor's dream.

Photos courtesy of the Iceland Tourist Board

Dakar: Your Gateway to West African Opportunity

Originally Posted on July 16, 2008 at www.investdest.com

Dakar is the western-most African city on its way to becoming a major regional business hub. Located in French/Wolof West African Senegal, Dakar enjoys a tropical climate with distinct wet and dry seasons. Situated on the Cape Verde peninsula, the city is surrounded by sandy beaches, a thriving harbor, and has a beautiful mix of old French and modern architecture.

Popularized in the West by the annual "Dakar Rally," the off-road race from Paris to Senegal's capital draws thousands of tourists and grabs media attention. Besides the race, the French have long vacationed on Senegal's beaches as airline connections to Paris are convenient and affordable

Dakar is a major regional financial center and is the primary choice for Europeans doing business in West Africa. For one, its home to more banks than any other West African city. It's home to BCEAO, the central bank of the West African CFA currency as well as home to many international NGOs. Dakar's even the preferred regional port for transatlantic and European shipments. It's strategic location ensures that capital will continue to flow into the city for the foreseeable future.

Dakar's Senghor airport is a stop-over for transatlantic flights between the East Coast and South Africa. Delta Airlines, the only American air carrier in Africa services Dakar. Air connections are also available to the rest of Africa, Europe, and the Middle East with such air carriers as Air France and Saudi Arabian Airlines.

The Economy

Senegal's economy is developing at a brisk yet healthy rate. Its gross national product (real growth rate) has been consistently averaging a robust 5.5% since 1997 and its industrial production rate is about 3% with no end in sight. About 70% of Senegal's labor force is engaged in farming and arid neighboring countries like Mali also depend on Senegal's food exports. Awakening giant, India has become Senegal's largest importer. As India continues to develop, Senegal will undoubtedly become even more economically powerful and its reliance on Senegal's fish, cotton, nuts, and vegetables will keep things moving. China has also paved the way for an increase in Senegalese imports, especially textiles, farm products, fish, and minerals by announcing tariff exemptions on all Senegalese products.

Safety

You'd be happy to know that Senegal has one of the lowest violent crime rates in the world. According to INTERPOL data, the murder rate was just 0.33 per 100,000 people. Compare that to Japan's 1.41 rate and the US' 5.5 rate. Rapes, thefts, and robberies are all far lower than even Japan and of course, the US. After Iceland, Senegal is the safest country in the world! Tourists and those who frequent Senegal will tell you that the nation is home to some of the friendliest and most hospitable people you'll ever meet. You'll also like to hear that the country has one of Africa's lowest HIV/AIDS rates at just 0.8%.

Senegalese are often described as tolerant, warm, and hospitable. In fact, "Senegal" literally translates to "our boat" signifying that everyone present is together in the same boat. With such a diverse population, it's easy to see how many religions (Muslims, Christians, Buddhists, Native religions, etc.) and languages (Wolof, Halpulaar, French, etc.) can peacefully coexist.

If political stability is your concern, then Senegal is your haven. Last year's presidential election was declared, "free and fair" (BBC Article) with no reports of political killings (Russia, for example did have politically related killings last year). It's worth mentioning that the French still maintain a military base here.

Tourism Potential

Since the 1970's, Dakar has been a tourist destination for the French; however Delta's new service from the US to the airport, low costs, the spectacular beaches, and the great weather will certainly bring new tourists for the years to come. The center city, or "Le Plateau" has a very European feel. The narrow streets are lined with a blend of French colonial style buildings and modern high rises. The city's small parks, squares, and the shore on three sides of this peninsular city provide a relaxing relief. You'll even find several beach resorts in and around town from Club Med to Le Meridien in the northern quarters of the city, N'gor and Yoff. With such assets, Dakar is an ideal developing city.

As cruising proves to be the cheapest way to travel and vacation, it's worth noting that Dakar has increasingly become a high-end cruise port of call and will attract more cruise ships within the next few years. Tapping into the increase in cruisers with a shop near the port area could give you an excellent business opportunity.

Outside of Dakar, tourists can venture to a number of beaches, national parks, and historic landmarks. Many tourists travel by ferry to Gorée Island where they'll find Fort d'Estrées, a nineteenth century French fort. Or, head a few hours north to the picturesque French colonial shore town of Saint-Louis. Beyond the cities and shore, is Senegal's vast landscape teeming with elephants, lions, aardvarks, crocodiles, and ostriches as well as lots of endemic species.

Wedged in the middle of south central Senegal is the small, wealthy, oil-rich nation of the Gambia. Here, tourists will find Western Africa's own Stonehenge at Wassu, an ancient stone circle that is a growing tourist attraction. Like elsewhere in the region, everything is accessible from Dakar.

Open for Foreign Investment

The Senegalese government is open to wholly-owned foreign corporations operating in the country and has tax exemption incentives for foreign investment in the Dakar area. You'd qualify for these incentives with just US$ 7,000 and by employing 3 Senegalese (for more information, see aabf.org's Senegal investment guide or visit APIX, the national investment office). With so many foreign banks, including CitiBank, you'll be able to take care of all your financial transactions with ease. With regards to property rights, foreign investors are treated equally with a legal system based on the French law. Operating a business can certainly be an easy and inexpensive experience.

We're not the only ones who think Dakar is a great investment destination. According to the IMF's late 2007 forecast, Senegal will see an 800% increase in foreign direct investment by 2010. Just take a look at these groups that are planning to get a piece of the action:

- Jafza Jebel Ali Free Zone (Economic Zones World/Dubai World) signed a contract for the development of the Dakar Integrated Special Economic Zone (Jan 2008). The project expects to host 1,000 companies, creating employment growth for the next 2 decades and will be integrated with tourism, residential, and commercial development

- In October 2007, Senegal handed over developing and operating duties of Dakar's shipping container terminal to DP World (Dubai World).

- Aureos Capital announced in October 2007 its pledge of US$ 2.86 M to Compagnie Sahelienne (Matforce) which sells car and energy equipment.

- Iran bought 34% of state-owned oil producer, SAR in September 2007.

- Last year, ArcelorMittal announced plans for a US$ 2.2 B iron ore mine project in Senegal.

So if you're searching for a safe getaway spot where you can live bigger for less, have great weather, and access to a cosmopolitan city, the shore, and nature, then the Dakar region is for you. If you're looking to start a business in a robust and business-friendly economy, or trying seeking a tax haven, then Dakar is certainly a great investment destination for you. Feel free to send us questions and comments on this or any other great investment destination.

Panama Means Abundance

Last year, we took a trip to witness the wonders of Panama, the isthmus connecting the Americas. Panama is truly amazing and that's why so many Americans and Canadians have chosen to visit, live, and invest there. The country is geographically ideal because it lies below the hurricane belt and has few recorded natural disasters. There are hundreds of miles of undeveloped shoreline on either the Pacific or Caribbean side. A mountain range also runs through the country and provides a cool relief from the tropical climate on the coast. The landscape gets an abundance of rain and has an abundance of food and wildlife.

This isthmus boasts the best business climate in the world. In fact more companies incorporate in Panama than anywhere else with over 400,000 incorporated in total. That's because forming a Panamanian corporation is seamless and inexpensive. Its flexible corporate law leaves no restrictions on foreign-owned companies or mergers and acquisitions. Moreover, there are tax exemptions for real estate, tourism, and development investments in Panama. So, if you're thinking of establishing a corporate entity in a great offshore location then we recommend the following service since because they've been in the game for a long time and will take good care of you: OffshoreXplorer (corporate and banking services).

Panama's key industry has become banking as strict privacy laws make the country an increasingly popular tax haven. International and national banks in the centro bancario (50th Street area financial district skyscrapers) are also abundant and are fueling the local economy. HSBC, one of the world's largest banking institutions has made Panama its Latin American regional hub and other banks are following suit. If you'd rather not hold US dollars in an offshore account, there are some banks that have euro accounts that are again, tax-free and subject to the world's most strict privacy laws. Read the following BBC article on how Panama has built itself as the "Switzerland of Latin America."

Although some would be happy to know that the USD is used in Panama, you'd be happier that the country's rate of inflation is far lower than that of the US. That's because without a central bank, you see a true market economy at work. Click here for further information.

I know what you're thinking, Panama is right next to that violent and drug-ridden country Colombia. Well, the border between the two countries is a thick mountainous rain forest with no roads or rail between them at all. In fact, Panamanian police have been at the forefront of stopping illegal drug transits. Just a few weeks ago, they seized 6 tons of drugs in transit as explained in the AP article. Panama is also one of the safest countries in Latin America and violent crime rates here are less than in the US. Once again, police are ever present and banks and businesses ALWAYS have armed security (something that I rarely see in the US).

In addition, water is safer to drink here than in the US. Its water treatment system is more modern and was built by the US military. You'll find an abundance of fresh running water at any business and Panamanians know that they're blessed. So, clearly, Panama will give you care-free living.

Without a doubt, Panama is the most attractive place in the world for retirees seeking to live better for less money. If you receive retirement income, you're eligible for discounts on electricity, health care, movies, restaurants, and transportation. Coupled with beautiful weather and a low cost of living, there's really no better place for retirees. Best of all, you won't have to worry about speaking Spanish because an increasing number of Panamanians speak English. Don't just take our word for it, just read the following article on why Panama is Paradise for Retirees - MSN Money

The country's claim to fame is undoubtedly the Panama Canal which is one of the world's greatest engineering feats and a vital point for international shipments. This is why foreign investment in in the country must continue exponentially. Presently, the economic growth rate is at a healthy 6% and expected to remain steady or increase in the next decade. In fact, commerce in the canal is growing so much that the country has begun its widening project, the implications of which are beneficial to Panama's long term economic prosperity. See article here.

Panama City's Up & Coming Neighborhoods

1. Casco Viejo (Panama City's Colonial District)

Visiting Casco Viejo was a profound visual experience as contrasts existed harmoniously. For one, the neighborhood is home to the national President and the poorest people in town. Secondly, it's where you'll see both French architecture in dilapidated residential areas and Spanish architecture in churches, the cathedral, the theater, and government buildings. Thirdly, it offers wonderful views of either the city's modern skyline on one side and the Bridge of the Americas over the Panama Canal on the other. It's also where most Panamanians avoid because of its reputation as a dilapidated and crime-ridden area.

We decided to stay at a small hotel close to the government buildings but still a short walk from the impoverished community. Many foreigners had begun developing old French style homes and buildings. There were also lots of foreign tourist groups that ventured to see this old colonial city in partial ruins. Little did I know then, that by Panamanian Decree Law #9, that you could get great incentives for investing in property in Casco Viejo. As previously mentioned, there's been a huge surge in interest in the neighborhood because it's really the only place in the city where you'll find such splendid architecture and history.The neighborhood had lots of police presence and was safe by our standards. As development continues, your investment in this community will certainly pay off for the following reasons: it's in a prime tourist location; it's located between the canal and the heart of the city; and it's a growing tourist attraction. Just look at some of the photos below:

2. Fuerte Amador

The tourism industry here is small but steadily increasing. There are very few beach resorts and it still attracts less western vacationers than neighboring Costa Rica. But, we know first hand that there has been a surge in interest in Panama Canal Cruises which is expected to increase by 100% in the next decade. All those tourists will stop at Fuerte Amador, a strip of land next to the canal with stunning views of Panama City's skyline and cheap, modern store fronts. Your potential business in Amador is accompanied by other restaurants, clubs, bars, and shops that service not only tourists, but the increasingly wealthy Panamanian club goers. There's also a large convention center located here and a Smithsonian marine wildlife research center.

David, Panama

Located six hours west of Panama City near the Costa Rican border, David is the country's second largest city. Many travellers make a stop in David on their voyage between Panama City and San Jose. There are presently only a handful of hotels, hostels and casinos in the city and investors will clearly see the need for more. After the national government develops a highway linking David to the capital city (there's currently just a 2 lane road with some portions unpaved), then more people will drive, more buses will make the transit and David will grow faster than ever.

When we were there David was in the initial stages of development. This city of 100,000 had no highways (only small roads), there's no government run transportation (simply private bus operators), few cars on the road, few large business, and a very small airport. The area outside the city has few paved roads and very little businesses. Don't get me wrong, it's a thriving community, but a small and underdeveloped one. The city is at the heart of Panama's principal meat and agricultural region.

What makes David so special is its warm sunny climate and its proximity to both the mountains, a clean river, and a pristine shore (not to mention that it's located just 30 minutes from the Costa Rican border). Whatever you're looking for, the David area has it. But the reason it's a better investment destination than Panama City is because it's 30 - 50% cheaper. There's also less crime, traffic, tourists, noise, and pollution and it hasn't nearly developed--yet.

David could also share in the country's burgeoning banking industry. It's worth reminding you that Panama is the new Switzerland and the banks don't all have to be limited to Panama City. When we were first in David, there were more loan and pawn shops than banks, the complete opposite of in Panama city. Downtown David, or the "centro bancario" had a handful of national banks, but new international banks like HSBC had recently opened an office there. Although most of the buildings downtown were no more than 3 stories, there were two soon to be tall bank offices buildings under construction. Clearly, David's banking center is in the beginning stages of development.

Up & Coming Neighborhoods near David

1. Las Colinas

This neighborhood is located in Dolega, a larger community just north of David on the main highway that connects to Boquete, a popular mountain town. Very new, inexpensive suburban neighborhoods dot the area of Dolega, but on the main roads, you'll find larger, more expensive ones. Best of all is that area is right next to the upper David River, a clean, clear stream with an abundance of fish, beautiful stones, and a waterfall. This area is clearly where most Westerners live and also home to the wealthiest in David. Within a half mile, in the northern section of David, you'll find: a KFC, TGI Fridays, a Toyota Dealer; produce stands, bars, authentic restaurants, and bars; a shopping Center with an El Rey supermarket, sporting goods store, and a furniture center. Even better, you'd be just a stone's throw away from a Panamanian national league baseball stadium (the Chiriqui team).

Last year, new homes being built in neighborhoods such as Las Colinas de Santa Cruz were priced from $ 30,000 with monthly payments at about $160. These one floor houses typically have 3 bedrooms, 1 bathroom, a kitchen, living room, dining room and a doorless garage. They're built with solid steel rods and concrete (they'd never think of building with wood!) and have tin roofs so your ceiling stays dry. You couldn't put a price on the stunning views of the hills and mountains from our backyard and huge red boulders from our front yard. The stunning landscape is also home to a few farms and wooden areas with exotic birds. A few miles north of Las Colinas, you'll encounter new home neighborhoods closer to the mountains. They're larger and have even better views of the mountains. Since they're on higher elevation at at the foothills of the mountains, it's cooler and more breezy than sweltering David. For 4 bedrooms and 2 bathrooms in a gated neighborhood, homes run anywhere from just $ 45-60,000

2. Cerro Punta

If you'd rather have the mountains, cooler weather (50's to 70's ˚F), and serenity, then head to the Cerro Punta area. When we first took a day trip there, we were blown away. It's cool and rainy and has stunning views of the tallest mountains in Western Panama. It's also Panama's principal agricultural center, producing lots of fruits, vegetables, and coffee. You should invest in the Cerro Punta area because it's a less popular, but up and coming area. Westerners have long popularized Boquete, a very gorgeous small mountain town founded by the Swiss and Germans who came to the region decades ago, planted a bunch of pine trees and built homes with Alpine architecture. Property is much less expensive in Cerro Punta and has much less tourists and American retirees. You're just a scenic hour away from David, but you'll still have the convenience of restaurants (Panamanian, Chinese, and a few American), bars, and markets. Lots cost less than $ 10,000 per acre and could give you a comfortable and beautiful vacation or investment property.

3. Playa de la Barqueta

David is about a half hour's drive from the Pacific shore and the best kept secret is a wonderful beach at Playa de la Barqueta. Beachfront homes with 2 levels run just $200,000 in gated communities with 4 or more bedrooms. The beach is has black sand and is lined with tropical and coconut trees. Very few people frequent the beach but there is a restaurant, convenience store, and bar/club adjacent. For under $200K, you can get a condo at an adjacent gated development with its own clubhouse/restaurant.

4. Bastimentos, Bocas del Toro

Finally, if you're seeking your own Caribbean island retreat, then head about 100 miles north of David through a spectacular national park rain forest, and you'll come across the islands of Bocas del Toro (which literally translates to Mouth of the Bull). The islands are only accessible by taxi boat (which runs between $2 and $4). Here, the beaches have white sand with shaded, unfettered shorelines. Bastimetos was a our choice because it was less touristy and developed than Bocas del Toro Island, the center of regional commerce. On Bastimentos, we found a few hostels, restaurants and shops in the main town which consists of just one pedestrian street along the western coast. Crime was inexistent and the people, mostly English-speaking, seemed happy on this island of just a few hundred inhabitants. The beaches on the Caribbean side were amazingly beautiful, undeveloped, and secluded. For me, Bastimentos was the epitome of Paradise.

As you can see, not only does Panama offer a significantly lower cost of living, a business-friendly environment, a safe banking industry, you'd get an abundance of investment opportunities in a safe, beautiful, and diverse landscape. If you'd like more information on acquiring homes or land in any of these up and coming neighborhoods then contact us.