WHY PANAMA and WHY TEAK?

Perfect Location
Teak will only grow within 20 degrees of the equator. Although not indigenous to Panama, this tiny country provides a uniquely perfect geographical, climatic and geomorphologic condition for the production of high quality teak. Some of the fastest growth rates of teak in the world have been recorded in Panama.

Government Sponsored Residency and Tax Incentives
Foreigners receive special benefits by engaging in reforestation in Panama. The Panamanian government established Law 24 on November 23, 1992 resulting in the following advantages:

• Resident status for foreigners with a minimum investment of $40,000.
• 100% of all costs incurred in reforestation projects are tax deductible.
• All profits from reforestation are 100% tax-free.

WHY TEAK?

Approximate Market Data for One Hectare of Teak

Benefits of Owning a Teak Plantation

• Expenses are up to100% deducible from your income tax declaration.
• You will own a large quantity of valuable teakwood ready for export
• With your investment of $40,000.00 or more, you may apply for resident status in Panama.
• In Panama there are fiscal incentives for reforestation projects.
• Can apply for Panamanian Passport after 5 years of residency.

Teak is Unique

Teak is the world's most valuable hardwood. It is used for outdoor/ indoor furniture, industrial use and it adorns the most elegant homes around the world. Also, excellent for marine use - teak yachts, for example, are of paramount quality.

Supply and Demand for Teak

Consider these facts:

• Teak was the only species for which log prices rose in Asia through 2000-2001, as the demand for furniture and other joinery products made from this species remained firm in European, Japanese and Thai markets. (Source: http://www.itto.or.jp/live/index.jsp )

• China at 6.1 million ³ (42% of all consumer country log imports) remained the world's largest importer of tropical logs in 2000 after overtaking Japan in 1999. China's imports jumped 27% from 1999 levels. (Source: http://www.itto.or.jp/live/index.jsp )

• Tropical hardwood log imports by the Inernational Tropical Timber Organization (ITTO) consumer countries rose by 9.2% in 2000, to 14.4 million. If imports by producing members are taken into account, total 2000 tropical log imports by ITTO members were almost 18.1 million ³, 10% more than in 1999 (Source: http://www.itto.or.jp/live/index.jsp )

• Myanmar (former Burma) currently produces 80% of the worlds teak supply. The NATIONAL GEOGRAPHIC SOCIETY estimates that the last teak forest in Myanmar will be logged by 2010. Also, countries around the world, driven by environmental concerns are banning the importation of tropical hardwoods, including teak unless they come from sustainable yield sources.
• Thailand once had 100 million rai (6.25 rai = one hectare) of natural teak forests. Today, natural teak forests bascially no longer exist anywhere in the world.
• Some countries in Africa and Asia have teak plantations but the political turmoil and conflict in these countries make long-term investment very hazardous.
• Panama is one of very few countries that has opened the timber industry for private sector development with a combination of government incentives.

Teak Commands a Premium Price

According to the International Tropical Timber Organization web site, the average price for assorted quality teak logs during March 2003 was US$846 per hoppus ton. Actual prices ranged between US$716 and US$1133 per ton.
Recently, price increases have been even more dramatic. Lumber that was selling for USD $3.00 to $4.50 per board foot (B/F) is now USD $6.00 to $10.00 for the same specification.
For more information on current prices for teak see this link:

Source: http://www.itto.or.jp/live/index.jsp