Back in August we flagged that Panama's tourism-incentive framework was quietly being rewritten after its old tax-credit window expired. On September 14, that rewrite — Bill 31-26 — reached the National Assembly. Here's what it actually contains, and where it lines up with what's already for sale.
On August 26, 2026, Panama's Cabinet Council approved Bill 31-26 for submission to the National Assembly; it was formally presented on September 14. The bill consolidates the country's scattered tourism-incentive laws into a single framework and replaces the fiscal-credit model — the one that survived a Supreme Court challenge and a hotel-industry backlash before being repealed in 2022–2023 — with income tax and property tax exemptions instead, running through December 2036.
Sources: La Estrella de Panamá, Panamá América, Ministerio de Relaciones Exteriores, Autoridad de Turismo de Panamá (ATP).
The bill folds the incentive provisions previously scattered across Law 80 and its since-repealed amendments into one law, and swaps the old tax-credit mechanism for straightforward income and property tax exemptions instead. It also explicitly aims to spread new lodging investment beyond Panama City, into regions the ATP has flagged as under-developed relative to demand — reducing barriers for new projects, and extending benefits to a broader range of tourism products, not just hotels.
Lodging projects with a minimum $500,000 investment on the Caribbean side — Bocas del Toro among them — qualify for up to 15 years of income tax and property tax exemption, plus import facilities on construction materials and equipment. The richest tier in the bill.
Projects outside Panama City but off the Caribbean coast — the Pacific corridor around Buenaventura, Boquete, Playa Venao, Valle de Antón — qualify for up to 10 years of exemption. Real, meaningful, and still well ahead of what's on offer inside the capital.
The exemption attaches to the qualifying project — typically the developer or operating entity making the $500K+ investment — not automatically to whoever later buys a single unit or lot inside it. Worth asking directly whether the specific property you're evaluating sits inside a registered, qualifying project.
A tax exemption doesn't build a hotel by itself. But a decade-plus of income and property tax relief is exactly the kind of long-dated bet that tends to show up, a few years later, as the amenity floor, the licensed rental program and the developer track record buyers actually diligence.
An update on September 21: further Assembly reporting laid out the bill's eligibility list in more detail, and it's more restrictive than "any lodging investment" — worth stating plainly rather than glossing over. Eligible activities are registered tourism lodging (hotels and new accommodation establishments), tourism products such as interactive museums and cultural or nautical experiences, marinas, and congress/events infrastructure. The bill explicitly excludes standard residential or commercial real estate developments, shopping centers, independent restaurants, and private marinas from these incentives.
Two regions in our own portfolio sit inside this bill's geography, but geography alone doesn't qualify a project. Bocas del Toro — Panama's Caribbean archipelago, where our pre-built short-term rental inventory is located — sits inside the top incentive tier only for projects that register as tourism lodging under the new framework, which our residential STR inventory generally does not. Buenaventura, our Pacific coast plots community, sits in the second-tier region, but the same distinction applies: raw land and residential plots aren't the eligible activity here — a registered tourism lodging or nautical project built on land in that corridor could be.
It replaces Law 80 with income and property tax exemptions running through 2036 — approved by Cabinet and presented to the Assembly on September 14, 2026.
As of this post, it had been presented to the Assembly — check our latest coverage for current legislative status, since bills can change before final passage.