Legal & Fiscal · 2026

The incentive law we said
was coming just arrived.

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the fiscal-credit model — the one that survived a Supreme Court challenge and a hotel-industry backlash before being repealed in 2022–2023 — with income tax and property tax exemptions instead, running through December 2036.

Aug 26Cabinet approval
Sept 14Presented to Assembly
Dec 2036Regime runs through
$500KMin. qualifying investment, top tier

Sources: La Estrella de Panamá, Panamá América, Ministerio de Relaciones Exteriores, Autoridad de Turismo de Panamá (ATP).

What's actually in Bill 31-26

The bill folds the incentive provisions previously scattered across Law 80 and its since-repealed amendments into one law, and swaps the old tax-credit mechanism for straightforward income and property tax exemptions instead.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.

Where the incentive is strongest — and where it isn't

Panama's Caribbean coast

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.

Everywhere else outside the capital

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.

Not an automatic personal tax break

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.

Where this connects to what's already for sale

Two regions in our own portfolio sit squarely inside this bill's geography. Bocas del Toro — Panama's Caribbean archipelago, where our pre-built short-term rental inventory is located — falls inside the top incentive tier if a given project registers under it. Buenaventura, our Pacific coast plots community, sits in the second tier: outside the capital, in a corridor eligible for up to 10 years of exemption on new qualifying development nearby.

What we flagged in August, now on paperIn our piece on Law 80's actual 2026 status, we noted the ATP was quietly drafting a replacement law expected to move away from tax credits toward income, property and import exemptions — differentiated by project type, location and sustainability. Bill 31-26 is that replacement, now in front of the Assembly. It still needs to clear three legislative debates before it's law; nothing here is final yet. See our full Law 80 breakdown — and for the separate, further-along debate over a short-term rental tax, our Airbnb bill explainer.
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