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Benefits of Investing in Teak

Benefits of Investing in Teak



An Affordable Permanent Residency Visa in Panama

The principal benefit to the teak ownership program is very affordable permanent residency in Panama.   The residency programs offered by Panama are some of the most appealing in the world, entitling you to many perks and a handful of special benefits.

All resident women over the age of 55, and men over the age of 60 are eligible for:

  • 50% off entertainment (movies, theaters, concerts, sporting events)
  • 30% off bus, boat, and train fares
  • 25% off airline tickets
  • 25% off monthly energy bills
  • 30-50% off hotel stays
  • 15% off hospital bills (unless insurance applies)
  • Tax exemption on the importation of household goods up to $10,000
  • Tax exemptions every two years on the importation or local purchase of a car

With a beautiful, natural landscape, attractive tax incentives, and world-renowned residency programs, Panama is home to an estimated 20,000 US and Canadian residents right now. The cost of living is affordable, the weather is tropical, and the opportunities are ample.  More and more folks are visiting, living, and retiring to Panama to enjoy these luxuries and a better-quality of life.

The specific law that Residency Candidates will be processed under is the Executive Decree 343, otherwise known as the Permanent Residence for Nationals of Specific Countries (NSC), also known as the Friendly Nation’s Visa.  This permits residents from the United States, Canada, and 45 other countries to apply and recieve permenant residency if they meet some very simple critera.

This program allows for permenant residency for those candidates who purchase real estate or open a business in Panama.  The requirements for this residency are straightforward and also include the requirement to establish a local bank account with an opening balance of $5,000, and $2,000 per dependent.

Ownership of a Teak Plantation with Harvest Proceeds in 6 years

Owning Teak is physical ownership of an agricultural hard asset combining land and production of a commodity in high demand historically. A conservative plantation uses a 25-year harvest cycle, and Hardwoods has elected to base its harvest projections on a full 25-year growing period.  The trees are currently 19 years old with an additional 6 years to harvest.  Harvest projections are between $20,000 per 1000 square meter (approximately one-quarter acre) plantation for wholesale of logs at today’s teak price with an upside potential of $35,000 if sold in boards and assuming a 6% price growth for Teak lumber.  Teak prices have risen steadily averaging 6% over the past few decades and any future rise above this rate in Teak prices will create an even greater harvest yield.

Asset Protection, Diversification, and Wealth Preservation

Diversification.  By owning a teak plantation in Panama, teak owners also gain geographic and business type diversification of assets.   A teak plantation is a product that is outside of the traditional markets and physically outside of the United States.  International diversification is a critical element to any multi-flag asset protection strategy.

Tax deferral. What you own are long term assets (the trees) that will be taxed at harvest. Literally your assets “grow” tax deferred.    Like a growth stock, there are no dividends or cash flow to be taxed.   Consult a tax advisor for specific tax questions for harvest proceeds.

Asset Protection. This is a non-liquid asset that is not redeemable prior to maturation of the product. This makes it an unlikely target for creditors or plaintiffs attorneys.