Flanking Panama City's gleaming high-rises and cosmopolitan allure lies the Old Town, or Casco Viejo, which thrived in the 17th century in the heyday of Spanish colonialism in Panama. It sits on the waterfront of the Bay of Panama, and the arc of the city can be seen rising in the distance. Much of the exquisite architecture has fallen to ruins, but restorations are under way breathing new life into the charming and colourful old district. Newly-restored buildings stand shoulder to shoulder to centuries-old ruins, giving the area a surreal and very appealing atmosphere.

Some of Panama City's chicest cafés and restaurants are within the Casco Viejo, as is the presidential palace, the National Theater, several churches and cathedrals, and small plazas and parks adorned with statues of Panama's heroes. Many of the renovations are being converted to stylish lofts and studios, art galleries and shops, making this one of Panama City's most attractive neighborhoods and a popular tourist attraction.

Its latest starring role is as the setting for the newest Bond film, a Quantum of Solace. Panama attracted international attention last year as the film shot on location within the captivating quarters.

The Panamanian government is offering special incentives for the restoration of historical monuments and buildings with the Casco Viejo, including:

• 10-year income tax exemption on the sale or rental income of properties
• 30-year real estate tax exemption
• total exemption on the 2% transfer tax of real estate on the first sale of properties valued above $50,000
• preferential interest rates on loans
• total import tax exemption for equipment and materials related to construction and restoration that are not available in Panama

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