Live, Do Business, And Invest In Panama

Live, Retire, Do Business, And Invest In Panama

Oct. 24, 2010, Casco Viejo, Panama: Casco Viejo’s La Plaza Francia is perhaps the most atmospheric spot in this most historic corner of Panama City.

SPECIAL THIS WEEK: Mariachis, Moonlight, And Mingling—Live From The Scene Throughout Our Live & Invest In Panama Conference!

Dear Overseas Opportunity Letter Reader,

Three-and-a-half centuries ago, Spanish conquistadors in Panama threw their prisoners into dungeons that were part of the sea wall of the Spanish fort in Casco Viejo. It is said that, at high tide, the prisoners often drowned.

We didn't let this rather grim history get in the way of our enjoying the venue we'd chosen for the final evening of this week's Live & Invest in Panama Conference. Our 150 conference-goers wandered from the vaulted stone rooms of the former jailhouse-turned-restaurant out onto the Plaza Francia that now fronts it. Next-door today is the National Institute of Culture (where our son's school puts on its annual Christmas pageant), and across the square is the French Embassy.

All around are swaying palm trees and, beyond them, last night, the Bay of Panama twinkling in the light of a full moon.

After two-and-a-half days in the meeting rooms of the Four Points Sheraton Hotel, our group ventured outside to soak up the charm of a typical tropical evening in Panama. I half-expected to see Graham Greene or Ernest Hemingway, both of whom spent time in this historic corner of Panama City, cross the square in front of us at any moment...

The members of our conference group are off now to see more of Panama for themselves. Some are traveling to the Azuero Sunset Coast to visit Los Islotes...some are driving, others flying inland to Boquete...others are staying on a few more days in Panama City to meet with banker, attorney, real estate, and other contacts they made at this week's conference, to open bank accounts, to set up corporations, to shop for condos to rent or buy...

Meantime, our Live and Invest Overseas staff, following a whirlwind week, is enjoying a well-deserved day of rest. I'm off now to join them.

More tomorrow...

Kathleen Peddicord

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-- "Welcome to Panama!" I greeted the 150 attendees assembled in the meeting room of the Four Points Sheraton Hotel here in Panama City this week.

We kicked off this week's Live & Invest in Panama Conference with a big-picture tour of the top options this diverse country has to offer. Generally speaking, I explained to the group, in this country, you have three lifestyle choices to consider--city, beach, and mountain.

Then I helped our group to thin-slice these big-picture options, as follows...

-- Before you can begin to consider where best you might relocate overseas, you've got to get to know yourself better. What's important to you? What things would you miss from your current life if they weren't part of your new one?

What services, amenities, niceties, and distractions could you not live without? What hassles, hurdles, frustrations, and difficulties would you find intolerable?. Here's a How To Retire Overseas Personal Survey to jump-start your thinking and your planning...

-- "Of all the places that I've traveled in Asia," writes Correspondent from that part of the world Wendy Justice, "Vietnam is perhaps the most exciting, vibrant, and intense. It can feel quite foreign and exotic.

"The northernmost Vietnamese coast is spectacular. Known as Halong Bay, it covers 600 square miles, with thousands of jagged, limestone karsts rising like castles out of the ocean. There are dozens of caves, deserted beaches of fine, white sand, and almost 2,000 islets extending far into the Gulf of Tonkin...

-- "Vicki and I returned to Argentina last month after a six-month absence," writes Intrepid Correspondent Paul Terhorst. " We're installed in our home and enjoying the spring here.

"My impressions so far: The Argentine economy continues the boom, the dollar cost of living is doubling every three years in this country, and street crime has become a bigger problem..."

Also This Week...from resident global real estate investing expert Lief Simon:

One question that's been raised by many attending our Live & Invest in Panama Conference this week has to do with local mortgages.

Can a foreigner get one here?

Yes. Panama is one country where a foreigner can get a mortgage for the purchase of real estate even as a non-resident.

The question you have to ask is whether or not you want one. Is a Panama mortgage worth the cost and effort?

Lending terms in Panama aren't the same as you're likely used to. You won't get a 30-year, fixed-rate mortgage, for example. The longest term you're likely to find is 25 years, and the interest rate will vary in some way.

The longest fixed term you'll find is five years.

That said, a variable rate doesn't necessary vary. There are no guarantees, and you certainly can't predict whether or in which direction your rate might adjust, but I can tell you that, while the interest rate for our mortgage in Panama is variable, it hasn't changed once in the three-and-a-half years we've had the loan.

In addition, mortgages in Panama come with a small catch. As part of the lending process, you'll be required to get a local life insurance policy that would pay off the loan if something happens to you. The life insurance is an extra expense. But the real issue is the potential limit on the term of the loan you'll be eligible for, as you can get a mortgage only for as many years as you can get a life insurance policy.

This isn't unique to Panama. Mortgage life insurance is a typical requirement in most countries, but the limitation created by the ability to get life insurance can catch older buyers from North America off-guard.

In Panama, the typical life insurance company will cover you only until age 75. Therefore, you can get a mortgage only to age 75. So a 65-year-old buyer would be able to arrange no longer than a 10-year term from a bank.

I was told a few years ago about someone who was able to get a life insurance company to cover him in Panama until age 80, meaning this buyer got an added five years on his mortgage term. In general, though, life insurance companies will cover you only until age 70 or 75.

Another factor in Panama that can limit the amount of the mortgage a bank will give you is the limit that many banks now set on the per-square-meter value they will lend on.

For example, if you're buying a house or an apartment in Panama City, Global Bank will limit your loan to no more than US$1,300 per square meter. That is the amount on which they will base their 80% loan-to-value calculation.

If you want to buy a house for US$1,400 a meter, the best you'll be able to manage is a loan of US$1,040 per meter (80% of US$1,300). You'll have to put down US$360 per meter, or almost 26% of the purchase price to secure your "80%" loan.

The good news is that you can apply for pre-approval from a Panama bank before you start making property offers. This way, you'll know for sure what you can afford to spend.

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