Panama could arguably be called the world’s best offshore haven. There is no doubt that Panama has serious pluses for those looking for a country with a cheaper standard of living than the United States and Europe. Panama is blessed with beautiful islands, ample coastline beaches, mountain retreats, and colonial towns.
Panama offers a multitude of visa options to suit anyone’s needs (including the “Specific Countries” visa that grants work permits) and international-standard health care. Called the “Hub of the Americas,” this country is ideally located for travel to the United States and Canada. The flight from Miami, for example, is direct and takes about two-and-a-half hours. Plus, Panama makes a great base location from which you can easily explore the rest of Latin America and the Caribbean.
The people here are friendly, and, outside of Panama City, the atmosphere is generally quite laid back and easy going. With a population of only 4 million, the country does not feel overly crowded.
The country’s strategic geographic position, and the significance of the Panama Canal, mean this destination is an important point on the world map. Panama’s economy has always been strong; it’s never slowed or ceased to grow due to the canal and the massive amounts of wealth that move through it (and earn Panama revenue).
Largely as a result of its crossroads positioning, but also thanks to its reputation worldwide as a top retirement, offshore, and banking haven Panama is one of the fastest-growing countries in the world, and the fastest-growing market in the region.
Cost of Living in Panama
Live and Invest Overseas offers monthly cost of living budgets for our favorite destinations in Panama:
Infrastructure In Panama
Panama’s infrastructure is unevenly distributed throughout the country, with capital Panama City receiving the lion’s share and the rest of the country receiving little.
The infrastructure in Panama City and surrounding region is of a high standard. This is a place where things generally work—the Internet, cable TV, phone service, etc., are nearly as reliable as you’d like them to be. But that’s not to say things work just like they do back home. Internet bandwidth availability is lower here. Occasionally, there’s an electricity outage or the neighborhood water gets turned off and you have to suffer through a few hours without. The city also struggles with litter and garbage-pickup problems. These hiccups aside, life in Panama City and its suburbs is comfortable and services provided as they should be.
Panama City boasts Central America’s first metro system. Currently, it only has one line that runs the length of Panama City, but line two is already under construction, and line three has been planned and approved.
The infrastructure in the interior of the country, though, is another story. Outside of Panama City (or large towns in the interior like Boquete, Coronado, Pedasí, or Santiago), infrastructure of all types is poor. Due to a lack of towers, cell reception comes and goes depending on your region, as does Internet availability and quality.
In Panama City, quality of roads varies quite a bit street to street, but they are constantly improved and regularly maintained. Panama has two main highways: Norte (north) and Sur (south). These toll roads run the length of the country and from Panama City to the Caribbean coast, stopping at Colón, and are kept in good condition.
Although the roadways and highway systems are being constantly expanded and improved, traffic in Panama City can be terrible. With a rapidly climbing number of cars on the roads, the government is finding it difficult to keep up. The metro has done a lot to improve the state of traffic in Panama City, as has an increase in traffic police in 2014 and 2015, but this is still a major problem that affects quality of life in Panama City.
In the interior of the country, roads off the highways are generally not maintained and many are unpaved. Some paved roads are in such poor condition that a dirt road would be an improvement at this point.
Panama’s main international airport is near Panama City. While there are others, this is the one the majority of traffic comes through.
Climate In Panama
Panama has a tropical maritime climate with a rainy and dry season and little temperature fluctuation from season to season. Importantly, Panama sits beyond the hurricane zone and is at no risk of being hit by tropical storms.
The temperature in all areas of Panama typically hovers around 80°F throughout the year. Average annual humidity is around 80%. Mountainous regions and any area above sea level may experience cooler temperatures and lower humidity. Panama receives the most annual rainfall during rainy season, most regions receive about 70 inches of rain per year.
Panama City can be too hot and sticky for some tastes, but look beyond the capital, and you find pockets of near-perfect climates in some regions. If you prefer fresh mountain temperatures to steamy sea-level ones, consider El Valle, Boquete, or Santa Fé.
As in any country, weather depends on your region, but generally Panama enjoys a warm, tropical climate.
Panamanian Rainy Season: May to November
Panamanian Dry Season: December to April
Residency In Panama
U.S. citizens may enter Panama without a visa and remain in the country as a tourist for a maximum of 90 days per trip. If you wish to stay longer than 90 days, you need to seek permission to remain in the country. Tourists must present a return trip ticket or fare back to their home country or next destination upon arrival. Airlines strictly enforce these laws (as they would incur any cost of deportation should they allow you in the country and you remain illegally).
Panama offers the most cost-effective, hassle-free invest-for-residency program available anywhere in the world today. With an investment of US$300,000 in real estate, CDs, or any combination thereof, $US160,000 in a business, or US$80,000 in reforestation, Panama will grant you residency.
The Specific Countries visa program was initiated under Ricardo Martinelli’s presidential administration through an executive order that the current president of Panama, Juan Carlos Varela, has so far allowed to remain in place. It is available to citizens of 48 specifically named countries, including the United States. If you hold a passport for one of the 48 countries on the list, this is the best Panamanian residency option after Panama’s pensionado visa.
Panama’s pensionado program of special benefits and discounts for foreign retirees is the current Gold Standard. Retired in this country, you can save as much as 50% on everything from restaurant meals to in-country airfares, from prescription medicines to closing costs on your new beach house.
Residency in Panama can lead to naturalization in this country, but dual citizenship is not permitted by those who apply for legal citizenship. (As opposed to citizenship by birth; children born in Panama are allowed to retain both citizenships).
Health Care In Panama
Health care in Panama is of an international standard and medical tourism is a booming industry here. Panama City is home to Punta Pacifica Hospital, the only hospital in Latin America affiliated with and managed by Johns Hopkins Medicine International. There are other good hospitals in the city, we also recommend Punta Paitilla Hospital, which is generally less expensive than Punta Pacifica.
The cost of medical care in Panama is a bargain. Like everything, medical costs are higher in Panama City than elsewhere in the country, but, even in the capital, a doctor’s visit costs US$50 or less. In Panama City, clinics are a great value (US$30 per consultation) and offer excellent, full-service care.
In the interior of the country, medical care is not as reliable or easily available. Large towns like Boquete, Coronado, and Pedasí would have clinics that could provide adequate care for day-to-day ailments, but for anything major, you’d need to go to Panama City.
Real Estate In Panama
Panama’s property market was one of the few in the world that did not crumble in the wake of the 2008 meltdown, and neither did its economy. Panama Canal revenues have surged these past several years, continuing to keep this country cash comfortable. In addition, Panama is enjoying growth in both its financial services and tourism sectors and has established itself as a top tourist shopping destination.
But if you come to Panama to purchase real estate leave all your ideas of how to buy behind and just bring your wits with you. Remember, this is a different world, with a different legal system and one that is sometimes fraught with fraud and con men. The worst of the con men speak excellent English and will help you purchase things at great prices… that do not even exist. Do not expect the legal system in Panama to help you; once your money is gone it is gone. That said there is a right way to do things so that you can avoid the pitfalls.
Start by investigating the whole area you are interested in. Speak to real estate people—all of them. Panama has no multiple listing service (MLS) and everyone and their sister sells real estate, but most people are not licensed. If they are not licensed then there is no accountability if things go wrong. Panama also allows net listings, which means prices may vary on the same property from office to office.
If you find a property be sure to refer to this simplified check list:
- Is the property on titled or ROP land?
ROP or Right of Possession is where a person or family has effectively homesteaded land in Panama. They have a right to possess it, and they can legally transfer that right, but the owner is the government. The issue is who has that right and who else in that family, or even a neighbor, is going to also claim the same right. If you buy the property can you obtain title? It is a risky business proposition. The government has a program to title ROP land, they want it all titled because titled land pays taxes, ROP land does not.
Titled land is registered at the Registrario Publico, the public registry of Panama. All legal liens against titled property are also in this database. Before you do anything regarding property you should find an attorney, not the same attorney as the seller, and have them research the property. If you are fluent in Spanish you can do this part yourself.
All titled land is taxed in Panama, except for land under condominiums, there’s no exemption. To help keep land values below the taxable threshold many sellers transfer the property into a corporation and then sell the corporation. The value of the corporation might increase but the land value does not.
- How is the property owned, by a person or as a corporation?
Many parcels of titled land are corporate property. People sell the corporation not the land. This device avoids revaluation of the property to market value.
- Is title clear or are there liens?
There are people who have gone through the entire process of acquisition only to discover a lien was on file. Any legal lien must be recorded in the Registrario Publico, another good reason for having complete research done by a lawyer.
- Is the person claiming to own the property really the owner?
This one seems obvious but once again it’s not uncommon to hear of people who have bought property here based upon the word of another expat; big mistake. Do not purchase anything before your lawyer carries out an investigation of title.
Untitled land must be owned by a Panamanian for at least two years before it can be owned by a foreigner. After this period it can be titled and resold. Foreigners cannot own within 10 kilometers of international borders. All Panamanian beaches and waters are public land and cannot be bought or sold. Foreigners cannot own within 10 meters of the Atlantic Ocean or within 22 meters of the Pacific Ocean (from the high-tide line). Special permits are needed in cases of some types of waterfront construction. Rights of possession is common in some parts of Panama. While this is not the same as title, it can be converted to title in some cases. To do this, you need the help of an attorney familiar with the process.