Arriving in Medellin has the opposite physical effects. Your heart slows a bit, your mind settles...
Unlike Panama City, Medellin's cityscape isn't all high-rise condo towers and features nary a single building of glass or steel. From any height (the windows of one of the city's luxury penthouse apartments for example, or the top of one of the surrounding hills), Medellin appears a sea of red clay tiles and red brick buildings interspersed regularly by patches of foliage and flowers. The effect, again, is calming and peaceful.
You can learn a lot about a place both from and by its taxi drivers. They're a top source of getting-to-know-a-city information and insights, of course, but they're also a barometer of the mood of a place. In Panama City, taxi drivers are in a hurry. They honk their horns constantly. They weave in and out of traffic, from lane to lane, pushing for constant progress. They can't abide sitting still or even slowing down and tend to run traffic lights and ignore things like "Stop" signs.
In Medellin, the taxi drivers, like their city, are gentler and calmer, happy to stop to offer directions or even to chat. In Medellin, you rarely hear the honking of a car horn, not by a taxi driver and not by anyone else either.
It's also worth noting that, in Medellin, taxis are not only ever-present, but also always painted yellow and metered, unlike in many of the places where we recommend you spend time. Again, orderly...genteel...
Medellin is impressively green, with trees, plants, and small gardens everywhere, and remarkably clean. In the central neighborhoods, you see no litter. The metro, a point of pride for the local population, is spotless and like new. At every station and in every train we boarded, I looked for but was unable to find even a cigarette butt or piece of gum on the ground.
Panama is working hard to clean up and green up its capital city. The long stretch of parkland along the bay known as the Cinta Costera has dramatically changed the face of Panama City for the better (and is being expanded). Still, while one might describe Medellin as genteel, a more appropriate adjective for Panama City might be gritty.
Walking around Medellin, especially outside the central tourist zone, Lief and I feel like an anomaly. This is one more thing that is very unlike in Panama City, where Americans have been part of the landscape for decades. In Medellin, by contrast, the people seem happy to discover us among them but, whenever we wander outside the central tourist zone, look at us in a way as to suggest they can't quite figure out how we could have gotten so off course as to end up there.
From a cost of living perspective, I'd put these two cities on par...depending on the relative strength of the Colombian peso. Right now, the U.S. dollar is at a high against the peso, meaning our dollars go further when we're in town. In Panama, where US$1 is US$1, this isn't an issue.
The most exciting thing about Medellin from a values point of view is the cost of real estate. The real estate market in Panama City has settled noticeably from its boom-time highs of three or four years ago. Today, you could buy in this market for US$1,700 to US$2,200 per square meter (down from US$2,000 to US$3,000 per square meter 36 months ago).
In Medellin? You can buy in El Poblado, considered the best address in the city, for as little as US$1,000 per square meter (resale). In less central, more local neighborhoods, you can buy for less.
The real estate market in Medellin reminds me of the market in Panama City when we first began paying attention to it about a dozen years ago.
We've reported in the past that Colombia (unlike Panama) offers no user-friendly foreign residency option. And we've been told by our Colombian attorney (who we trust) that we're wrong in this. Juan Dario assures us that there are at least three straightforward options for establishing permanent residency in this country. He'll be joining us for our Live & Invest in Colombia Conference in Medellin later this month to detail them in full for attendees.
Meantime, our Latin America Correspondent Lee Harrison is preparing a report on Colombia residency options that I'll share with you as soon as it's finalized.
Another practical matter that is not as straightforward in Colombia as it is in Panama is opening a bank account. It's not possible as a foreigner to open a local bank account in Colombia unless you have a personal introduction to the bank. If someone tells you otherwise, I think they're speaking optimistically and not from real world experience.
The alternative is to open an account with what's called a "fiduciary," the local equivalent of Charles Schwab. This is relatively straightforward, easier with a personal introduction, and a reasonable strategy for dealing with local bills. The downside is that transaction fees can be high.
The other downside to Medellin compared with Panama City is that few in Medellin speak English, whereas, in Panama City, it's very possible to get by speaking no Spanish.
In addition, Medellin (again, very unlike Panama) is not a tax haven, and taxes are high. Living here, your tax burden could increase, depending on your nationality, where you hold legal residency, and where your income comes from. The country even imposes a wealth tax (after five years of residency).
Colombia also imposes exchange controls. These are manageable if you plan and execute any investment in the country carefully and correctly. But they're not an issue at all in Panama.
Bottom line, here's how I'd break all this down...
Cost Of Living: It's a tie, more or less, depending on the relative strength of the Colombian peso...
Cost Of Real Estate: As much as 50% less expensive in Medellin...
Climate: Way more comfortable in Medellin...
Ease Of Residency: Panama is one of the easiest places in the world for a foreigner to establish full-time legal residency. There are a dozen options for how to do it, and the process is figured out and well documented. In Colombia, you also have options for establishing full-time legal residency, but I would maintain that they are not as straightforward, not as universally relevant, and not as turn-key. Again, Juan Dario says he'll prove me wrong in this position during this month's conference...
Ease Of Banking And Doing Business: Here, Panama wins hands down, with its international banking industry (the exchange-of-information treaty the country signed with the United States in 2010 notwithstanding); its lack of any exchange controls; the absence in this market of any currency exchange risk (as Panama uses the U.S. dollar as its currency); and its greater prevalence of English-language speakers...
Infrastructure And Accessibility: Another tie...
Taxes: Panama is the screaming champion on this score, a true tax haven, while Colombia qualifies as a high-tax jurisdiction, with, for example, a 33% corporate tax rate...
Health Care: Top notch on an international scale in both cities...
Ease Of Settling In: Panama City is a kind of halfway house for expats, a very easy and comfortable first step overseas. Medellin is the antithesis. Medellin is not an established retirement haven but an emerging one, meaning you're going to struggle more here to address the administrative challenges of establishing yourself...
Which place might be better for you?
I can't say. As I remind you often, it depends on your personal circumstances, your priorities, and your preferences. What is your current situation, and what kind of experience are you looking for?
I can tell you that we've decided not to try to choose but, instead, have been working these past 18 months to incorporate Medellin into our long-term retire-overseas plan.
As a new friend in Medellin, who also divides his time between that city and Panama City, put it recently: "Do business in Panama but live in Medellin. That's the ticket..." Lief and I would agree.
We won't be relocating from Panama anytime soon. We've based our business here for the long haul. However, as soon as the renovation of our new apartment in Medellin has been completed (hopefully within the next two to three weeks), we'll be visiting that city at least monthly.
And we're making plans for a satellite Live and Invest Overseas office in Medellin, to complement our base in Panama City, by year's end.
Kathleen Peddicord
P.S. Our conference team is busy this week finalizing the program and the activities (welcome reception, cocktail parties, city tour, etc.) for this month's Live & Invest in Colombia event. It's not too late to join us if you can. I promise you: Medellin will charm you. Come see for yourself. Details of the event we're planning are here.Continue Reading:
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On stage that evening last week in the 300-year-old Teatro Anita Villalaz in the center of Casco Viejo's Plaza de Francia was as eclectic a collection of small children as you might ever find. They come from Panama, but also from France, Spain, Italy, Germany, Portugal, Britain, Ireland, the United States, China, Japan...
Some have names I can't pronounce even after Jackson repeats them for me three or four times. Finally, embarrassed for me, he gives up and suggests that, if I have something to say to that particular child, he'd be happy to relay the message for me.
Some have lived in three or four other countries already, though they've only barely begun their little lives.
Most speak Spanish and French; others also speak English, Italian, and, in one case, Japanese. They manage to communicate among themselves cheerfully and with far less misunderstanding than you might expect.
Over the hour-and-a-half of the evening's spectacle, this small but worldly bunch performed Christmas songs in Spanish, French, and English, including some we recognized and many we didn't.
"Children in Palestine and children in Israel, children from the Americas and also from China, this day, let us think only of Christmas," began one song in French.
At Jackson's birthday party last month, I had a chance to speak with some of his classmates' moms. Some have husbands working with the UN and other international organizations who have posted in Panama for a year or two. Others are here for work related to various of this country's many infrastructure projects. They and their children have migrated to Panama from Mexico City or Caracas, Buenos Aires or Santiago, Paris or Madrid...
Lief and I worry sometimes about the life Jackson is living. Born in Ireland, he's since lived (and gone to school) in Paris...and now Panama City. He's an American by birth, but Irish, too, with the second passport to prove it, yet he's neither American nor Irish.
Jackson is a little guy without a country but embracing the world. And, at the French school in Panama City, he's found 199 other little guys and girls just like him who, one evening last week in a centuries-old French-colonial theater, filled the tropical night with song.
Kathleen Peddicord
P.S. What else this week?
- "Every morning in Cuenca, Ecuador" writes Latin America Correspondent Lee Harrison, "the sunrise backlights the jagged Andean peaks and church steeples, casting its glow over the sea of clay-tile roofs.
"But on the morning of Christmas Eve in Cuenca, it also lights up an impressive scene that comes but once a year.
"On this day, thousands of Ecuadorians come to Cuenca from all over the country to celebrate a procession known as El Pase del Niño Viajero, loosely, 'the passage of the child.'
"It's a custom that started in the 1960s, when a statue of the Christ Child, called El Niño Viajero, was blessed by the Pope and then brought to Cuenca from Rome. The event is a core tradition in Cuenca today.
"The extravagant, ad-hoc parade extends for miles and can include more than 35,000 people, local residents and visitors, who walk along with the participants.
"The Pase del Niño is not centrally organized but consists of hundreds of small family delegations who come from cities, towns, and villages across the country..."
- "For those of us who grew up in snow country, it seems odd to be walking around in T-shirts and flip flops on Christmas Day," writes Belize Correspondent Ann Kuffner.
"But, having lived here on Ambergris Caye for five years now, I've come to appreciate that Belize offers a unique collection of blended Christmas traditions. Home to more than 10 different ethnic groups, this country boasts the most multicultural holiday celebrations I can imagine..."
- Day by day, in these dispatches, I introduce you to your best options worldwide for living better and retiring well, hoping to help you make a choice.
But what happens when you do? Decide to retire to Las Tablas, Panama...Mendoza, Argentina...Languedoc, France...County Kerry, Ireland...or Penang, Malaysia...and then what?
The truth? In some ways, having done the hard work of determining where you'd like to launch your new life, the real work has only just begun. Because the getting-settled administration wherever you decide to build your new life overseas won't be insignificant...and it won't come without challenges and frustrations...
- "The Costa Rica legislature," writes Offshore Investing expert Lief Simon, "is trying to fast-track new tax legislation...and the opposition has filed a suit with the Supreme Court to stop the fast-tracking. Not the legislation itself, just the fast-tracking.
"Politics aside, the proposed tax changes show that a government (any government) can shift policies at a moment's notice. Among the more disturbing changes in the proposed law include allowances for taxing residents on worldwide income and for taxing income in the free trade zones (whose names, I guess, would need to be changed).
"The breadth and depth of these proposed new taxes is easily explained. Costa Rica, like so many countries right now, is broke. They have too much government and welfare and too little income. So they are looking for ways to increase their revenues. These proposed new taxes are not the answer, and, likely, the only result if they are passed is that productive residents and businesses will move themselves and their assets out of Costa Rica to somewhere more tax-friendly.
"An expat friend six years resident in Costa Rica says he does not believe the proposed tax on residents' worldwide income or the proposed tax on revenue generated in the "free trade" zones will pass...as they'd be suicide for the current administration. If Costa Rica does start taxing residents on worldwide income, my friend will be among the first on the next plane out of the country..."
Also This Week...from Resident Global Real Estate Investing Expert Lief Simon:
A couple of friends have taken possession of new-construction apartments recently, both in Panama.
Actually, they haven't taken possession quite yet. The developer in each case has informed them that the apartment in each case is ready to be turned over, meaning it's time for the buyer to close.
But both these friends have been around enough to know not to take a developer at his word.
One came to Panama City a few weeks ago to do a walk-through of his apartment in Trump Tower and to make a punch list in advance of taking possession of the unit. The developer told him that they were "so busy with closings" they couldn't allow him to go see his apartment unless he was ready to close. The elevators, they explained, were "reserved" for closings only.
He told them he'd see them later. "I'll be back when I can do a proper inspection...and then we'll talk about scheduling the closing," he explained as he booked his return flight to the States.
Common sense, right? You want to see what you're getting before you pay for it. But you'd be surprised how many people buying property overseas don't bother with a walkthrough or a punch list before closing. If you're making a purchase long-distance, a walkthrough before closing means another trip to the country. Maybe you don't really have time. Maybe you don't feel like it. But, take my word for it. Not making time for a final in-person inspection could turn out to be a big and costly mistake.
Pre-construction purchase contracts in Panama, for example, generally call for a final payment when the developer obtains his occupancy permit. The trouble is that a developer can get an occupancy permit before the units in his building are actually habitable. One new 25-story building I looked at when we were shopping for office space to rent had its occupancy permit, but the elevators weren't completely installed.
When my apartment in Bayfront tower was built, the developer contacted me when he got his occupancy permit and told me it was time to close. I scheduled a visit for a walkthrough...and found that the bathroom floors weren't in place and that other tile work was unfinished. My punch list was long. It took them a few months to complete all the items on it. I didn't close until they did.
The key is the contract. Most contracts for a pre-construction purchase include a penalty clause if the buyer doesn't close on time. "On time" is usually some number of days after you've received notice from the developer that he has his occupancy permit. This is the important point. If your contract is written so that the occupancy permit is the trigger for the final payment, you've potentially got a problem. Rather, you want the contract written so that you can hold back some amount until the property is actually completed--that is, ready to move into.
Earlier this year, another friend found himself in a situation where the developer had obtained his occupancy permit and was pushing for the closing even though, my friend discovered, neither the apartment nor the building was ready to be lived in. My friend is a developer himself so he knew not to allow himself to be bullied by the strong-arming tactics of the builder. He turned the tables on the guy, telling the developer he was going to hold back from the closing some percentage for every month of further delay until his apartment and the building were both in fact ready to be occupied.
You can't always count on being able to pull off something like this, though, so it's important to protect yourself up front by making payments contingent on verifiable thresholds. And the only way to verify the thresholds have been met is to go to see the place yourself...or to send someone you trust to inspect for you.
Because you aren't going to get the developer to do much for you once you've paid...and once his crews have left the site.
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Panama Editor Chris Powers features one of the country's most affordable locations in this month's issue of my Panama Letter: Rio Hato.
Rio Hato is both a region and a town. The region includes one of the most expensive lifestyle options in all Panama, Buenaventura. This private, gated community on the ocean is five-star by anyone's standards. The property includes the Bristol Buenaventura Hotel (my favorite in Panama), a private clubhouse, and clusters of red tile-roofed "villas" separated by gardens, walkways, tennis courts, water features, and swimming pools. You'd look hard to find a nicer private ocean-side residential community anywhere in the world.
Buenaventura's existence in Rio Hato highlights the contrasts and contradictions you find all over this country. It is arguably the nicest place to live in all Panama. It's also the most expensive. Yet it sits just down the road from little, unassuming Rio Hato town...one of Panama's most back-to-basics and affordable lifestyle options.
Chris' budget for Rio Hato, detailed in this month's issue of the Panama Letter (in subscribers' e-mailboxes later this week), totals US$1,320 including US$200 for full-time household help and US$120 a month for travel (meant to cover the costs of regular trips to Panama City or Santiago). Not everybody needs (or wants) full-time household help, and you wouldn't have to travel to Panama City every month if you didn't want to...meaning that, in fact, a couple could retire to this friendly, safe, welcoming, and charming area on a monthly budget of less than US$1,100.
One reason the cost of living in Rio Hato town is so affordable is that the cost of renting here is a steal. Chris reports you could rent a small but comfortable house for as little as US$250 per month.
Rio Hato town is not on the water, but the coast isn't far away. In other words, for a total cost of US$1,000 to US$1,200 per month, you could enjoy a relaxed retirement in a community where you'd be welcomed, where you could easily make friends (you'd need to speak some Spanish), and where you'd be but minutes from the Pacific Ocean.
Many locals live off the land. Fishing, farming, and shrimping are the big industries here, and opportunities exist for agricultural entrepreneurs.
Chris has the details in his complete report, in the final stages of production now.
Kathleen PeddicordContinue Reading:
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We saw power lines and water pipes, but some of the shacks we passed over had no doors, windows, or floors. Women were laying laundry to dry on their tin roofs. Children were running barefoot up and down the dirt trails between houses. Men carried bundles of firewood on their backs.
Just the picture of Colombia that I guess many people harbor. I'm not going to try to suggest that this barrio we passed over last week is a place you'd want to live, but I will say that it didn't strike me as dangerous. Just families going about their day-to-day business, some waving up to the cable cars as we passed overhead.
Later in the week, we found ourselves in another very "authentic" environment, as a friend described it. Lief, Jackson, two friends, and I stood on a corner in a neighborhood just outside central Medellin. This was, we were told, nearby Pablo Escobar's old stomping ground, the place where he hid out when the heat was on. We hadn't sought it out as part of a sightseeing tour. Rather, we'd been delivered here on the recommendation of a taxi driver who told us it'd be a good place to try to negotiate for a van and a driver to take our party for a day-trip to El Retiro.
Again, this was the kind of neighborhood people probably expect to find in Colombia...and that many probably fear. The sunny Saturday morning that we passed through, we found nothing to be concerned about. Everyone we met went out of his way to accommodate us. In the end, we managed to source a van and a driver at a very reasonable fee.
After the daylong excursion to the colonial town of El Retiro, we returned to our hotel in the center of the city. This five-star, international-standard hotel could be in any big city anywhere in the world, including London or New York. It has a big pool, a five-star poolside restaurant, a bar in the lobby where the white-gloved waiters are attentive, a salon, a spa, and the most gracious, welcoming, helpful staff you could hope for anywhere. Our suite cost about US$150 a night. Standard rooms can be had for as little as US$80 a night, depending on the season.
Most nights last week, we dined out with friends, again, in restaurants where the food, the wine, and the wait staff are as good as you'll find anywhere. Dining out in Medellin can be expensive (US$30 to US$50 per person)...or not, depending what you're looking for. My point is that you can find the best this world has to offer if that's what you want and what your budget can accommodate. Or you can eat hearty (and local) for just a few dollars (five of us had lunch one day for a total of US$20). Both options can be appealing and fun.
Back in Panama City this week, we continue to be struck by the contrasts of life in this part of the world. Friends from Paris are in town this week, and we're taking their visit as an opportunity to do some sight-seeing. Yesterday, Lief and I drove our friends to Portobelo on the Caribbean coast. Much of what was built in this part of Panama about 500 years ago (the massive customs house and the fortifications) remains standing and impressive. What was built more recently? Much less impressive. The town of Portobelo today is a barrio, maybe not so unlike the one we passed over in our cable car last week in Medellin. Small wooden shacks with tin roofs...garbage in the streets...
After our day out in Portobelo (which, despite its down-at-the heels appearance, I heartily recommend you visit if ever you have the chance, as both the history and the natural beauty of Portobelo's bay are worth investigating firsthand), we returned to Panama City. Driving through town, our friend Vincent made the obvious observation:
"What a place of contrasts this is," he said. "You have these big modern high-rise towers and brand-new hotels...yet just outside them the sidewalks are cracked and just next-door are very modest little shops."
Medellin, Colombia, and Panama City, Panama, and dozens and dozens of other places we report on from this Latin America region are cities in transition and, therefore, studies in contrasts. We had a similar experience living in Ireland years ago, when the Celtic Tiger boom was building and that country was very much a nation in transition.
This appeals to us. Contrast and change, transition and transformation. We're most engaged by places in the process of remaking themselves.
For these are places of potential...lands of opportunity.
Kathleen PeddicordContinue Reading:
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It could have been Halloween night in any neighborhood in any suburb outside any city in America. Only we weren't in the United States. We were celebrating Halloween in Costa del Este, the planned community on the peninsula that sits 10 minutes east of Panama City. The organized trick-or-treat night was for Costa del Este residents only, but a friend had invited Jackson to join in and got his name on the list so that the security guard at the front gate would let us through.
Following the group of trick-or-treaters up and down the tree-lined streets last night, I had to remind myself where we were, and I was struck more than ever before not only by how very American life in this part of the world can be, but also by how very different are the lifestyle options Panama has to offer.
I remind you often that the key to finding the right place to launch your new life overseas is knowing what you want. The question isn't, is XYZ country for you as much as it is, where in XYZ country might you find the lifestyle you seek?
The most important follow-up question you should put to yourself as you pursue this line of thinking is, how local do you want to go? If the answer is, not at all, then a neighborhood like Costa del Este could be your ideal new overseas address. Last night, we met other Americans, in Panama for business, like us, but even the Panamanians we met spoke perfect English. Their kids, too. We talked about travel plans for the upcoming holidays...the best place in Panama City to shop for a turkey for Thanksgiving dinner...where to find the freshest live Christmas trees...how our kids' sports teams are faring so far this season...all the same things moms back in the United States are also discussing this time of year.
Jackson came home with a sack full of candy, and we all enjoyed the evening tremendously. After we'd tucked Jack in for the night, though, Lief turned to me and said, "That was fun, but, just so you know, I could never live there."
I laughed because I understood. While we'd all had a great time with our friends, and while, I have to admit, I appreciated its clean, wide, 100% pot hole-free streets, new sidewalks, and trimmed grass and tidy gardens, Costa del Este isn't for me either.
Years ago, when we were considering schooling options for Kaitlin in Paris, I had a similar experience. One morning, Kaitlin and I toured the American School. It was big, bright, and shiny, with computer labs, locker rooms, playing fields, and gymnasiums, all exactly the same as you'd find in any American high school in any U.S. city. Everyone we passed in the hallways was speaking English, all classwork was in English too (save twice-weekly French lessons), and most of the faculty had been imported from the States.
I'm sure kids at the American School in Paris get a fine education, but, after our tour of the campus, settled in a taxi for the ride back to central Paris, Kaitlin looked at me and said, "Just so you know, I could never go to school there."
Lucky for me, Kaitlin had the same reaction to the American School of Paris that I'd had and that Lief and I had to Costa del Este last night. Great option for many...but not for us.
In every place where we've lived these past 14 years since we left the States, in Waterford, Paris, and now Panama City, we've gone very local when it's come to things like where to base ourselves and where to send our children to school. Why move the family to Paris, we figured, and put the kids in a school (the American School, for example) where they might graduate without learning to speak French?
But that's us. My point is not that you should go local, as we have. There's no should about it, no right or wrong way to do this.
My point is that you should approach this move, whatever form you intend it to take, as a chance to seize the life you've always wanted. What do you want to see from your bedroom window every morning? And who would you like to have for your neighbors?
Start there.
Kathleen PeddicordContinue Reading:
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