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Live in Panama City





Arriving in Panama City, you recognize instantly that this town is open for business, pushing for growth, and both embracing and chasing prosperity. Your heart rate quickens, and your mind works quicker, too, trying to keep up with the commotion all around.

Arriving in Medellin has the opposite physical effects. Your heart slows a bit, your mind settles.

Live in Medellin





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, 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. They also tend to be unhelpful, even rude. A Panamanian friend describes them as "among the least appealing people on earth." I can think of a handful of exceptions (including our own retired taxi driver, Alberto), but, in general, I'd agree with my friend's assessment.

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've ever ridden, I've looked for but have been 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, an 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 less and less true, as Medellin becomes more discovered by expats and retirees. However, in Panama City, Americans are everywhere. We have been part of the landscape in this city for nearly a hundred years.

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 right around the middle of the range it's traded in versus the peso since we began paying attention a few years ago. We watch this, looking for opportunities to exchange dollars into pesos to cover carrying costs for our apartment in Medellin. In Panama, where US$1 is US$1, this isn't an issue. The American in Panama has no exchange-rate risk to worry about. If you intend to retire on an income fixed in dollars, this can be an important plus.

The most exciting thing about Medellin from a value 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 five or six years ago. Today, you can buy in this market for US$1,500 to US$2,200 per square meter (down from the US$2,000 to US$3,000 per square meter of the golden age of last decade).

In Medellin? You can buy in El Poblado, considered the best address in the city, for as little as US$1,200 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.

Panama is one of the world's most welcoming countries when it comes to establishing residency. In Panama, the would-be expat, retiree, or entrepreneur has more than a dozen options for how to establish full-time residency, including the new "Friends of Panama" visa option, which amounts not only to the most user-friendly, turn-key residency option in the world today but also the most user-friendly, turn-key residency option in the history of residency options. Plus, it can lead to a work permit, which is a big deal.

Colombia, too, though, offers good foreign residency options, including one for pensioners and another for investors. The minimum investment requirement in each case can be less than for comparable options in Panama.

One 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, 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. Unlike opening a bank account, this is relatively straightforward 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 in Medellin, 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). Note, though, that moving to Colombia with only retirement income should be a tax-neutral event. Colombia, like most countries, doesn't tax foreign retirement income.

Unlike Panama, Colombia imposes exchange controls. These are manageable if you plan and execute any investment in the country carefully and correctly. But, again, they're not an issue at all living in Panama.

Bottom line, here's how I'd break all this down...

Living in Panama City Versus Living in Medellin:

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...

Quality Of Life: This is completely subjective and impossible to pin down. Nevertheless, I'll go out on a limb and say that the overall quality of life is much more appealing in Medellin than in Panama City...

Ease Of Residency: Panama is one of the easiest places in the world for a foreigner to establish full-time legal residency, especially if he comes from one of the countries included in the new "Friends of Panama" visa program. However, Colombia is also a very straightforward option in this regard. Certainly, I wouldn't take Colombia off my list for fear of a complicated struggle related to becoming a resident...

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. Again, though, if you're a retiree making a move with retirement income, you probably don't have to care about this...

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 more an emerging expat destination, though it is more discovered and therefore easier to navigate as an expat or foreign retiree all the time...

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 worked over the past few years to incorporate Medellin into our long-term retire-overseas plan.

As a new friend in Medellin, another expat 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, we have made a commitment to Medellin, too, with the purchase, two years ago, of an apartment intended to be another home base for us and where we hope to be able to spend time regularly starting later this year.

We're even making plans for a satellite Live and Invest Overseas office in Medellin, to complement our base in Panama City. Stay tuned.

Kathleen PeddicordContinue Reading:

  • What Is A Cedula?

Image sources: Medllin - Antioquia and Hollic


The "penthouse life" you might call it, complete with waterfront two-story penthouses in buildings with saunas, spas, massage rooms, squash courts, and 24-hour concierge doormen and supported by five-star restaurants, trendy bars, and international-brand shopping (Tiffany, Hermes, Cartier, Rolex, etc.) nearby.

We spent four days in Manhattan over Christmas, indulging in that kind of life. We ate at steak houses with white-glove service, stopped for champagne cocktails, shopped Fifth Avenue, and ate US$20 hamburgers for lunch (once). By the end of the four days, Lief and I both were eager to move on. Who could afford to live like that indefinitely? Not us.

At least not us in Manhattan. However, here in Panama, we're realizing, not only is that standard of living available, but it comes at a price that many more of us can absorb.

Specifically, this kind of living is on offer on a little peninsula in the heart of Panama City called Punta Pacifica. On this spit of land, the highest-end of any high-rise towers in this city of high-rise towers have been built, including the infamous Trump Tower. In addition to ultra-modern, ultra-amenity buildings, this area has been developed to include real sidewalks (uncommon in this city), grassy medians (non-existent elsewhere in this city), park areas, and lots of trees and shrubs. As the final few of the towers to be erected here (it's a small area, so only so many buildings are possible) are nearing completion, it's also one of the least congested and quietest spots in the city. Everywhere in Panama City is under construction or renovation in some way, including in Punta Pacifica, but, again, the work in this small region is nearing an end, making it unique and accordingly appealing.

As it's a peninsula, all of the buildings have front-line water views from at least one side. All of the buildings also have all of the amenities you could ever hope for and compete with each other on this score. As I mentioned, these buildings compare with what you can find in center-city London and downtown Dubai.

Just a few minutes away is Panama City's high-end shopping mall, MultiPlaza, which has just expanded to add dozens of new internationally recognized retailers. There's the paneled wine bar in Trump Tower for evening respites and all over Panama City you'll find truly five-star restaurants, where the food, the ambiance, and the service can be compared favorably with what we recently enjoyed in New York.

All of this comes at a cost, of course. Punta Pacifica is the most expensive living option in all Panama. Per-square-meter sales prices average US$2,000 right now (except in Trump Tower, where agents are trying to get US$2,500 per meter and more...don't pay it). Penthouses rent for US$4,000, US$6,000, and more a month. Monthly condo fees can add another US$500 to US$1,000 monthly. A couple of drinks in the Trump Tower bar will set you back US$20.

However, comparable digs in comparable buildings with water views in Manhattan or London? They'd cost you multiples of what you'll spend in Punta Pacifica. This is one of the few legitimate examples worldwide of being able to buy what qualifies as true luxury-level living for a fraction what you'd spend for the same level of living in one of the world's recognized brand-name cities. If luxury is what you want but you can't afford it in the places where jet-setters and rock stars typically seek it out, this would be a very good option to consider.

Our new Panama Letter Co-editors, Denis Foynes and David Sexton, introduce subscribers to this small and unique section of Panama City in this month's issue. Even if you're not in the market for the luxury life, I think you'll appreciate what it means about Panama City's future prospects to be able to report that this lifestyle is among the many available here at a very competitive price.

Their report is being finalized and should be in subscribers' e-mailboxes shortly.

Kathleen PeddicordContinue Reading:


Where in the city should we locate ourselves?

We knew Panama City well enough to understand that, while it may be small, Panama's capital is eclectic. Different neighborhoods offer very different ways of life.

I wanted Casco Viejo, the old quarter, where, centuries ago, the Spanish and then the French hung their hats when they were in town. I like old buildings the way some women like new shoes, and the Casco, as it's known today, boasts one of the world's finest collections of Spanish- and French-colonial structures, plus shaded plazas and parks and ocean views in every direction. It's one of the few areas of this city made for walking. In most of the rest of Panama City, you have no choice but to brave the chaotic traffic. In Casco Viejo, you can wander from plaza to plaza, from café to café, at your own pace, as you might in a European city. That appeals to me.

Lief, on the other hand, wanted to be based in the center of new Panama City, in or near the banking district, where the infrastructure we knew we'd need to launch our new business would be most easily tapped into.

Living in the heart of the new Panama City, though, meant living in a high-rise apartment tower. The thought of that appealed to me not at all.

In the end, I acquiesced. Lief was right, at least for the short term. Better to be based where the infrastructure would be more developed and most reliable. Otherwise, we'd be creating, perhaps, unnecessary business challenges for ourselves during this getting-started phase.

We found and rented an apartment in a brand-new tower in Punta Paitilla, on Calle Winston Churchill, that became our home for our first year in Panama City.

It was a good first step. In Paitilla, you're very nearby two of the city's biggest malls, as well as two of its most expat-friendly grocery stores (Riba Smith and the kosher Deli K) and what has become my favorite furniture store in the country.

A few blocks from our apartment also was a pharmacy, a dry cleaner's, a hardware store, a pet shop, and a small greengrocer, plus a movie theater, a bowling alley, a budget-level hotel where visiting friends and family could stay, a higher-end hotel, and the Hard Rock Café. All these nearby resources made our adjustment period (including, and importantly, furnishing our new digs) easier to navigate.

As Lief had predicted, life in Paitilla was comfortable and convenient. From this central base, during our year in residence, we were able to explore the city, get our bearings, and figure our next, longer-term move.

This first apartment was rented (rather than acquired), because, while we agreed that Paitilla made good sense as a first step, we were both pretty sure it wasn't where we wanted to be based in Panama City long term. We were right.

The reasons, though, why we decided that Paitilla didn't suit us long term, were less to do with Paitilla than to do with high-rise living. Paitilla we liked. This neighborhood is not only convenient and user-friendly, but it's also one of the greener parts of Panama City, with a large park overlooking the Bay of Panama where Jack could play catch with his dad and ride his skateboard with his friends.

As well, Paitilla is a residential zone. You find the grocery stores and other shops I've mentioned, but no office towers or government buildings. While much of the rest of the heart of Panama City is clearly open for business, Paitilla remains an enclave reserved for families. You see children riding their bicycles and nannies pushing their charges around in strollers, not businessmen in suits rushing from meeting to meeting, as you do in Marbella, say.

Paitilla is one of Panama City's most established neighborhoods, a place where the upper-middle class has been raising its children for generations. Today, 20- and 30-something Panamanians with the resources to afford it prefer Costa del Este. Still, Paitilla has a lot to offer a family with young children.

What it doesn't have are houses. This peninsula is a jungle of high-rise apartment towers. They all have "Social Areas," with swimming pools, party rooms, and, sometimes, playgrounds and gyms, but, living in a high-rise, you don't have a patio or a back yard.

And, while some of Paitilla's towers are brand-new and fully loaded (in terms of amenities), they couldn't be described as charming. Built of concrete, glass, and steel, they're hardly cozy.

Long term, we knew that we wanted both a garden area and a place that felt less like the big city and more like home. Since that first year in Paitilla, we've made two subsequent moves, trying other areas of this city on for size. We're settled now in a house in Marbella with a big back patio bordered by gardens with mature trees and flowers. We even have room for a basketball hoop. Finally, we feel like we've found our place in this city.

But that's us. Depending on your situation and your preferences, Paitilla...or some other neighborhood entirely...could be what you're looking for in your new home in Panama City.

Here's my real point: Wherever you're considering launching your new life overseas, give yourself time to get to know your new city (or town or beach) before committing to long-term digs.

It takes time to peel back the layers of a penetrate beneath the tourist get a feel for what it'd be like to be a resident, rather than a visitor.

Kathleen Peddicord

If you haven't already heard about this, take a look at the video here now to get the full details on this situation.

P.S. What else this week?

  • Moving around Italy these past couple of weeks, we haven't been scouts, but tourists. Still, passing through Venice, Ravenna, Rome, Pisa, and, now, Florence, we've made observations related to the idea of living or retiring in these cities.

Specifically, we've been asking ourselves: Would we want to?

Two or three days in each of these places hasn't been enough time to find an answer to that question, of course. On the other hand, sometimes, 24 or 48 hours is all the time you need to determine whether you might want to invest the further time required to find out if a place might suit you long-term.

In that context, here are our snap impressions of these five Italian cities...

  • In these dispatches, I give a lot of virtual ink to Latin America. That's because it's nearby to North America (where most of our readers currently reside) and because it can be cheap and sunny (two things most would-be expats and retirees abroad actively seek).

But there's a world beyond these Americas that can also offer good weather and a low cost of, in some cases, some things you won't find here. For example...

  • "Most Americans spend 85% of their household budgets on three things," writes Retirement Planning Correspondent Paul Terhorst:

"Taxes, cars, and housing.

"Of the three, housing accounts for by far the largest share. Get rid of the house, and you suddenly have a great deal of money to spend. In your new life overseas you may have to rent, live in smaller quarters, or otherwise get along with more discreet shelter. But you'll have so much more money to spend, so many more choices, you'll hardly notice..."

Also This Week...from Resident Global Real Estate Investing Expert Lief Simon:

Here's something I've learned in my now nearly 20 years of experience investing in real estate around the world:

The best deals find you.

You've got to be "in the market." By that I mean you need to have done your market due diligence.

You need to have connected yourself on the ground...established relationships, with local attorneys, real estate agents, resident expats, etc., letting them all know that you're looking for property.

You need to have established your personal parameters, for things like price range, type of property, size, location, intended use, etc.

You need to understand relevant country-specific issues--for example, ownership regulations (specifically, restrictions on foreigner ownership), property taxes, and capital gains taxes.

Most countries impose foreign ownership restrictions along international borders. In Panama, for example, it's not possible for a foreigner to purchase within 10 kilometers of the border with Costa Rica. In Mexico, you can't own within 50 kilometers of any border. Argentina says the limitation is 50 kilometers, but, in reality, the line moves depending on the type of land being purchased. The restrictions within these zones can be complete (Panama) or simply can require you to gain approval from some ministry (Argentina).

To be "in the market" anywhere in the world, you also need to understand relevant investment-specific issues--for example, which are the most rentable neighborhoods, which kinds of properties rent best (an apartment with one-bedroom or two?), what's the rental season, and who might best be targeted as a potential renter (traveling executive or tourist, for example).

Once you've carried out all this background work, you can set off on a property hunt. Meeting with local agents, reading local classifieds, calling local owners, pounding the pavement in search of For Sale signs. I'm not suggesting you shouldn't do those things...

But, in my experience, again, sometimes, the best deals come to you.

This isn't only chance. It's because the best deals don't ever make it to agency windows or classified ads. They're sold before any public marketing is done.

This was the case for our apartment in Paris. We were well established in this market and had been nosing around for months. Then, finally, one day, one of the agents we'd been working with happened to mention that a friend of a friend was in the process of getting divorced and, therefore, looking to sell her apartment quickly. The place wasn't yet officially for sale, and the agent didn't yet have a signed listing agreement. We persuaded her, nevertheless, to arrange to show the apartment to us the same day she'd mentioned it.

That's how we were able to buy in a prime Paris neighborhood for a well below-market price. We were in the right place at the right time.

If we hadn't jumped on the opportunity when it presented itself, someone else would have. This apartment listing, once it was official, never would have made its way to an agent's window. In Paris, as in many other markets, the places you see listed in the agents' windows are the leftovers.

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Kathleen Peddicord

Kathleen Peddicord is the founder of the Live and Invest Overseas publishing group. With more than 25 years experience covering this beat, Kathleen reports daily on current opportunities for living, retiring, and investing overseas in her free e-letter.

Her book, How To Retire Overseas—Everything You Need To Know To Live Well Abroad For Less, was recently released by Penguin Books.

Read more here.


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