On Murkey Beach…Just Off Swamp Lagoon…

Live, Retire, Invest, Start A Business In Panama, 2009’s Top Offshore Haven

While we’ve been fully occupied with our conference these past two weeks, the Mailbag has filled to overflowing. Let’s dive right in…

“Kathleen, I so appreciate your newsletter. We found it when looking up global real-estate investments. You are giving a wonderful educational service to many Baby Boomers. Thank you.”

— Carolyn and Larry B., Canada


“I agree with you regarding the downsides to living in Panama, and it’s the same thing in most all Central and South American countries, as well. In the States, if you call for some type of service, and you don’t like it, there are always other businesses to call. There is competition and therefore options.

“I lived in Ecuador for a couple of months and just got back to the United States last month. It was so frustrating to try and get something done down there. You never knew when you would have water in your apartment.or electricity.

“Just different ways of living and thinking between North Americans and other cultures. There’s so much more of a relaxed attitude toward things in those countries.”

— Ronald S., United States


“Kathleen, I enjoy your newsletters very much, and I will make the leap to join you at a conference one of these days!

“My question right now is this…

“A lot of your advice seems tailored for mature expats…families on a retirement budget. That’s great, except…I’m 26 years old, single, and make 5 figures a month (and can do my ‘job’ anywhere).

“I’m not American and am looking for somewhere that is tax-efficient and safe and that offers great weather and very good lifestyle opportunities. I’m in Thailand right now, but I do not feel the lifestyle caters for much. I had considered Switzerland, too, as a basis for comparison.

“For your slightly younger, more footloose audience…are your recommendations any different at all?”

— Lee B., Thailand

If money doesn’t matter, my top recommendation is France, especially Paris. Even on a modest budget, France can be a top pick (especially the “Other South of France,” as our Correspondent Lucy Culpepper calls it…full details in the March 15 issue of the Overseas Retirement Letter), but on the budget you describe, I’d put Paris at the top of your list.

Paris and France certainly meet your lifestyle criteria. The options for interesting cultural and recreational diversions are greater and more varied in Paris than anyplace else on earth.

No, the weather’s not great year-round. But spring and fall are hard to beat…and summer can be idyllic along France’s Mediterranean coast. Use the winter months as an opportunity to travel.

The one thing France isn’t is tax-efficient. But if you structure your business and organize your income carefully, you should be able to avoid a French tax obligation.


“Kathleen, where would you consider between Panama, Puerto Vallarta, Belize, the Yucatan, or Rotan? I am not a mountain-climber but more of a sun, white sand, and relaxing type. However, I don’t want isolation. One needs other expats around!”

— Georgina R., United States

Roatan, in the Bay Islands of Honduras, and Ambergris Caye, off the coast of Belize, both sound like good choices for you, dear reader. Lots of sun, white sand, and relaxation, plus established and growing expat communities in each case.

The Yucatan has sun, certainly, but not much of a gringo community for you to plug into.


“I am looking at Spain for retirement and am concerned about taxes. The EU, at the prodding of the Obama team, is losing some of its banking havens. What are your feelings about EU tax havens (Andorra or Switzerland)?”

— Darrell H., United States

Our resident international tax expert and attorney replies:

“Because the U.S. taxes worldwide income, an American moving to Europe does not benefit from the E.U. tax havens. The reason these places work for E.U. citizens is because some of these countries do not tax foreign source income until it is brought in to the country.

“An American living and operating a business abroad should incorporate that business in an offshore jurisdiction, use the foreign-earned income exclusion, and retain the rest of the profit in to the offshore corporation. As an American abroad must follow the U.S. rules, it does not matter what the E.U. does.”


“Kathleen, I don’t get it. Two days ago, you sent a message telling us nine reasons not to move to Panama, which sounded very negative. Now you send another message saying Panama is paradise. What is the truth?”

— David L., United States

Both things are true.

As we discussed with attendees at our Live & Invest Overseas Conference last week, Panama offers an abundance of opportunity right now. This is the best place in the world to retire, to start a business, to be tax-efficient, to invest in raw beachfront, and to have a grand adventure.

Panama is 2009’s top retirement, offshore, tax, and investment haven. That is not to say it’s perfect. And that is not to say it’s for everyone.

There’s no such thing as a one-size-fits-all retirement or investment haven.

Panama checks a lot of boxes. In addition to its retirement, investment, tax, banking, and offshore advantages, this country also boasts two long coasts and many sand-fringed islands. In its interior, the climate is springlike year-round. In the waters off its coasts, the fishing, diving, and snorkeling are among the world’s best.

There are reasons Lief and I are in Panama right now, when, in truth, we could be anywhere in the world. Over the past few years, as we surveyed the global landscape in search of a place to indulge our entrepreneurial inclinations, we considered a dozen places. We concluded that nowhere else offers a comparable combination of advantages.

On the other hand, we’re not blind to Panama’s downsides nor to the challenges and frustrations of living here.

It’s a question of priorities. What’s important to you? What could you not live without?


Only US$200 a month? Swell! Sign me up for another one. Wait, this wouldn’t be on Murkey Beach, just off Swamp Lagoon, would it?”

— F.W. M., United States

No, no, dear reader, not Murkey Beach and nowhere near Swamp Lagoon.

This is Las Tablas, on the eastern coast of Panama’s Azuero Peninsula.

In fact, this is where our own Rebecca Tyre currently resides…in a cute little beach house for which she pays US$200 a month in rent.

Rebecca elaborates:

“I know it sounds incredible to talk about a house on the beach in Panama that you can rent for US$200 a month. The really incredible part is that it’s true.

“You will not find a US$200 a month beachfront rental at the beaches near Panama City, but, come on out here to Azuero, and I promise you: Mine is not a one-off.

“There are houses here in the town of Las Tablas, like mine, that are just a few years old, with three bedrooms, two bathrooms, an office, and a big patio, that rent for US$200 a month. These houses, again, like mine, are located just a few kilometers from the beach.

“And Las Tablas isn’t your only option. You can also find two-bedroom beachfront houses at nearby beaches (including Playa El Jobo and Playa El Estero) for US$200 to US$400 a month.

“Here’s the secret: Don’t source your rental on the Internet or through a real estate agent.

“My neighbor, living in a house identical to mine, is paying US$500 a month in rent. He organized the rental through an agent.

“I found mine on my own. I came to Las Tablas, wandered around the town, found where I wanted to live, and then asked around about available rentals. By renting on the local market (as opposed to over the Internet) and by cutting out the middle man, I’m paying 60% less.”


“Kathleen, I cannot attend your conference in Panama but am interested in relocating there and have a ton of questions.

“I am 55 years old and rebuilding my life after a bad business investment and a recovery from bankruptcy. The reality of retiring in the U.S. is not looking good. I am now employed at a large corporation that would allow me to work remotely, so, realistically, I could continue to make a good salary anywhere in the world that has high-speed Internet.

“Where and how can I get more information on working from Panama? I’m more than willing to pay someone for this information. I’d prefer speaking with someone rather than reading a book. Too many questions to ask…”

— Tony S., United States

Our Panama Circle membership service was created with you in mind, dear reader.

Once you’ve determined that Panama is the place for you…then the real work begins. As you’ve already figured out, at a certain point, no amount of research or reading will suffice.

You need to be able to put your questions to people who’ve done what you’re now preparing to do. You need personal, one-on-one access to experts and expats based in the country. You need introductions to reliable and proven resources. You need someone to take you by the hand and walk you through the process of establishing yourself as a foreign resident, investor, or businessman.

That’s what the team of Panama experts associated with our Panama Circle membership program are standing by, ready, willing, and able to do.

If you know Panama is the place, then Panama Circle membership just makes sense. In addition to the personal connection to our top resources in this country, Panama Circle membership also brings you:

  • Your own personal assistant, our own Marion de Mena…
  • Free attendance at any and every (if you want) Panama event we sponsor…
  • Every Panama resource we publish…including every new edition of the Panama Kit…
  • US$3,000 toward the purchase of real estate in this country…

Plus…all these benefits are for life.

Weigh the benefits…consider the cost…and, frankly, it’s a no-brainer.

It’s also without peer. No comparable service exists anywhere else.

Kathleen Peddicord