Panama is a popular destination for expats looking to move overseas. It offers a high quality of life, favorable tax laws, tropical climate, lower cost of living and welcoming locals, among other things. If you’re considering a move to Panama, here are some key things to keep in mind:
- Visa Requirements: To live in Panama full-time, you’ll need a residency visa. There are several different types of residency visas available, including investment visas, pensioner / retirement visas, friendly nations visas, and more. Panama’s immigration laws are amongst the most liberal in the Western Hemisphere with over a dozen residency visas so foreigners can become permanent residents by investing in Panama’s economy for as little as $100,000 USD. The Panama retirement visa, also know as the pensionado visa, applies to anyone over 18 years of age who are receiving monthly lifetime annuities or pensions of a minimum of $1,000 USD can become permanent residents.
- Cost of Living: Panama’s cost of living is significantly lower compared to U.S., Europe and the Northern Hemisphere according to a recent Global Cost of Living survey conducted by The Economist. A comfortable salary in Panama is between $2,000-3,000/month, whereby one can live happily. But of course it all depends on your lifestyle. To afford yourself a comparable lifestyle to one lived in a medium size U.S. city, you can expect overall costs to be about 25% less – one of the many great reasons to move to Panama. And because the US dollar is the official currency in Panama, it’s easy to keep track of your expenses. Read more about Panama’s cost of living.
- Healthcare: Panama has a modern private healthcare system with many qualified doctors and hospitals. If you’re living in Panama full-time, you’ll need to sign up for the country’s national healthcare plan, which is affordable and comprehensive, though the best care can be found at private hospitals of which the best are located in Panama City.
- Property Ownership: Foreigners can own property in Panama with very few restrictions. This makes it easy to buy a home or invest in real estate in the country.
- Climate: Panama has a tropical climate, which means that it’s warm and humid all year round. The country also experiences a rainy season from May to December, so it’s important to plan accordingly.
- Culture: Panamanians are known for their friendly and welcoming nature. The country has a rich cultural heritage, with influences from Latin America, Spain, and other parts of the world.
- Income tax rates – Income earned outside of Panama is tax free (in Panama) due to Panama’s territorial tax system which only levies taxes on income earned from within the territory of Panama. Panama offers a low 25% corporate tax rate on its corporations. Employees and self-employed in Panama earning less than $11,000 USD are not subject to income taxes. Employees and self-employed who earn between $11,000 USD and $50,000 USD only pay a low 15% tax rate on net income after deductible expenses. Those making $50,000 or higher pay a flat 25% tax rate on their net income after deductible expenses. IMPORTANT NOTE: US persons (citizens or residents) pay tax on their world-wide income regardless of where they reside, therefore, these income tax benefits do not apply to US citizens.
- Safe haven for foreign investments – Article 44 of Panama’s Constitution protects real estate private ownership and private investments. The Civil Code of Panama guarantees equal application of the law for citizens and foreigners including leases and commercial contracts. Panama even has a Foreign Investor Protection Law (Law 54 of 1998) providing equal rights for all foreigners in all business matters of trade, industry, importing and exporting. Panama guarantees that foreigners can dispose of their investment profits as they see fit including repatriating their investment funds and profits to other countries with the unimpeded right to commercialize their production in Panama. This is a great incentive for foreigners looking to relocate to Panama.
How to Move to Panama
Moving to Panama is an excellent decision for individuals and families seeking a change of pace, a more relaxed lifestyle, and an affordable cost of living. Here is a step-by-step approach to move to Panama successfully:
The first step when moving to Panama is to obtain residency. The most popular options are the Pensionado Visa or Friendly Nations Visa. The Pensionado Visa is available to persons of all ages who receive a lifetime pension of at least $1,000 per month. The Friendly Nations Visa is available to citizens of 50 countries that have a friendly relationship with Panama. It requires applicants to provide proof of economic solvency via two options: 1) Be employed in Panama by a legal Panama Corporation with a formal labor contract, and a work permit. 2)Purchase a real estate property with a minimum value of US$200,000 (bank financing is permitted).
Renting or Buying a House:
Panama offers various housing options, including apartments, townhouses, and single-family homes. You can rent or buy property depending on your budget and preferences. It is advisable to work with a real estate agent who can help you find suitable properties in your preferred neighborhoods.
Opening a Bank Account:
To open a bank account in Panama, you need to have your passport, residency card, and proof of address. Most banks require a minimum deposit, usually around $500, and a reference from a current client or employer. It is best to research banks’ services, fees, and reputation before opening an account.
Choosing a Place to Live:
Panama offers different areas to consider from the bustling city of Panama City to the tranquil beach areas such as Coronado and Pedasi. Factors to consider when choosing a place to live include proximity to schools, hospitals, shopping, and entertainment, safety, and accessibility. It is advisable to visit the areas beforehand if possible or consult with locals or expats.
Other Important Requirements:
When moving to Panama, it is essential to ensure that you have all necessary documents, including birth certificates, marriage certificates, and academic transcripts. You may also need to get vaccinations, renew driver’s licenses, and register to vote. It is essential to seek professional advice from a Panama immigration lawyer who understands Panamanian laws and regulations to ensure a smooth transition to life in Panama.
Moving to Panama can be a life-changing experience, but it is essential to plan ahead, research and gather the necessary information to make the transition as smooth as possible. With careful planning and guidance, you can successfully move to Panama and enjoy its unique beauty and charm.
Relocating & Moving to Panama FAQs
Can I collect Social Security if I live in Panama?
Do they speak English in Panama?
How long can a US citizen stay in Panama?
Can a foreigner buy a house in Panama?
Do foreigners pay taxes in Panama?
What are the best neighborhoods for expats in and near Panama City?
Considering different factors such as safety, amenities, proximity to essential services, and availability of English-speaking communities, the following neighborhoods tend to be popular among expats in Panama:
- Casco Viejo: Also known as the Old Quarter, it’s a UNESCO World Heritage site and a trendy area with colonial architecture, cultural attractions, upscale restaurants, and nightlife.
- El Cangrejo: Located in central Panama City, this neighborhood offers a mix of commercial and residential areas, parks, cafes, and a diverse community.
- Punta Pacifica: A high-end residential area near the Pacific Ocean, it features luxury apartments, shopping malls, and medical centers.
- Clayton: Situated within a lush forest reserve, this neighborhood is home to many expat families, international schools, and research institutions.
- Coronado: A beach town on the Pacific coast, it’s a popular retirement destination for expats due to its relaxed lifestyle, affordable housing, golf course and proximity to Panama City.
How Safe is Panama?
What is the healthcare system like in Panama?
What is the climate like in Panama?
What are the best schools for expat children in Panama?
Based on research and reviews, here are some of the best schools for expat children in Panama:
- International School of Panama
- Balboa Academy
- Oxford International School
- King’s College Panama
- Metropolitan School of Panama
- Knightsbridge Schools International Panama
- Colegio San Agustin
- Crossroads Christian Academy
- The British School of Panama
- Panamerican School of Panama
These schools offer international curricula, excellent facilities, a multicultural environment, and extracurricular activities to suit the needs of expat families. It is advisable to visit the schools and talk to current students, teachers, and parents before making a final decision.