The 10 Questions that We Get Asked the Most about Panama

Moving to Panama is a big decision, and everyone has questions, below are the 10 that we here the most, although there are many more.

1. What does it cost to live in Panama? Renting, food, utilities, etc.

In Panama, there is a budget for almost anyone. I know people living on a pension of $1000 a month, and those that live on $5000 a month. It all depends on what amenities you like, restaurants you dine in, weather you need a vehicle, and other factors.

In the more rural areas of Panama, for a $1000 a month budget, (about 1400 for a couple),both the beach and mountain areas, away from the large expat populations, you can rent a decent Panamanian style house, fully furnished for a little as $350 a month. Now this will be a very basic house, typically small kitchen, no granite counter tops or dishwasher, cold water at most of the taps, with a hot water shower. Probably 2 bedroom, with some outside covered patio area.

You will be using public transportation, a $10 phone card per month, basic high speed internet, shopping at local markets, and eating our in Panama tipica restaurants 2 – 3 times a week. You will be using the public hospital system, with some catastrophe health insurance for anything major. Life will be quiet and simple, if that is your budget, and what you are looking for.

For a $4000 a month budget, you may be living in a 1500 sq ft, North American style bungalow, or beach condo, paying $1500 a month, in one of the larger beach or mountain expat communities. You will have full private hospital medical coverage, shop in the big box grocery stores, own a car, take weekend getaways, eat at nice fancy international restaurants, enjoying your retirement years as you had hoped you could.

Most expats live in between these budgets, on about $2500 a month for a couple, and live very well and comfortable.

Read this article about the true cost of living in Panama.

The 10 Questions that We Get Asked the Most about Panama2. What is the healthcare like there?

Panama has a 3-tier health care system, first, Public Hospitals, very inexpensive, and available to all, in a pay as you go system. Doctors visits as low as $12, lab tests $15, and minor surgeries under $100. I know an expat currently living in Panama, that just when through a hernia operation in the Public Hospital, and he felt the care was great, and the total cost, $175. The Public Hospitals do have their problems, with over crowding, shortage of medicine and doctors.

The second system, is the Social Security Hospital System, reserved for workers paying into Social Security, and seniors collecting their Social Security benefits. These people carry a document, that gives them access to the health services in Social Security clinics and hospitals for no charge.

The third system, is the Private Hospital system, which is more like the North American system, an pay as you go, or covered by private insurance system. Private insurance is quite affordable in Panama, with some 65 years old, able to get full coverage, with as little as $1000 annual deductible for about $2500 a year.

Read more details about the healthcare system in Panama.

3. What is crime like in Panama?

Crime is everywhere in the world, don’t let anyone tell you that there is no crime in Panama. It is like any country, there are bad areas and there are good areas. What most people find surprising, that overall the crime per capita, is much lower than North America and most places in Europe.

If you look at stats like total crimes per 1000 people, based on all countries, the United States is #22, Germany # 11, Canada #10 and Panama #64. Source

If you look at crime index reports, which are calculated a little different, and show more of the total safety of the country, the United States scores 46.73, Canada 39.48 and Panama 45.47, showing Panama overall just as safe as North America. Source

But in any country, especially when you are a foreigner, and the countries people may be poorer than you back home, you must remain vigilant. Most homes in Panama have bars on the doors and windows, which almost eliminate home invasion type crimes. The police force is more present, keeping people safe. I have live here 8 years, in different areas of the country and have always felt perfectly safe. In Panama city, downtown area, and most smaller towns in the country, it is perfectly safe to walk the streets at night. Just stay away from the bad neighborhoods.

4. What residency visas are available, and what is involved in getting one?

Panama offers many permanent residency pats, in fact over 20 of them. There is, however two popular ones, and I will discuss those.

The Pensionado Visa – this is by far the most popular visa for retired people. It is probably the easiest visa that anyone can get in any foreign country that you may want to move to. People that have a current pension, for a government or company, in excess of $1000 USD per month, can qualify for this visa.

To qualify for this visa, you will need to get a criminal background check in your home country, some documents like proof of pension, birth certificates, marriage license, get them apostled, bring them to panama, meet with the lawyer, in about a month, you should have your temporary visa card, and within 4 – 6 month, your permanent residency card. The total cost will be about $2400 single, and $300 for a couple. That is it, nothing more and you are a permanent resident of Panama.

Friendly Nations Visa – This one is also very popular, and for a person that is not receiving a pension, it could arguably be one of the easiest, cost effective visas any country is offering. There are 50 countries that qualify for this visa, you will need your background check, bank reference letter, proof of income, marriage license and birth certificate. Here in Panama, you will meet with your lawyer, get things rolling, and in a month, have your temporary visa, and 4 – 6 months, permanent one. This visa is designed for economic activity, so it comes with a corporation, and you will have to deposit %5,000 into that corporations bank account during the process. After the process you can take this money out, and there is actually no requirement to do business, just set it up.

The best thing about this visa, is that it can lead to a work visa, if you want to work in Panama, or if you want to run a business where you will be working in it.

Read more about the Visa options in Panama.

5. Do I have to pay taxes in Panama?The 10 Questions that We Get Asked the Most about Panama

Panama has what is called a Territorial Tax System, as opposed to the USA’s Taxation by citizenship, and most other countries Taxation by residency. A territorial tax system, which is used by about a dozen countries, is quite unique. If you are a resident of Panama, you only pay income tax on Panama sourced income.

For example, if you come here with a work visa, and have a job, you will pay taxes here. If you open a business here, lets say a bed and breakfast, you will pay taxes on the income you earn here.

Lets say you move here, and receive a pension from another county, you do not pay taxes on that income in Panama. Or, you move here, and you work online, for a company in another country, or sell goods and services in another county, you will not pay taxes here. This does make Panama very attractive to the digital nomad crowd, as if you are from a taxation by residency country, and become a Panama resident, and your work involved receiving income only from countries outside of Panama, you could effectively live income tax free.

Even you you are from the United States, who’s government want to collect taxes from its citizens no matter where they live, you will receive a $100,000 foreign resident tax exemption, allowing you to earn up to $100,000 tax free. Of course check with you accountant in Panama, and in your home country to make sure you are doing everything legal.

Read all about international tax systems and how they relate to Panama.

6. Where are the best places to live in Panama?

This will depend on a lot of things, depending on your personal preferences, so I will discuss the most popular places to live in Panama. For the city lover, Panama City is know as a mini Miami, but a lot cheaper. Great restaurants, theater, high rise condos, ocean views and sage, make it a popular expat location. If you are a beach lover, the areas around Coronado are very popular, Pedasí is up and coming, and in the western area of Panama, Las Lajas, Barquete, and Puerto Armuelles are populat. On the Caribbean side, of course Bocas del Toro.

Read where most expats live in Panama.

7. Can I work in Panama, or open a business?

If you are looking for a job in Panama, there are a few things you need to know. Most jobs in Panama would require you to be fluent in Spanish, as it is the official language in this country. And you will need a work visa to get a job, and this will require 4 – 6 months of being here, before you have that work visa. Very few companies sponsor foreigners for jobs, that really is not done here a lot. Also, panama has protected professions, that foreigners cannot not work in here, like doctors, lawyers, medical assistant, accountant, hair dresser, and many others.

Opening a business for a foreigner, is quite simple in Panama, and very popular with expats. If you open the business, you have the right to work in that business in a supervisory role, but you did need a work permit, if you will be doing an actual job in the business. Many expats here have opened business in everything from restaurants, hotels, car service, etc. But if you want to attract the Panamanian customers, you will have to hire Panamanian employees, and probably a Panamanian manager.

Do remember one thing, if you come to Panama with the popular Pensionado Visa, you cannot work. By getting that visa, you are declaring to Panama that you are retired.

The 10 Questions that We Get Asked the Most about Panama8. What is the weather like in Panama?

Panama is a maritime tropical climate, with temperatures along the beaches in low lying interior in the evening 22° C (75° F) and daytime highs of 33° C (92° F) daily. In the mountain communities, these temperatures are up to 10° C (15° F) lower. Panama has a dry season from January through April, with very little rain, April through September will see rain in the late afternoons, 2 – 3 times a week, and October through mid December, quite wet.

Read all about the climate in Panama.

What is involved in buying a house in Panama, and how much are property taxes?

Buying real estate in Panama, is not much different that in North America, but you do have to be more careful. There are some not to honest real estate agents, and proper title of the property has to be addressed. Also, Panama MLS system, is very new, and not all companies are part of it, so you can find the same house listed at different prices, with different real estate agents. You need to be careful, and fine a good and honest real estate agent, and if you are looking at a for sale by owner property, you must have a good real estate lawyer. On our Retire in Panama Tours, we will introduce you to the best in these fields in Panama.

Property taxes are very low in panama, and they work on a sliding scale. There is no tax on the first $120,000 value of the property. Then on $120,001 – $700,000 the tax is 0.5%, the on the value over $700,001 it is 0.7% Also, depending on the year of construction, and the value of the property there can be, for up to 20 years of the property’s life, an exemption from property taxes, and this is passed on to the new owner.

What is the cost and quality of Internet?

Quality, fast internet is offered in most places in Panama, and if you are buying or renting a home, and you need fast affordable internet, make sure you have it available, as if one of the two largest high speed providers are not available in your area, especially if you live in a low populated rural area, you may have to resort to expensive, slow wireless options. In the populated area, speeds for 60 megs to 1000 megs are available starting as low as $28 a month. Packages of 60 meg internet, 200 TV channels and a home phone lie can be had for as low as $50 a month.

Maybe you have other questions, that have not been covered here, why not Contact Us, and ask them.


Retire in Panama Tours

It’s more than a tour . . it’s an experience.