Panama ... a Top Choice for Offshore Living/Retiring and now ... Tourism!

Panama Vacation Rentals

The New York Times recently ranked Panama as their #1 pick for "best places to visit in 2012". Come on down and get with the program. You will NOT be disappointed.

Panama is not only a great place to visit but this tropical paradise lets you enjoy life without the usual cash flow worries if you have more permanent plans in mind.

Here you can seriously stretch your passive retirement dollars and exceed your standard of living up north by spending roughly 40% of your "back home" budget.  Imagine what that could do to your retirement saving targets!

Check out Panama and plan a visit to "Las Bougainvilleas" in spectacular Coronado across the street from Playa Serena. Coronado has recently been selected by International Living as their #3 retirement community in the world after one in Mexico and another in Ecuador.  

                                    Playa Serena Across the street from "Las Bougainvilleas"

Some important reasons to consider Panama and staying at Las Bougainvilleas (Coronado):

1. Wonderful weather year around. No snow. No hurricanes. No earthquakes. 
2. Cost of living averages 40% for the same standard of living in Canada or the USA.
3. Excellent medical care is available at first class hospitals with English speaking doctors.
4. You can easily obtain low cost, adequate, health insurance with NO AGE RESTRICTIONS.
5. Your policy will have a two year pre-existing condition clause, a 30% co-pay and a $25,000 annual limit which is actually more than adequate for 99% of conditions.
6. Permanent residency in Panama is available under at least 5 different programs.
7. Restaurants cost about 50% less than similar restaurants in North America
8. Friendly and helpful people everywhere with many expats from North America and Europe to meet.
9. As for crime and safety, Panama's "victimization rates" per 100,000 are much lower than in North America although homicide rates are much higher. For example, Canada has victimization rates that are 12 times higher than Panama.
10. Excellent entrepreneurial and small business opportunities exist if you are so inclined.
11. Panama has a low personal and corporate rates compared to North America and Europe.
12. Panama is one of very few countries that does NOT tax you on your world income.
13. After Switzerland, Panama is the largest international banking center.
14. Panama uses the American dollar (actually the 'Balboa') making comparative budgeting and money transfers very easy.
15. Panama has enjoyed a very high economic growth rate for the past decade and the future remains bright. As on April 2012 the unemployment rate in Panama is 4.5%.
16. Although housing prices have risen, this is still a good time to purchase or build a Panamanian house or condominium.  

Panama Enjoys High Ratings

For most of the past decade Panama has been selected as "the best offshore country in which to live/retire" by International Living. In 2011, more specifically "Coronado" (Panama) was selected as the third choice after Ecuador and Mexico and just ahead of Punta del Este Uruguay. Ecuador won out primarily because of a very low cost of living. Italy and France were high on the list but residency issues, taxes, medical care and cost of living considerations are a serious cause for concern except for short visits.

The Panama Tax Advantage

Panama is one of only a few countries in the world with a "territorial tax policy". Panama does NOT tax you on your global income. In fact, income derived from sources outside of Panama are typically "tax free".  

As an American citizen living in Panama, your first  about $85,000 of active regular salary or business income is also tax free for IRS purposes but you have to live outside the USA for at least 330 days in a single calendar year to qualify. All of your investment income and other "passive income" are still subject to American taxes. As an American citizen, all global income must be reported to the IRS unless you renunciate your American citizenship.

As a Canadian citizen and for most Europeans, your non-Panamanian income is typically tax free without limit if you have permanent residency here and/or live outside your own country for more than 183 days in a calendar year.

The Cost of Living in Panama

One can live comfortably on about 40% of what it costs in North America on "after tax" dollars. If you are very careful you can live substantially better on one-third. For example as of 2012 my wife and I can live very comfortably on $2,000 per month without any debts. 

The Panama Canal

The $5.25 billion "Third Lock" canal project was approved in October 2006 with completion set for 2014. The improved Canal will be able to accommodate the largest cargo ships with 8000+ shipping containers on board permitting a low cost flow of trade. The World Bank funded a significant portion of the construction costs.  Panama is currently the second largest container transport hub in the world with major new expansion approved for Colon.

Panama and the Web

Four of the five major global transoceanic fiber optic companies run their lines through the Panama Canal making Panama an excellent choice for a major ecommerce internet business. Standard home ADSL internet service is available at 6 meg for about $35/month (2012) if combined with cable TV etc..

Banking in Panama

It remains a relatively difficult task to open a simple checking bank account in Panama. Banks are very methodical and will check out every detail of your application. The Panamanian banking system is sophisticated and scrupulously applies the "know your customer" guidelines to the hilt. Panama has been removed from the OECD "black list" and complies with international standards for transparency.  

Crime in Panama

Homicide rates per 100,000 are much higher in Panama (19) than in the USA (6) or Canada (2) however, they remain highly concentrated in several "red zone" districts in Panama City and Colon. Panama is located between cocaine producing Colombia and cocaine consuming North America. The vast majority of violent crime occurs in the 16 to 27 male age group during the hours of 9 PM and 3 AM, for persons active in drugs, money lending and prostitution in a red zone.

More importantly, "victimization rates" per 100,000 (e.g. rape, burglary, kidnappings, home invasions, assault etc) in Panama are dramatically LOWER than in either Canada (which is 12 times higher) or the USA (about 7 times higher).   

As an expat/tourist you could become a "target of opportunity" and you should take the same precautions, particularly at night, as you would in any major North American city.

Johns' Hopkins Hospital

The state-of-the-art "Johns' Hopkins" Hospital (opened in 2006) in downtown Panama City in the Punta Pacifico area and is their  their first "off-shore" franchise. This hospital chain is typically ranked #1 in the USA.  

There are also at least 4 other high quality hospitals in Panama City typically affiliated with an American hospital chain. A triple heart bypass costs $20,000  to $25,000 in Panama City compared to about $125,000 to $150,000 in the USA.

Panama City Skyline

The Panama City skyline currently resembles New York's "downtown" area and is architecturally more attractive. It is at least six times more dense in terms of ritzy high rises than the skylines of either Montreal or Miami with at least 250 significant commercial or residential "skyscrapers" (and counting) in a concentrated downtown area with several towers over 100 floors.

Construction incidentally is the number one employment sector. The new Trump Tower has had 2500 workers on site for several years and is now "completed" although there remain some funding issues.

Panama Residency Conditions

Panama has some of the best residency conditions in the world for people wishing to retire or start a new business. If you can prove an "arm's length" pension income of USD$1000 per month you meet the financial conditions. There still remain some medical and police record conditions but unless you are a convicted felon these are rather easy.

If you purchase a house for $300,000 you can gain residency as a "financially solvent" person. There are other several residency options including setting up a business, investing in a teak reforestation project ($80K), and investing sufficient money in a bank to provide the required pension income of $1000 per month. 

The total legal costs for a couple to become "pensionados" are generally in the range of $1500 to $2000. This is a one time expense and residency lasts forever with no restrictions on time spent in Panama.