For 2014, the Huffington Post selected Panama as the #1, best place in the world to retire. Check it out at
In January 2013, Kathleen Peddicord, Editor and Publisher of “Live and Invest Overseas” chose Coronado Panama as her #1 choice for best offshore living/retiring in the world. Kathleen has been in the “offshore living” business longer than anyone and now approaching 30 years. For 2013. International Living picked Panama as their #2 choice with Ecuador #1.
The New York Times chose Panama as their #1 “best place to visit in 2012″. With the new International Rio Hato Airport expected to open any day now (January 2014), the pace of development for Coronado should increase dramatically. For the last decade,
Panama has received a continuous stream of accolades from the international press as “the tropical paradise” in terms of weather, a low cost of living, sensible (or no) taxes, friendly people, a laid back “manana” life style, plus a very entrepreneurial business environment if this is happens to be your thing.
Panama was one of the fastest growing economies in the world for 2012 at 11.6% and for 2013 almost 8%; it has been growing faster than China for the past 6 years. At current growth rates, Panama is expected to achieve the highest per capita income in all of Central and South America with only Chile, Argentina and Uruguay slightly ahead today in terms of per capita income terms.
In Panama you can retire and enjoy life without the typical cash flow problems. As of 2014, the cost of living remains about 50-60% of a cost for a similar lifestyle back in North America or in Europe. Imagine what this simple fact alone might do in terms of your long-term retirement saving targets! Forget about the great weather, the low taxes, the friendly people and the excellent banking system. They are just the gravy when you can easily live within your budget for the long term.
In Panama one can easily obtain residency as a “young professional” and start up your new enterprise in this dynamic and highly pro-business country. Such a residency leads to Panamanian citizenship after 5 years.
As an American citizen living in Panama, your first almost $90,000 of active regular salary or business income is also tax free for IRS purposes but you must live outside the USA for at least 330 days in a single calendar year. All of your other investment income and other “passive income” is still subject to American taxes. As an American citizen, global income must be reported to the IRS on an annual basis unless you choose to renunciate your American citizenship which could have other tax consequences.
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 $5.25 billion “Third Lock” canal project approved in October 2006 will open in late 2015. This expansion will accommodate cargo ships carrying 8000+ shipping containers. Panama has the second largest container transport hub in the world with major new expansion recently approved for Colon.
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 9 meg for about $35/month (2014) when combined with cable TV and telephone service.
Opening a bank account in Panama is not a simple matter such as in North America. Banks are very fussy and methodical checking out every detail of your application. The Panamanian banking system is highly 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.
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 so-called “red zones” in Panama City and Colon. Panama is unfortunately located between cocaine producing areas Colombia, Peru and Bolivia and a cocaine consuming North America.
The vast majority of homicides are committed by males in the 16 to 27 age group between the hours of 9 PM and 3 AM. Typically these people are engaged in an illegal activity of some sort in a “red zone”.
“Victimization rates” per 100,000 (e.g. rape, burglary, kidnappings, home invasions, assault etc) in Panama are LOWER than in either Canada or the USA.
As an expat/tourist you are a “target of opportunity” and you should take the same precautions, particularly at night, as you would in any major North American city. No flashy jewelry, no large wads of cash, no bragging about how rich you are, and keep a low profile when you are not in your comfort zone.
A state-of-the-art “Johns’ Hopkins” Hospital (called the Hospital Punto Pacifico) opened in downtown Panama City in 2006. This medical facility was their first “off-shore” franchise. This hospital chain, as you probably know, ranks #1 in the USA.
There are two, 5 star Joint Commission certified hospitals in Panama including the Hospital Punto Pacifico and Hospital San Fernando. This is the highest international certification available for hospitals and relatively few American hospitals have this certification.
There are also at least 4 other high quality hospitals in Panama City affiliated generally with a large American hospital chain. A triple heart bypass costs $15,000 to $20,000 in Panama City compared to about $125,000 to $150,000 in the USA or Canada (without insurance).
The Panama City skyline looks like New York “downtown” but architecturally more attractive. Panama City boasts at least six times the number of high rises of either Montreal or Miami with more than 300 significant commercial or residential “skyscrapers” (and rising rapidly) in a concentrated downtown area. There are several towers with more than 100 floors.
Construction, incidentally, remains the number one employment sector although tourism will probably overtake it shortly. The new upscale Trump Tower, for example, employed 2500 workers on site for several years. It is now completed and open for business. It offers the largest casino in Latin America not to mention very very high end shopping!
Panama has some of the best residency conditions in the world for people wishing to retire or start a new business. Under a new Executive decree, you only have to maintain a bank deposit USD$5000 plus $2000 per dependent. If you own property and/or a Panamanian business that requires your presence in panama you will meet the financial conditions. There will still need a medical check and a clean police record but unless you are a convicted felon these are relatively easy conditions.
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 pensionado visa is the easiest. The total legal costs for a couple to become “pensionados” are generally in the range of $2500 to $3000. You have to show a $1000/month pension income. This is a one-time expense and residency is forever with no restrictions on time spent in Panama. There may be a new rule which cancels your pensionado residency following an absence of two years from Panama.