This is the million dollar question – and although there may not be a million answers there are a lot of very good reasons to live in Panama.
Panama is the only country that seems to have it all – warm weather all year round, mountains, beaches, a cosmopolitan capital, a stable government, a huge number of benefits for retirees, low cost of living, extremely low crime (lowest crime rate in Latin America), great food (not good, great), very good internet at USA prices, good phone system, good cell phone coverage, cable and satellite TV, friendly people, a large percentage of people who speak English, great affordable health care, the possibility of buying anything you can buy in the USA probably for the same price or less (many consumer goods at a fraction of the US prices) whilst being only 2.5 hours by plane to Miami etc. etc. There are just a few of the reasons why 50,000 Americans live here already and more are on the way.
Video of Panama
For even more reasons read on………
Panama has a Strong Economy
Panama has its own currency, the Balboa. It uses a coin system similar to US quarters, dimes, nickels, and pennies as well as actual US dollars for their paper money. The advantages to this are huge. Panama does not have a Federal Reserve Bank that loans money to the government (at a price) whilst the government prints money which is why is manages to spare the people a massive interest debt to the reserve banks for the taxpayers to pay off. This is the case in the USA, UK, most of EU etc. This means Panama doesn’t have the unnecessary overhead of supporting bankers which in turn translates into a lower cost of living for anyone living there. Just knowing this makes you feel good!
As well as income from tourism, banking and trade Panama earns an annual income of one billion dollars from the Panama Canal as ships pay to pass through. Imagine that much money spread amongst 3.3 million people. It is significant. The GNP will increase as the Panama Canal expands its capacity. For more on this go to
No Military in Panama
Panama has no standing military. Why?
The people felt that the military was being used to suppress them not defend against invading armies so they got rid of it. This relieves the country of an enormous tax burden supporting a military that spends money like water. This again filters down to the people in that less tax is required from the population unlike in the USA, Canada and the EU.
No Taxation on Income from Abroad
Panama does not tax offshore income. If you have a pension, social security, investment derived income etc. it is all tax free in Panama. Imagine that! Your home country like the USA may still tax you but that has nothing to do with Panama. To incur Panama income taxes you would actually have to open a business in Panama and sell to Panamanians.
You can be in Panama living here as a tourist, resident, Pensionado (a retiree), or citizen operating a Panama corporation that has customers out of Panama, maintains an office in Panama, banks in Panama and still not have any Panama income tax liability.
Panama does not need to tax its citizens to death. They do not penalize business activities like other parts of the world. They are not lawsuit-happy prone either. They are pro-business that is why – what a concept huh?? For instance you can get a 20 year property tax exemption from buying a house as a Pensionado. Even if you decide to have a company operating within Panama the taxes are not prohibitive.
For more on Business Incentives Click here
You can get a 20 year tax exemption on a business that promotes tourism, like a Diving Business or a Bed and Breakfast, and this exemption extends to income taxes and can also cover things like the taxes on the company car, fax machine etc. All this is going on while your old country is doing all it possibly can to make staying in business harder and harder while bankruptcies rise along with unemployment.
For more on Setting up a Business in Panama click here.
For those of you from the USA you can actually get an income tax exemption from the IRS to the tune of $80,000 a year per person if you legally live outside of the USA for 11 months out of the year plus extra exemptions for living expenses.
Panama Ranks 48 In List Of Most Peaceful Countries
In 2008 Panama was listed 48th Most Peaceful Country in the Global Peace Index released by Britain’s Economist Intelligence Unit – putting Panama one spot ahead of the United Kingdom. The index ranks 140 different countries according to factors such as military spending and respect for human rights. Iceland and Denmark took the top spots in the rankings this year,beating the United States by an incredibly large margin, which had a ranking of 97.
Panama’s higher ranking likely reflects the small nations relatively low crime rate and lack of a military force.
Great Benefits for Retirees
A Pension ado visa means you are retired with some sort of income. This visa entitles you to all sorts of amazing discounts like 10% on a mortgage, airfare, movies, etc…
For more on Retirement Benefits click here
Cheap Cars & Your Own Driver
There are very small new cars you can buy here for $7,000. Used cars are very popular here since repair labor is much less than in North America and used car prices are quite low. You can get a driver for $200 a month and a good used car for $5000 and up. There are a lot of Japanese cars in Panama, some BMW’s, few Mercedes and Porsche, lots of Japanese SUV’s mostly diesel. If you live in Panama City it is probably cheaper and easier to take taxis than to have a car (taxis are cheap here usually $1.25 to $3.00 for a twenty minute or so ride). Gas is also really cheap if you are coming from Europe.
Housing costs are not as cheap as they used to be. In fact in Panama City itself they are pretty expensive. House prices have shot up in recent years as more and more ex-pats discover the advantages of life in Panama.
Most foreigners are buying homes for an average price of $160,000 taking into account many live in more rural areas of Panama. Panama City houses run about $1000m2 (a m2 is slightly over 10 ft2) and sometimes much more depending on the location. As long as someone can sell their current residence for more than the cost of their new Panama home they will keep coming. Many newcomers to Panama are getting $300,000+ for their US or European properties – cashing in before the bottom falls completely out of the market and then buying in Panama keeping some ‘holiday’ funds in the bank.
Not just Americans but many Europeans are coming to Panama for investment – to take advantage of the high Euro. Since Panama real estate is priced in dollars it is like getting a 20% discount for the Euro buyer. They feel that should the Euro fall in value then they could sell their real estate in Panama (priced in US dollars) – and convert back to Euros, post sale, buying more Euros than ever before.
Most apartments and houses have maids’ quarters. They are usually the size of a large walk-in closet with a full toilet attached and not air conditioned. A maid will run about $200-$250 a month plus benefits of about $27 a month. The maid works 6 days a week, off Sunday (is this why so many people eat out on Sundays). The maid will cook, clean, do laundry and even shop for groceries. She may or may not iron – this is a sore point with maids for some reason!
Maids will also serve as babysitters but many people have an additional nanny. You can also hire a driver for about same money if you let him live in. Some may elect to have a live in driver and have a day maid. Most dwellings only have accommodation for one servant to live in. A driver drives you to restaurants and then when ready to leave you call him on cell phone and he comes to pick you up in front, same for going to mall, movies, bank etc. He will also help with errands and around the house.
A cosmetologist will come to your house and do your nails for $10 or so and a masseur/masseuse will make a house call and give you a one hour massage for $15 or so.
A Higher Standard of Living for Less Money
If you live in an expensive part of the world you will probably have an equivalent lifestyle for here for at least 60% less ($8000 month lifestyle for $3200). If you live in a cheaper region you will probably save at least 35% moving here. To be retired comfortably in Panama City you currently need $2000 a month for a couple – this would get you a nice 2 bedroom apt with a view, balcony, security, pool, a live in maid, utilities, phone, internet, taxis, groceries, medical insurance, necessities and occasional nights out. Beat that!!!! If you buy your own house you could do nicely on $1000 a month. Living outside the city in Bocas, Boquete or less popular places you could live well for far less.
If you budget $4000 a month to live on in Panama City your lifestyle would take at least $12,000 to match in Miami Beach and probably $20,000 in New York City but you’d eat healthier, be safer, have better medical care, experience no cold weather and be happier.