Living In Panama: Guide For Expats

Nestled at the crossroads of the Americas, Panama is a country unique for its position connecting the Pacific Ocean with the Caribbean Sea. For a growing number of Americans, it represents the pinnacle of accessible tropical living, a place where the dream of a sophisticated, vibrant life abroad becomes a tangible reality. 

This is a country of incredible diversity, with landscapes that range from dense tropical rainforests to pristine beaches. Living in Panama means living in a place where it’s possible to wake up on the Caribbean coast and have lunch overlooking the Pacific, as the two oceans are only a few hours apart at the country’s narrowest points.

Beyond its stunning natural beauty, Panama offers a rare combination of First-World infrastructure and a welcoming international atmosphere. Its capital, Panama City, stands as the only true First-World city in Central America, a cosmopolitan hub of finance, culture, and innovation. 

For anyone considering a new life abroad, understanding what makes this country so appealing is the first step. This guide is designed to provide a comprehensive overview of living in Panama, exploring everything from its most desirable locations and affordable healthcare to the specifics of buying property and immersing yourself in the local lifestyle.

Why Live in Panama?

Panama’s capital, Panama City is a true First-World city with modern infrastructure and easy access to North America and Europe.

The decision to move abroad is significant, but Panama presents a compelling case. The advantages that make living in Panama so rewarding are woven into the very fabric of its economy, geography, and culture, making the transition for Americans smoother than almost anywhere else in the region.

Strategic Location and Easy Travel From U.S.

Panama’s geographic position as the land bridge connecting North and South America has made it a pivotal center for global business, logistics, and travel throughout its history. For American expats, this translates into incredible convenience. The country’s Tocumen International Airport (called the “Hub of the Americas”) is a world-class facility offering nonstop flights to 94 destinations in 39 different countries with 14 airlines. This makes traveling back to the U.S. for business or family visits a simple and often layover-free experience, bridging the distance between your new home and your old one.

First-World Infrastructure 

Panama City is a testament to the country’s extraordinary economic growth over the last two decades, driven by the handover of the Panama Canal in 1999. Its skyline is the 25th biggest in the world, a clear signal of its rapid development.

Residents of the capital enjoy all the benefits of a major metropolis, including incredible nightlife, world-class international schools and hospitals, modern airports and metro systems, and upscale supermarkets and shopping malls. This advanced infrastructure provides a comfortable and convenient foundation for life, allowing you to enjoy a tropical setting without sacrificing the amenities you’re accustomed to.

Diverse Landscapes and Climate

Panama’s natural beauty is as impressive as its urban development. The country is blessed with 1,230 miles of coastline, split between the powerful surf of the Pacific and the tranquil, turquoise waters of the Caribbean. On the Pacific side, you can explore sweeping beaches like Playa Venao, perfect for surfing, while the Caribbean is home to the idyllic San Blas Islands, an untouched paradise of white-sand shores.

For those who prefer cooler temperatures, the mountain highlands of towns like Boquete and Volcán offer lush, green landscapes and abundant wildlife. These areas offer a host of activities, including hiking, birdwatching, kayaking, river rafting, and golf.

Affordable, High-Quality Lifestyle

Perhaps one of the most attractive qualities of living in Panama is the incredible value it offers. Here, your real estate dollar gets you more bang for your buck, allowing you to acquire a luxury beachside condo or a sophisticated city apartment for less than you would expect to pay in a modern, thriving, tropical country. This affordability extends to daily life, where you can enjoy a first-class lifestyle, from dining in gourmet restaurants to attending cultural festivals,without breaking the bank.

Welcoming Environment for Americans

The transition to living in Panama is made significantly easier by two key factors that enhance convenience for real estate investing and living in the country. The official currency is the U.S. dollar, which completely eliminates currency exchange hassles and simplifies all financial matters. Furthermore, English is widely spoken in Panama City and in expat communities across the country, making it easy to navigate daily life, conduct business, and build a social circle.

Popular Locations for Expats Living in Panama

While foreigners have settled in nearly every corner of this beautiful country, a few key regions have emerged as magnets for the expat community, each offering a unique lifestyle and appeal.

Panama City

Panama City is a dynamic metropolis of 1.5 million people, a place where shimmering glass towers overlook the Bay of Panama and colonial history lives on in the charming streets of its historic district, Casco Viejo. As a major international hub for commerce and banking, the city attracts professionals from all over the world. 

One of its most sought-after neighborhoods is Costa del Este. Just three decades ago, this area was nothing more than wetlands and a municipal dump; today, it is a 766-acre masterpiece of urban planning. Designed to be the centerpiece of a modern, global Panama, it is where you’ll find the regional headquarters of multinational corporations, prestigious international schools, and a state-of-the-art Johns Hopkins-affiliated hospital.

The Pacific Riviera

The most developed and accessible stretch of coastline in Panama is the Pacific Riviera, an approximately 50-mile span of beach communities running west of the capital between Chame and Farallon. 

The anchor of this region is Coronado, a town established in the 1940s that has since grown into a bustling hub with a large expat community, a premium golf course, supermarkets, and schools. 

A rising star in the area is a location in the Chame district known as Playa Caracol. For years, this pristine stretch of beach remained undeveloped due to a lack of access and restrictive land zoning. However, a “Path of Progress” initiative, including a new paved road and billions of dollars in government infrastructure spending, has unlocked its potential and is making it a premier destination. (A path of progress is anything is anything that makes a place easier to get to, like new roads, airports, or bridges, or more desirable, say, a 5-star resort in a place that previously only had cheap hostels). 

Boquete

Nestled high in the fertile Chiriquí province of western Panama lies the district of Boquete, a serene haven that has become synonymous with expat retirement. Home to just over 23,000 people, this region’s allure comes from its breathtaking mountain vistas and a cool, spring-like climate that offers a refreshing escape from the coastal heat. 

The elevation and weather make it an ideal setting for an active, outdoorsy population, with 20% of residents being expats. Boquete is also known for its vibrant arts scene and a focus on wellness. While it feels a world away, it is conveniently located just 40 minutes from David, Panama’s third-largest city, which serves as the region’s commercial hub with top-rated private hospitals and all necessary services.

Pedasí

For those dreaming of a more rural and traditional beach town lifestyle, Pedasí, located at the tip of the Azuero Peninsula, is a treasured jewel. The town itself is quaint and unassuming, with a picturesque downtown surrounded by green pastures. A five-minute drive brings you to three spectacular and largely undeveloped Pacific beaches. The local economy is driven by fishing, and the waters here are so abundant that the area is known as the “Tuna Coast” of Panama, making sport fishing a major pastime. As more expats discover its laidback charm, new shops and restaurants are beginning to appear. Not far from Pedasí is Playa Venao, one of the country’s best surfing beaches.

The Cost of Living in Panama

A major draw for expats considering living in Panama is the affordable cost of living, which allows for a high quality of life without the financial pressures common in the U.S. While costs can vary significantly depending on your lifestyle and location, with Panama City being the most expensive, many find that their monthly budget stretches much further here.

Housing and Utilities

Housing, whether you are buying or renting, offers incredible value. Your real estate dollar gets you more bang for your buck in Panama. While specific utility costs vary, the overall financial environment allows for a comfortable, even luxurious, lifestyle without breaking the bank.

Pensionado Discounts

The most significant and tangible savings for many expats come from Panama’s world-famous Pensionado Program. This program for resident retirees provides a legally mandated series of discounts that dramatically reduce everyday expenses. 

These benefits include 50% off entertainment like movies and sporting events, 30% off bus, boat, and train fares, 25% off both domestic and some international airline tickets, 20% off medication, and at least 10% off healthcare costs. These regular savings on transportation, healthcare, and leisure activities make a comfortable retirement lifestyle in Panama even more attainable.

These benefits include:

• 10% or more off healthcare costs.
• 50% off entertainment
• 30% off bus, boat, and train fares
• 25% off domestic airline tickets as well as some international tickets.
• 20% off medication

Healthcare in Panama

One of the most critical considerations for anyone planning on living in Panama is healthcare, and this is an area where the country truly excels. You can find high-quality care available at a fraction of what it would cost in the U.S. Clinics and hospitals are strategically located in hubs across the country, and since Panama is so small, you are unlikely to be more than an hour from a modern facility, no matter where you choose to live. It is also not unusual to find English-speaking doctors, as many study abroad after finishing their required training in Panama.

Panama City is known throughout Latin America for its excellent clinics and hospitals. The compact, cosmopolitan capital is home to many advanced facilities, including the Johns Hopkins International-affiliated Hospital Punta Pacifica, which is known as one of the most technologically advanced medical centers in the region. 

Other facilities, like the San Fernando Hospital in Panama City, have obtained a JCI gold-star rating, highlighting the country’s high standards. This quality is not limited to the capital; regional hub towns like David and Chitré have hospitals and medical centers that serve the expat havens of Boquete and Pedasí, respectively. Many expats have reported receiving more personalized care in Panama than they did back home. 

Private health insurance available to expats is also generally much cheaper than in the U.S., in part because doctor’s fees and hospital visits are inexpensive.

Access to medication is also convenient and affordable. Pharmacies in Panama are plentiful and can be found in hospitals and even in supermarket chains like Riba Smith and El Rey. Prices for prescription drugs can be low, as many are priced for the local market, and some drugs that require a prescription in the U.S. are available over the counter in Panama.

In addition to the private system, Panama also has government-run public healthcare systems designed to provide affordable care to its residents. The Caja de Seguro Social, or CSS, system is for those who have paid into the Social Security Fund through their payroll in Panama. Other expats can visit facilities run by the Ministerio de Salud, known as MINSA. These facilities are quite basic, often with long wait times, limited care options, and sometimes outdated equipment.

The best MINSA facilities are generally located in the larger cities, especially the capital. For this reason, many expats choose to use a mix of public and private healthcare, with a strong emphasis on using private facilities and providers for most of their needs.

Buying Real Estate in Panama

Panama’s government actively welcomes foreign property buyers, giving them almost the same rights as Panamanian citizens, with a few exceptions. The process is transparent and secure, but it’s essential to follow the correct steps with the help of a qualified local attorney to ensure a safe investment.

The Property Buying Process

Purchasing property in Panama is a multi-step process. The first step is to agree on a price; it is advisable to talk with local real estate agents and check websites like www.encuentra24.com to get an idea of current market values, and there is usually wiggle room in the asking price for negotiation. 

Once a price is set, your attorney should check the public registry to make sure the property you’re buying has a good, clean title and that the registered owner is the person selling you the property. It is vital to ensure you are purchasing titled, or “fee simple,” property, which is the most secure form of ownership, and to avoid untitled land known as “possession rights,” or derecho posesorio.

After the title is verified, you and the seller will sign a promise to buy/sell agreement, which lays out the terms of the sale and typically requires a deposit. For the final transfer, the safest way to handle payment is to use an irrevocable letter of payment from a Panamanian bank. This is a standard and secure practice where the bank holds your funds and only releases them to the seller once the title has been officially transferred into your name; you should never pay the seller directly. 

The final contract is then drawn up as a public deed and signed by all parties in the presence of a notary. The last step is to record your purchase at the Public Registry and have a copy of the deed filed with the tax records department to complete the transfer.

Restrictions and Key Considerations

There are some restrictions on foreign ownership of property. Under the constitution, foreign ownership of property within 10 kilometers, or 6.2 miles, of an international border is forbidden. Additionally, by law, all beachfront properties must provide a public right of way so the public can walk along the beach. It is also important to note that a good portion of the country lies in comarcas, or indigenous reserves, which are independent sovereign states where you should not attempt to buy property.

Property Taxes in Panama

Panama’s property tax rates are among the lowest in the region. Family or primary residences are tax-free if valued at $120,000 or less, with rates from 0.5% to 0.7% on values above that. For other properties like vacant lots or vacation homes, they are tax-free if valued at $30,000 or less, with rates from 0.6% to 1% on higher values. The real estate transfer tax is paid by the seller and is 2% of either the updated registered value of the property or the sale price, whichever is higher.

For a comprehensive look at the property market, sign up for our free Real Estate Buyer’s Guide to Panama.

Visas and Residency for Living in Panama

Panama has designed one of the world’s most appealing and straightforward residency programs for foreigners, particularly retirees. For Americans just wanting to explore, a standard passport allows for a 180-day stay without a visa, making it easy to see the country firsthand. For those planning a permanent move, several attractive options are available that can lead to long-term and even permanent residency.

The most famous of these is the Pensionado Program, or retiree visa, which grants immediate permanent residency. To qualify, an individual must prove a lifetime pension of at least $1,000 per month. This financial requirement drops to $750 per month if you purchase Panamanian real estate valued at $100,000 or more. 

Another popular route is the Friendly Nations Visa, available to citizens of over 50 countries that Panama deems “friendly,” including the U.S. and Canada. This visa grants long-term residency to individuals who establish economic or professional ties to Panama, which can be achieved through employment or the purchase of real estate. For high-net-worth individuals, the Qualified Investor Program provides a fast track to immediate permanent residency with a minimum real estate investment of $500,000.

Types of Panama Visa 

Temporary Visas

Like neighboring Costa Rica, Panama has introduced a 180-day visa waiver for tourists. This applies to most European and Latin American countries as well as the U.S. and Canada. You’ll need your passport, proof of return ticket or onward journey, and proof of sufficient funds.

The short-stay visa for remote workers is for people who can work remotely for employers or clients outside Panama. You must have a minimum monthly income of $3,000 or $4,000 if you have dependents. You’ll need to prove your employment and income. The visa lasts for nine months and can be renewed once.

Long-Term Visas

Panama is unusual in that its most popular program, the pensionado visa, grants immediate permanent residency. But there are other ways to get long term residency, all of which can lead to permanent residency.

Friendly Nations Visa

Citizens of over 50 countries deemed “friendly” by Panama, including the U.S., Canada, most EU countries, and more, can acquire long-term residency rights by showing proof of economic or professional ties to Panama. This can either be through employment, business, or purchase of real estate. This initially grants temporary residency, which can lead to permanent residency after two years.

Business Investor Visa

Entrepreneurs interested in starting or investing in a business in Panama who put in at least $160,000 and create at least five full-time jobs can get this permit. It’s temporary, but it can lead to permanent residency after two years.

Residency In Panama

There are three main routes to immediate permanent residency in Panama.

Pensionado Program

Retirees or pensioners with a lifetime pension of at least $1,000 per month qualify. If you purchase real estate in the country valued at $100,000 or more, this requirement drops to $750. The visa includes all sorts of discounts and perks, including healthcare, restaurants, transportation, and tourism.

Self-Economic Solvency Visa

Individuals with sufficient personal wealth who are prepared to deposit $300,000 in a Panamanian bank for three years, or buy Panamanian real estate worth $300,000, or a combination of the two, can get immediate permanent residency.

Qualified Investor Program

Individuals investing at least $500,000 in Panamanian real estate or $160,000 in a Panamanian business get immediate permanent residency.

Citizenship

Foreign residents of Panama can apply for citizenship after five years of continuous permanent residency. During this period, you must have lived inside the country, with “minimal time” spent outside. The law does not clearly define this.

You must also show good proficiency in Spanish and have a good understanding of Panamanian history, culture, and government. Finally, you’ll have to show that you’ve established sufficient links in Panama, paid your taxes, and generally been a good resident.

Practical Steps for Relocating to Panama

While the prospect of living in Panama is exciting, a successful move requires planning. Here are some practical steps to guide your journey.

Step 1: Research and Visit

The first step is thorough research. While guides like this provide a great overview, a personal visit is essential. Spending time in the different regions, from the bustling capital to the quiet mountain towns, will help you find the community that best fits your lifestyle. A tourist visa allows for a 180-day stay, giving you ample time to explore.

Step 2: Consult with Professionals

Before making any major decisions, consult with a qualified Panamanian attorney who specializes in immigration and real estate. They can provide invaluable guidance on the visa process that best suits your situation and ensure any property purchase is secure and properly titled. Real estate agents in Panama must be licensed by law, so ensure you check that any agent you use has a valid license.

Step 3: Plan Your Finances

While Panama uses the U.S. dollar, it’s important to set up your financial affairs. Understand that obtaining a mortgage as a foreigner can be difficult, as you do not have a credit history in the country and banks are very strict. You may need to plan for a cash purchase or seek developer financing for pre-construction projects, which is sometimes available.

Step 4: Secure Your Visa

Once you’ve chosen your path, your attorney can help you gather the necessary documents for your residency application. Common requirements include a valid passport, a recent criminal background check from your home country, and proof of financial means. The processing time can range from a few weeks to several months depending on the visa type.

Lifestyle and Culture in Panama

Adjusting to a new culture is part of the adventure of moving abroad. Life in Panama is generally safe and secure, with a relaxed pace that can be a welcome change for many Americans. Panamanians as a rule do not like confrontation, and while crime exists as it does anywhere, it is usually petty theft. Racially and politically motivated crime and random shootings are not a concern in Panama. Here are a few insider tips to help you acclimate.

Understand the Climate

Panama’s weather is predictable because the country lies outside the hurricane belt. The dry season starts in December and lasts until April, a time when rain is mostly non-existent. Days are usually cloudless with warmer temperatures, averaging 90 F to 95 F, with nighttime temperatures dipping to 75 F. The rainy season typically begins in May with sporadic afternoon and evening showers. As the season progresses, the rain increases in duration, with daytime temperatures about 10 to 15 degrees cooler than the dry season, though the humidity is much higher.

Embrace the “Mañana Principle”

This is one of the most important cultural concepts for new expats to understand. The definition for the mañana principle is, “when they say tomorrow, it just means not today.” This attitude can be one of the most frustrating things for expats to get used to until they have acclimated to a slower lifestyle. It is best to take a deep breath and lower your blood pressure; it will get done, but just not today.

“Work to Live, Don’t Live to Work”

This popular motto in Panama captures the local spirit. This translates into frequent parties and social gatherings that can go into the early hours of the morning. While this might be an adjustment, becoming part of the group and going with the flow will find you enjoying social time with your Panamanian neighbors.

Currency

In Panama, the U.S. dollar is the official currency along with the Panamanian Balboa. The Balboa is pegged to the dollar at a rate of 1:1, and you will often see prices listed with a B/. symbol instead of a “$” symbol. While Panama does mint its own coins, which are the same dimensions as U.S. coins, all paper bills used in the country are U.S. dollars.

Living In Panama:
Our Thoughts

Panama offers a complete package for the modern expat: a thriving, sophisticated capital city, world-class infrastructure, stunning natural beauty, and a secure, affordable lifestyle. Its welcoming residency programs and the use of the U.S. dollar make the practical aspects of living in Panama remarkably simple. 

Whether you are seeking a dynamic urban experience, a tranquil mountain retreat, or a sun-drenched life on the beach, Panama provides a stable and prosperous platform from which to build your dream life abroad.

More Panama Resources

Retiring In Panama
Living In Panama
Panama’s Hidden Riviera