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Panama - Today's Smart Expat Haven

The People of Panama
Panama Means Business
Getting Along
Living in Panama
Panama City
El Valle
Bocas del Toro

The word is out. Panama ranks high as a setting for retirement, second homes and entrepreneurship. This tiny country is extremely varied; offering rain forests, a diverse ecosystem, pristine beaches, fertile farmland, highlands with mild climate, intact indigenous cultures and a world-class capitol.

Panama is working hard to attract foreign residents and businesses. A variety of tax-advantaged programs are available for investors. For example, a tourism-related business in one of the designated tourist zones entitles you to a 15-year exemption on your income taxes. As little as $50,000 counts as an investment. Requirements for the pensionado visa are minimal. You only need to prove that you have good health, no criminal record and an income of US$1000 per month (this has just been increased from $500).

The pensionada program lets you bring in household goods without paying duties, and you can import a new car for personal use every two years. You can enjoy discounts of 15% to 50% on hotels, restaurants, movies, public transportation and many other services..Panama offers what is probably the best package of financial benefits for seniors anywhere in the world, according to an article in Smart Money.  Other publications including The New York Times have had high praise for Panama.

In most parts of Panama, unlike in most of Central America, you can drink the water and eat fresh vegetables.. Crime is low, except in the city of Colon and some parts of Panama City. New highways have been built and most older roads are routinely repaired. The currency is the U.S. dollar. Another plus is that Panama has numerous English-speaking, U.S.- trained doctors, and medical care is exceptionally good. The National Hospital has modern facilities and an international department with a trained bi-lingual staff.

The People of Panama

The population of 3 million, half of whom live in Panama City, are a mix of African, European, Arab, American, Chinese and Indian. The majority are mestizo, 14% are black, 10% white and 10% Indian. Seven Indian tribes live in Panama, and their traditional cultures are highly respected. It is, however, a highly stratified society where whites have most of the power.

With the highest per capita income in Central American, Panama has a large middle class who use cell phones, drive SUVs and live much like U.S. citizens. However, unemployment is high, with estimates ranging from 13% to 20%, and the World Bank estimates that half the population falls below the poverty level. Increasingly the poor leave the countryside for the city. Many live on the hillsides outside Panama City in shanty towns or precaristas.

Panama Means Business

Panama is also worth investigating by those interested in international business and investment. High speed internet access is widely available. Tourism investments have 20-year exemptions from import duties and income, real estate and other taxes. Over 150 international banks have offices here.

Escape from America author and entrepreneur Roger Gallo (http://www.escapeartist.com) says, "Panama offers an infinite number of ways to do business with any country in the world. Not just one country on restrictive terms." He believes that Panama may be the first "virtual nation," because of its embrace of technology.

Getting Along

Many Panamanians speak some English, but are less likely to read and write it. Knowing Spanish and something of Panama's history and culture is appreciated. Negotiations take time; relationships must be developed first. People avoid disagreeing in public, and may say "yes" when they mean "no." One problem: business people and expats find that Panamanian employees need training in the concept of service.

It's best to arrange business appointments well in advance. At social gatherings, no one is expected to arrive on time. Men shake hand upon meeting, while women may pat each other on the right forearm or shoulder, or if they know each other well, kiss each other on the cheek. At parties, one should shake hands with everyone. Appropriate gifts for a hostess would be wine, candy or something from your home area.

Living in Panama

The larger expat communities are in Panama City, El Valle in the highlands outside Panama City. Bocas del Toro on the Caribbean coast, Boquete and Volcan in the highlands in Chiriqu' Province. Whatever lifestyle you're looking for, you can find it here. You can have the big city or the serene countryside or, conceivably, both.

The country has several different climates. At sea level, it is typically tropical, i.e., hot and humid, though Panama Citys climate is tempered by sea breezes. At the higher elevations, you'll find year-round springtime and homes that don't need heat or air conditioning. The Caribbean side has more rainfall and humidity than the Pacific side. There are basically two seasons, wet (mid-April through December) and dry (January through mid-April). Panama has escaped severe earthquakes and is considered to be outside the hurricane belt.

Panama City

Roger Gallo has an apartment in Panama City and a beach house just north of there. He says, "Panama City is more modern than most American cities. It has its poor areas, but it's overall infrastructure in architectural terms is first class. It has modern freeways and excellent telecommunications." The phone system was recently privatized. You may have to wait to get a phone line, but the phones generally work.Here as elsewhere, though, cell phones are replacing landlines.

Restaurants serve all types of ethnic foods and the seafood here is excellent. Shopping is comparable to that of any large city. There's plenty of entertainment, too. The music scene includes traditional Panamanian music, salsa, jazz, reggae, merengue and rock, but out of 90 radio stations only one plays classical music. Movie theaters show American films (in English). There are nightclubs, cantinas, casinos and neighborhood hangouts.

One intriguing area is Casco Viejo, the old city, built by the French and somewhat resembling the French Quarter of New Orleans or old Havana, Cuba. Old houses here are being renovated and some have been converted into condos. Guidebooks warn about safety, however.

Another possibility is living in a high-rise. Prices range from a little over $60,000 to $1 million, depending on the location, the amenities and the view.

If Panama City bores you, you can get out of town or out of the country in a hurry. Gallo adds, "There is good surfing about three hours north of Panama City. You can visit a stone age culture about two hours south of Panama City. You can fly to any number of islands in 20 minutes or less. You can eat breakfast on the Pacific Ocean and drive to the Caribbean for a second cup of coffee in less than an hour. You can fly from here to the Dominican Republic, to Caracas, Venezuela or San Jose, Costa Rica in two hours. You can fly to Miami or to Havana, Cuba in three and to Peru in about four hours. You are literally in the center of the world."

El Valle

This resort town is in the cool highlands only 90 minutes from Panama City, and just 45 minutes from popular Pacific beaches, including Gorgona, Coronado, Santa Clara, Playa Blanca, and many others. Temperatures average about 75 degrees and humidity is low. One can see for hundreds of miles.

El Valle is in close proximity to Altos, a 3800-acre real estate development offering breathtaking views and impressive infrastructure.


One expat couple who first considered Boquete and David in Chiriqui Province, which they found to be beautiful, eventually decided they wanted to be closer to Panama City for the nightlife and the international airport. They settled on Coronado, which is less than 60 miles from the city.

Temperatures here average about 75 degrees, with very little humidity, and from some areas, it’s possible to see both oceans. There are pine trees, waterfalls and hiking trails as well as Internet connections, direct TV and a heliport. The beach is just 20 minutes away..


The westernmost province of Chiriqui is home to Volcan Baru, Panamas only volcano, which is now dormant, and is surrounded by clouds and by the forests of La Amistad National Park. Nearby are the quaint mountain towns of Volcan, Cerro Punta, and lesser-known Bambito. The high altitude and volcanic soil support some of the countrys most prosperous agriculture. The capital city is David, which is about half way between San Jose, Costa Rica, and Panama City. The village of Boquete is one of the oldest and most popular expat havens.

William Hemingway, a U.S. expat who lives in Volcan and who is not related to the famous author, writes, "It all of a sudden dawned on me that I was rapidly approaching my golden years with no firm strategy...."  As it happens, he had visited or lived in 40 different countries and had worked in Panama in marine electronics and communications for 25 years. He continues, "It's almost impossible to have your cake and eat it too. Well, living in Chiriqui is about as close as you can come."

Note: Boquete and the surrounding area is growing faster than the electrical, phone, water and road services can keep up with. Before buying a home or land, be sure to check into the availability of utilities. Also, roads in the mountain areas of Boquete and Volcancito may not be maintained adequately

Bocas del Toro

Panama’s northwest province is geographically diverse with high peaks, lowlands, rain forests and a profusion of cays and islands. It borders Costa Rica and the Caribbean, and the ambiance is typically Caribbean. The capital city, which was once the site of the headquarters of United Fruit Company, is also called Bocas del Toro, and is situated on the island having the same name. Bocas del Toro also refers to the entire archipelago or group of islands, which are connected by water taxis and supply boats.

Americans have been living here for some time. It is now a haven for retirees. And one also finds American families with children here.


For William Hemingway's article on retiring in Panama, see www.escapeartist.com/efam5/Hemingways_Hideaway.html and his own web site, www.hemingwayhideaway.com/

Also see:


The Panama Starter Kit 

Everything you need to know to realize all the advantages and upsides of living and investing in this beautiful little country at the hub of the Americas. 

Act now and save 35%!

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