Things to consider when relocating to Panama

Anatoly Gaviria Mar 21, 2023

Panama provides a high standard of living, favorable tax laws, a tropical climate and friendly locals. The following are some important considerations if you’re thinking about moving to Panama:

Setting Up Residency

To relocate to Panama, the first step is to apply for residency. The Pensionado Visa or the Friendly Nations Visa are the two most common choices. Anyone over the age of 18 years old who earn a lifelong pension of at least $1,000 per month are eligible for the Pensionado Visa. Citizens of 50 nations that are friendly with Panama are eligible for the Friendly Nations Visa. Candidates must demonstrate their financial soundness in one of two ways: 1) Have a written employment contract and work permit with a legitimate Panama Business. 2) Acquire a real estate asset worth at least US$200,000 (bank financing is permitted).

Renting vs. Purchasing a Home

Panama provides a range of housing choices, including condominiums, single-family homes, and apartments. Depending on your tastes and budget, you can either rent or buy real estate. It is always advisable to rent first before committing to a purchase, unless you had previously lived in Panama. Getting accustomed to a new country can be different for every person, which is why it is important to make sure that it is the right choice for you.

Establishing a Bank Account

You need to have a passport, a residency card, and evidence of address in order to create a bank account in Panama. The majority of banks want a reference from a current customer or employer in addition to a minimum deposit, which is often $500. Before opening an account, it is best to examine the reputation, services, and costs of several banks.

Selecting a Residence

The vibrant hub of Panama City and the serene beach communities of Coronado and Pedasi are just a few of the options available in Panama. While selecting a place to reside, factors to take into account include accessibility, safety, and closeness to shops, entertainment, and medical facilities. If at all possible, it is advised to visit the locations in advance or to speak with locals or expats.

Property Ownership

Foreigners can own property in Panama. Because of this, buying a house or investing in real estate in the country is a very simple process.

Income Tax Rates

In Panama, income earned outside of the country is not subject to tax because the territorial tax system only taxes income earned within the country. Companies in Panama pay a low corporate tax rate of 25%. Income taxes are not levied in Panama on employees or self-employed individuals who earn less than $11,000 USD. After deducting expenses, employees and self-employed individuals only pay a low 15% tax rate on their net income. After deducting expenses, those earning $50,000 or more pay a flat 25 percent tax rate on their net income. Note: These income tax benefits do not apply to US citizens (citizens or residents), who pay tax on their worldwide income regardless of where they live.

Safe haven for foreign investments

Real estate private ownership and private investments are protected by Article 44 of the Panamanian Constitution. Leases and commercial contracts are protected by the Civil Code of Panama, which ensures that the law is applied equally to both citizens and non-citizens. In fact, a Foreign Investor Protection Law (Law 54 of 1998) guarantees equal rights to all foreigners in all trade, industry, and importing and exporting business transactions. With the unrestricted right to commercialize their production in Panama, Panama guarantees that foreigners can dispose of their investment profits however they see fit. This includes returning investment funds and profits to other nations. Foreigners who are considering moving to Panama will find this to be a great incentive.

Cost of Living

A recent Global Cost of Living survey conducted by The Economist found that Panama’s cost of living is significantly lower than that of the United States, Europe, and the Northern Hemisphere. In Panama, one can live comfortably on between $2,000 and $3,000 per month. But naturally, it all depends on how you live your life. One of the many great reasons to move to Panama is that you can expect your overall costs to be approximately 25% lower, allowing you to live a lifestyle that is comparable to that of a medium-sized city in the United States. Additionally, keeping track of your expenditures is simple in Panama because the US dollar is the country’s official currency.


Numerous accredited hospitals and doctors make up Panama’s cutting-edge private healthcare system. If you live full-time in Panama, you must enroll in the country’s affordable and comprehensive national healthcare plan. Private hospitals, the best of which are in Panama City, provide the best care, though.

Additional Prerequisites

It is crucial to make sure you have all required documents, such as birth certificates, marriage certificates, and academic transcripts, before moving to Panama. Also, you might need to register to vote, renew your driver’s license, and get your shots. To guarantee a seamless transition to life in Panama, it is crucial to seek legal counsel from a Panama immigration attorney who is familiar with local rules and laws.

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