With increasing disposable income, it is not uncommon for people desiring to have an alternate home outside of their own country. It is especially true among wealthy Americans and some Europeans and Panama offers a good destination for them. It has salubrious climate and a hilly terrain that provides breathtaking views of the sea and the beaches. The cost of living in Panama is relatively low compared to U.S. and Europe and Panama has a history of low inflation. The real estate prices are affordable. One can buy a 2500 sq m house in the city of Boquete in a good location for just $50,000. The land prices vary from $8 to $20 per sq m depending on location. Panama City is slightly more expensive, where a 3 bedroom apartment may cost $90,000. Agricultural land near Panama City costs $500 to $900 per acre.
Panama has a low tax rate regime and a business friendly government. Foreign earned income, capital gains, and interest income are all tax free. It is an ideal destination for retirees. English language is widely spoken and understood which makes it easy for U.S. visitors to settle down. Panama has a stable democratic government. Property owners from abroad have the same rights as Panamanians.
Panama has been voted as the best place to live outside of U.S. by 'International Living' magazine. Boquete town in Panama has been ranked 4th by American Association of Retired Persons among 15 best cities in the world for retired persons. Some of the reasons for moving to Panama are listed below.
* Relocation to a safe and economical democratic country * Panama is tax friendly with no capital gains tax, tax free interest income and no tax on income earned abroad. * It is easy to start a business in Panama as there are no complex rules and formalities to be completed * Real estate prices are reasonable compared to that in U.S. or Europe * It has a good legal system in place with courts that will not entertain frivolous law suits and protect foreigners' assets.
Type of Visas
Retiree and Investors visas are 2 common ways of migrating to Panama. Retiree visas are issued to persons receiving at least $500 pension per month or $600 for couples. The visa can be extended indefinitely but it does not grant Panamanian citizenship. Some of the benefits granted to holders of retiree visas include one time tax exempt import of up to $10,000 worth of personal effects and import of automobile once in 2 years with no duties.
Investor visas are issued to persons who can invest at least $100,000 in Panama and employ 3 locals. It is initially issued temporarily for one year and permanently after renewal. Panamanian citizenship is granted to persons holding permanent visa for 5 years.
Other than the above there are also small business visas, persons of means visa, agricultural investor visa, private income retiree visa etc. Smythe Bradley is an expat living in The Republic of Panama. He has published many articles on offshore asset protection in panama, panama visas and residency, as well as many other expat issues.
