Ivan Gillis

Panama is Ideal Destination for Expatriate Retirees

Cost of Living:  Roughly Half of the U.S. National Average

According to a poll conducted by the American Association of Retired Persons, Panama is the 4th best destination in the world for retired persons. The reasons are easy to see -- Panama offers a decent living at an affordable cost. Thus retirees can stretch their dollars a little more by migrating to Panama.  It is a safe democratic country with stable government and offers salubrious climate with low wages and taxes.

Some of the advantages of choosing Panama as a retirees' destination are:

• High quality and at the same time affordable medical facilities
• Low taxes; in fact all foreign income, capital gains, interest income are completely tax free
• Property prices are low -- about half of that prevailing in states like Florida
• Easy connectivity by air -- Panama is just a few hours away from southern parts of U.S.          
• Foreigners enjoy the same property rights as Panamanians and there is no discrimination                

Tax exemption is available for new construction.

Retirees enjoy some of the world's most beautiful beaches and other tourist attractions like adventure and eco tourism.  Language is not a problem as English is widely spoken and understood and Panamanians are a friendly people.  American expatriates can feel at home as most of the products and services available in U.S. are available in Panama as well.  It has good communication and other infrastructure facilities.   It is a safe destination.  Perhaps most importantly, the Panamanian government offers attractive incentive schemes to woo foreign retirees.  

To receive expatriate retiree benefits, Panama sets the age at 55 for women and 60 for men.  All you need is a guaranteed pension income of $500 per month ($600 for a couple). It must be a pension from a government agency (e.g. Social Security, disability, armed forces, etc.) or a defined-benefit pension from a private company. Sorry, but an immediate, fixed annuity doesn't qualify.

·         Retirees planning to settle down in Panama can bring $10,000 worth of personal effects without paying duties

·         One automobile every 2 years is allowed to be imported without taxes

• Discount of 50% of price charged for entrance to recreation and entertainment activities, such as movies, theaters, sports and other public productions.  This discount is not applicable for those events marked as benefits for the youth, homeless or those specifically authorized by the competent authorities.
• Discounts for the following means of public transportation:
1. Inter-Urban buses, 30%
2. Trains, 30%
3. Launches and boats, 30%
4. 25% discount in air fares in public and private national and foreign Airlines.
• A minimum discount of the regular prices of hotels and motels:
1. 50% from Monday to Thursday
2. 30% on Friday, Saturday and Sunday
• 25% discount of food consumed by the individual in all restaurants except for the Fondas which do not require license to operate.
• 15% discount in those rapid food establishments.
• 15% discount in the total cost for services of hospitals and private clinics.
• 10% discount in pharmacies for those medications obtained with a medical prescription.
• Discounts in the following medical services:
1. 20% in consultation fees of  general medicine doctors and medical and surgical specialists.
2. 15% for dental services.
3. 15% for optometry
• Insurance companies that include in their policies health benefits for illness shall adjust their fees to include the necessary adjustment so that the benefits of these discounts are transferred in the payment of the premiums when the insured is 55 years old if female, and 60 years old if male
• 20% discount for technical and professional services.
• 20% discount for all prosthetic devices as well as those items and accessories of personal assistance.
• 50% discount in cost of passports.
• 25% discount in monthly electrical consumption of private or public entity up to 600KW's and the normal tariffs will be applied to anything above that amount.
• 25% discount to the basic phone service charges when:
1. the phone service is in the name of the individual
2. is for a residential phone
3. is for one and only one phone.  The normal tariffs will apply for anything more.
• 25% discount in the water bill as long as:
1. the consumption does not exceed $30.00
2. by bill is in the individuals name
3. the bill is residential and is the prime residence.  The normal tariffs will apply to all other residences.

Types of Property in Panama

Foreigners can buy real estate.   Panama has three different types of property; the Titled Property, Possession Rights Property and Concession Property. The Titled Property is under the jurisdiction of the Panamanian Public Registry and the existence and value of a particular property can be verified through this channel. Titled Properties obligate the owner to pay taxes in Panama if property is worth more than $30,000. If you are currently building, you can get tax exemptions proportionate to the value of your real estate.

To purchase a Titled Property, you will be required to make a down payment, accomplish a contract as well as formalize transfer of title through appropriate certification with the Panamanian Public Registry. This will start the procedure of changing the title of the property to your name. Before all the rigmarole that all these entail, you should not forget to run a check on the property you want to buy. If the property is not registered, then you are beings scammed by the person selling you the property.

Possession Rights is ownership of property after the fact. This type of ownership is granted by the government to people who have been occupying or using part of its land for a long period of time. Thus, to qualify for buying a Possession Rights property, you must get a certification from your local officials that you are indeed staying where you say you are.

Concession Properties are properties that are owned by the government but are leased out for a long period of time such as 20 years, sometimes even 40 years. You can actually take advantage of this because governments do intend to develop locations still sparingly visited by tourists.

Do not forget to read the contract before signing on the dotted line. You should use a trustworthy Panamanian lawyer to explain the contract to you. This is because by necessity, the contract is written in Spanish.