Your best value for offshore living/retirement

In January 2013, Kathleen Pedicord, Editor and Publisher of  "Live and Invest Overseas" chose Coronado Panama as her #1 choice for living/retiring offshore. Kathleen has been in the "offshore living" business longer than anyone I know .... approaching 30 years.

International Living also picked Panama as their #2 choice for 2013 without identifying a specific location within Panama.

The New York Times chose Panama as their #1 "best place to visit in 2012".  With the new International Rio Hato Airport opening in June 2013, the pace of development for Panama will only increase.

For the last decade, Panama has received praise from the international press as a tropical paradise in terms of weather, a low cost of living, sensible (or no) taxes, friendly people and a laid back, "manana" life style. All this in a highly entrepreneurial business environment.

Panama was the fastest growing economy in the world in 2012 at 11.6%. Panama has exceeded the growth rate of China for the past 5 years. At current growth rates, Panama will have the highest per capita income in all of Central and South America within 3 years. Only Chile, Argentina and Uruguay are currently slightly ahead of Panama in per capita income terms.

In Panama you can retire and enjoy life without the typical cash flow problems. As of 2012, the cost of living is about 40% of a similar lifestyle back in North America or in Europe. Or you can move here as a young professional and start up a new enterprise in a dynamic and highly pro-business country.

Here you can easily exceed your current standard of living up north with a mere 40% of your "back home" budget.  Imagine what that fact might do in terms of your long-term retirement saving targets!

Plan to visit "Las Bougainvilleas" in spectacular Coronado Panama at Playa Serena. Coronado was recently selected by International Living as their #3 retirement community in the world after one in Mexico and a second in Ecuador.  

                                    Playa Serena Across the street from Las Bougainvilleas

Reasons to consider Panama and staying with us at "Las Bougainvilleas" in Coronado

1. Wonderful weather year around. No snow. No hurricanes.
2. A cost of living about 40% as the same lifestyle in Canada or the USA.
3. Excellent medical care (at about 33% of the cost) at first class hospitals (including a John's Hopkins Hospital and San Fernando Hospital) with English speaking doctors. Both of these hospitals are 5 star Joint Commission Certified which is the highest international rating available.
4. Anyone can obtain low cost, adequate, health insurance with NO AGE RESTRICTIONS good for life.
5. Your policy (with San Fernando) has a two year pre-existing condition clause, a 30% co-pay and a $25,000 annual limit which is actually more than adequate for 99% of conditions.
6. Permanent residency in Panama is available under at least 5 quite different programs and new ones are being added on a frequent basis. Check out the new Executive Decree 343 from May 2012. Panama needs skilled labor and is begging talented professionals to relocate.
7. The Panama economy grew by 10.6% in 2012. Unemployment is virtualy zero. There are 60,000 unemployed people in Panama and about 120,000 job openings. Panama is not Spain or Greece.  
8. Restaurants cost about 50% less than similar restaurants in North America but there are "tourist traps" to avoid.
9. There are friendly people everywhere with many expats from North America and Europe.
10. In the crime and personal safety category, "victimization rates" per 100,000 in Panama are considerably lower than in North America although homicide rates are much higher. For example, Canada has victimization rates that are 12 times higher than Panama.
11. Excellent entrepreneurial and small business opportunities exist if you are so inclined. Many young entrepreneurs are giving Panama a very careful look and the welcome mat is definitely out. This is not France or Norway!
12. Panama has low personal and corporate rates compared to North America and Europe on money/profits earned inside Panama. Taxes on money earned offshore remain at zero.
13. Panama is one of very few countries that does NOT tax you on your world income.
14. Panama is one of the largest international banking centers in the world with very strict banking rules. Panama is no longer on the dreaded "tax haven" list so don't plan to move here to hide your money.
15. Panama uses the American dollar but calls it the "Balboa". It is indistinguishable. There are no restrictions of cash transfers but you must accurately declare all your cash assets on arrival in Panama or they may be subject to expropriation.
16. With the new "third lock" of the Panama Canal opening shortly the future of Panama remains very bright. 
17. Although property and housing prices have risen substantially over the past 5 years, this is still a good time to purchase a house or condominium on the Panamian Pacific Coast.
18. A "high end" house will cost you about $100 per square foot inside Coronado and a 10,000 square foot lot could be purchased as of early 2013 for about $100,000. 
19. Within 5 miles and 5 minutes of Coronado and all of its shopping services available to you it is possible to purchase a 10,000 square foot lot on a good paved road (with bus service) and have constructed a 2 bedroom 1200 square foot house of with sound materials for about $100,000 total. Your municipal taxes would probably be zero for at least 15 years but they keep changing the exemption laws. 

Panama Enjoys High Ratings

During the past decade Panama has been consistently selected as "the best offshore country in which to live/retire" by International Living. In 2011, "Coronado" (Panama) was selected as the third top choice after Ecuador and Mexico and just ahead of Punta del Este Uruguay (which is a "ghost town" for about 9 months of the year). Ecuador ranked very high primarily because of a very low cost of living. Italy and France were also very high on the list but very difficult residency conditions, exorbitant taxes on global income, tricky medical care insurance, and a high cost of living should give pause except for short visits and multi-millionaires. Europe remains in an economic swoon as of December 2012 with perhaps a 5-6 year recovery period still ahead according to various experts.

The Panama Tax Advantage

Panama has a "territorial tax policy" meaning that it does NOT tax your global income. Income derived from sources outside of Panama are typically "tax free".  

As an American citizen living in Panama, your first almost $90,000 of active regular salary or business income is also tax free for IRS purposes but you must live outside the USA for at least 330 days in a single calendar year. All of your other investment income and other "passive income" is still subject to American taxes. As an American citizen, global income must be reported to the IRS on an annual basis unless you choose to renunciate your American citizenship which could have other tax consequences.

As a Canadian citizen and for most Europeans, your non-Panamanian income is typically tax free without limit if you have permanent residency here and/or live outside your own country for more than 183 days in a calendar year.

The Cost of Living in Panama

One can live at the same standard in Panama on about 40% of what you would spend in North America. If one is rather careful it is possible to enjoy the same standard of living on about one-third of "up-north" costs. As of early 2013 my wife and I are able to live comfortably on about $2,000 per month without debts and with frequent restaurant outings and some vacation travel annually.

An Afternoon Dip at our Bougainvilleas Pool

The Panama Canal

The $5.25 billion "Third Lock" canal project approved in October 2006 is still on schedule for a 2014 or early 2015 completion. This new lock will accommodate cargo ships carrying 8000+ shipping containers. The World Bank funded a significant portion of the construction costs.  Panama has the second largest container transport hub in the world with major new expansion recently approved for Colon.

Panama and the Web

Four of the five major global transoceanic fiber optic companies run their lines through the Panama Canal making Panama an excellent choice for a major ecommerce internet business. Standard home ADSL internet service is available at 7 meg for about $35/month (2012) when combined with cable TV and telephone service.

Banking in Panama

Opening a simple bank account in Panama is not as simple as in North America. Banks are very methodical and check out every detail of your application. The Panamanian banking system is highly sophisticated and scrupulously applies the "know your customer" guidelines to the hilt. Panama has been removed from the OECD "black list" and complies with international standards for transparency. Tax evaders beware! 

Crime in Panama

Homicide rates per 100,000 are much higher in Panama (19) than in the USA (6) or Canada (2) however, they remain highly concentrated in several highly defined "red zones" in Panama City and Colon. Panama is unfortunately located between cocaine producing Colombia (and now Peru and Bolivia) and cocaine consuming North America.

The vast majority of homicides occur within the 16 to 27 male age group between the hours of 9 PM and 3 AM. Typically these people are engaged in an illegal activity such as drugs, money lending or prostitution in a "red zone".

More importantly, "victimization rates" per 100,000 (e.g. rape, burglary, kidnappings, home invasions, assault etc) in Panama are dramatically LOWER than in either Canada (which is 12 times higher) or the USA (about 7 times higher).   

As an expat/tourist you could become a "target of opportunity" and you should take the same precautions, particularly at night, as you would in any major North American city. No flashy jewellry, no large wads of cash, no bragging about how rich you are, and keep a low profile when you are not in your comfort zone.

Johns' Hopkins Hospital

A state-of-the-art "Johns' Hopkins" Hospital (Hospital Punto Pacifico) opened in downtown Panama City in 2006. This medical facility was their first "off-shore" franchise. This hospital chain, as you probably know, ranks #1 in the USA.

There are two, 5 star Joint Commission certified hospitals in Panama including the Hospital Punto Pacifico and Hospital San Fernando. This is the highest international certification available for hospitals and relatively few American hospitals have this certification.

My wife and I have an excellent health insurance policy with the San Fernando Hospital. They even have a first class clinic about 2 miles from our home in Coronado. The total annual cost for the two of us is about $1800.  We have a 30% co-pay, no pre-conditions after 2 years and no age limit for application. The annual expense threashold is $25,000 but has yet to be exceeded by any member according the Administrator.  

There are also at least 4 other high quality hospitals in Panama City affiliated generally with a large American hospital chain. A triple heart bypass costs $15,000 to $20,000 in Panama City compared to about $125,000 to $150,000 in the USA or Canada (without insurance).

Panama City Skyline

The Panama City skyline looks like New York "downtown" but architecturally more attractive. Panama City boasts at least six times the number of high rises of either Montreal or Miami with more than 300 significant commercial or residential "skyscrapers" (and rising rapidly) in a concentrated downtown area. There are several towers with more than 100 floors.

Construction, incidentally, is the number one employment sector. The new upscale Trump Tower employed 2500 workers on site for several years. It is now completed and open for business. It offers the largest casino in Latin America.

Panama Residency Conditions

Panama has some of the best residency conditions in the world for people wishing to retire or start a new business. Under a new Executive decree, you only have to maintain a bank deposit USD$5000 plus $2000 per dependent. If you own property and/or a Panamanian business that requires your presence in panama you will meet the financial conditions. There will still need a medical check and a clean police record but unless you are a convicted felon these are relatively easy conditions.

If you purchase a house for $300,000 you can gain residency as a "financially solvent" person. There are other several residency options including setting up a business, investing in a teak reforestation project ($80K), and investing sufficient money in a bank to provide the required pension income of $1000 per month. 

The pensionado visa is the easiest. The total legal costs for a couple to become "pensionados" are generally in the range of $2500 to $3000. You have to show a $1000/month pension income. This is a one time expense and residency is forever with no restrictions on time spent in Panama. There may be a new rule which cancels your pensionado residency following an absence of two years from Panama.

See you soon in Coronado