Information for Tourists, Investors, Agents and Retirees Thinking About Moving to PANAMA
This information was assembled for the National Association of Realtors
by the Panamanian Real Estate & Developers Association, and appears here through the assistance of the Orlando Regional Realtor Association,
NAR’s Ambassador Association to Panama.
Click on the links below to read those sections:
U.S. citizens entering by air must present a passport valid for at least three months. Sea travelers must have a valid U.S. passport (or other original proof of U.S. citizenship, such as a certified U.S. birth certificate with a government-issued photo ID).
Travelers must either purchase a tourist card at the airport in Panama or, before traveling to Panama, obtain a multiple entry visa from a Panamanian embassy or consulate.
As of August 26, 2008, U.S. tourists are allowed to stay in Panama for 90 days. If they want to stay longer, a “change of migratory status visa” should be requested through a Panamanian lawyer before the initial 90 days passes, with an application fee of $250.00. Approval falls under the Panamanian Immigration Office’s discretion.2. Permanent Residence: Retirement Requirements & Benefits
This permit may be requested by foreigners who receive a retirement pension from their government, international organization or private company, who come to Panama with a view to residing here and have sufficient means to cover all their expenses, as well as those of their dependents. The monthly income pension can be no less than $1,000.00 US/month and must be "for life". Where the applicant can prove that they have purchased a property in their personal name in Panama for at least $100,000 US, then the pension may be for $750 US.
Requirements: In addition to the general requirements referred to in Article 28 of the Law, without the number 4, the applicant shall submit the following documents:
1. Pension Letter Certification letter of being retired or pensioned by a foreign government, international organization or private company, confirming that they receive a pension of no less than $1,000 US per month or its equivalent in foreign currency and that this is for life.
2. In the case of dependents, you must receive $250 US more in your pension.
3. Certification from the Public Registry for the property (if applicable).
If the pension or retirement is from a private company, provide the following documentation:
Note: All documents issued overseas (i.e., not issued in Panama) must be duly authenticated by the Panamanian Consulate or Embassy in the country where issued and by the Ministry of Foreign Affairs in Panama or a duly appointed agent.
Benefits of the Pensioned Visa:
Panamanian law also grants retirees a very good tax exemption package including: Tax exemption to import a car every 2 years Import tax exemption for households up to $10,000 US.
Tax freeze on property taxes.
Multiple tax exemptions and discounts on services in Panama - see Translation of Law 6 (1987), which provides the list of discounts for Pensioners and Retirees in Panama. The immigration process must be started before you leave your home country. Once you arrive in Panama as a tourist, you will be able to stay for up to 90 days. This can be extended for a further 90 days if needed. Qualifying for permanent residence for Panama retirement takes from 30 to 60 days, depending on the time of year and the availability of certain key immigration officials. With many public holidays, November and December are good months to avoid.
Work permit requirement
Foreigners planning to work for a local company must obtain a work permit from the Ministry of Labor. The government will only let you work if there are no qualified Panamanians to do a specific job. To obtain a work visa you must have a letter from a local company offering you employment stating your work specialty.
To obtain a work permit you will need a series of documents. Since the requirements are subject to change, you will have to check with an attorney to see which documents and certificates are required. Once you have obtained all of the required papers your attorney will apply for the work permit through the Ministry of Labor. He/she then has to go to the ministry Labor to apply for a Visa. When the Ministry of Labor eventually grants the work permit, the Immigration department will issue a temporary Visa for a year.
The Panamanian government wants to attract foreign investment. The following laws have been enacted to promote this end:
Law # 54: Foreign Investor Protection Law
Panama 's law 54 states that foreign investors in Panama and the businesses in which they participate have the same rights and duties as national investors and enterprises, including those that refer to the freedom of trade and industry, export and import.
Foreign investors in Panama are guaranteed the right to dispose of investment profits, the right to repatriate their capital, dividends, interest and profits produced by their investments and the right to commercialize their production.
Foreign investors are awarded a 10-year stability guarantee that all legal, tax, customs, municipal and labor rules applied to them will remain the same as those in force at the time of the investment registration.
Law # 24: Reforestation Investment Law
Reforestation in Panama is actively promoted and the Panamanian government has granted numerous incentives for foreign investors who purchase land for reforestation purposes. The benefits include a 25 year income tax exemption.
Law # 8: Tourism Investor Incentive Law
The government of Panama is actively and aggressively promoting tourism on an international basis, has passed a comprehensive law for the promotion of tourism and has declared tourism a public service industry and one of national interest.
For the purposes of this Law, a "tourist offering" is understood to mean any commercial activity for the purpose of encouraging the stay of tourists in the country and the development of domestic tourism.4. Restrictions on Property Ownership by Foreigners
Foreigners can buy properties in Panama except for islands and properties located within 10 km from the frontiers. It is advisable to buy properties that are titled rather than properties with possession rights (derecho possessorio) only.5. Laws and Rules Covering Real Estate Agency & Brokerage
NATIONAL EXECUTIVE BRANCH
Official Gazette Nº23,837, DECREE LAW Nº6 (of 8 of July 1999) "By which the profession of real estate broker is regulated and the Technical board of Real Estate is created in the Ministry of Commerce and Industries"
LAW No. 6 of 8 July 1999 DECREES (entire decree not shown) :
Denominate Real estate broker in Panama as individual person or corporation who habitually and professionally evolves as mediator, intermediary, agent, representative or commission agent between the owner of real estate property and third parties, for the effects of its sale or renting. They are excluded from this definition those owners or people who exert other activities related with real estate, such as promotion, administration, collection of renting, maintenances and similar.
To be able to exert the profession of real estate broker in the Republic of Panama it is required to have the license of real estate broker, which will be issued by the Technical board of Real Estate that is created by means of this Decree Law. For this, it will have to fulfill the following requirements and all those that are established or will be established by the Executive branch:
1. To constitute a guarantee of ten thousand dollars $10,000 US, in cash or guarantee, to be renewed annually in case of sanctions that might prevail against him for penalties or damages to third parties.
2. To pay taxes for the amount of $25 US, by the beneficiary, once the license has been approved.
3. Pass tests of necessary knowledge in matters related with real estate.
4. To fulfill any other requirements that the Executive agency establishes or adds in the future, in fulfillment of this Decree Law.
The individual person who requests a broker license will have to fulfill the following requirements:
1. To be of Panamanian nationality and domicile in the Republic of Panama, or foreigner with five years or more of residence in the Republic of Panama.
2. Certificate of its criminal and police records, which corroborates that the applicant has not been convicted of a crime against the patrimony or the civil law or against the justice administration or the honor.
3. To have proved, by means of the presentation of the respective examination before Technical board of Real estate, that has the necessary knowledge of matters indicated in article 11 of the present Decree Law.
Paragraph: Those applicants that prove to have exerted in a continuous way the profession of real estate broker during a period of no less than ten years, will be exempted of the obligation to present/display the examinations here mentioned.
Corporations who request the real estate broker license will have to fulfill the following additional requirements (and exclude No.3 above):
The use of the license of real estate broker will be indefinite since its issuance. However, the Technical board of Real estate will be able to provisionally suspend it for a term of six months, if the real estate broker does not renew the guarantee, within the term fixed on numeral 1 of the second article of this Decree Law.
If it passes the term of six months and the broker does not fulfill this requirement, the Technical board of Real estate will proceed to its cancellation.
The broker whose License is cancelled for this reason, will not be able to request it again until after a year, counted as of the date of cancellation.
The examinations that the brokers will have to be put under will be oriented to prove that the applicants have the necessary knowledge to evolve as suitable brokers, mainly on the following matters:
Prohibitions for real estate brokers:
1. From acts, in the exercise of its profession, that constitute crimes against patrimony or against the public faith or the administration of justice, or against the honor and/or any other crime whose nature has relation with the honorability, good behavior and weakness of the broker.
The commission of these crimes will entail the definitive cancellation of the license granted to the violator, which will have to be based on the pertinent condemnatory failure, properly executed and authenticated.
2. To make acts that, even though they do not constitute crimes, cause damage to its clients or to third parties or attempt against professional ethics.
In all transactions in which a real estate broker participates, the obligation of the client who hires him is to pay the prevailing commission in the market by the benefit of its services will be presumed, unless otherwise is agreed.
The real estate brokers are forced to keep the accounting registries of their activities, in accordance with the effective article 75 of the Code of commerce and other laws.
Panama's banking sector is stable and successful Panama's economy is service-based, heavily weighted toward banking, (in addition to commerce and tourism.) Panama has no central bank per se. The absence of a central bank in Panama has created a completely market-driven money supply. Panama's market has also chosen the US dollar as its de facto currency. Panama is the only country in Latin America that has not experienced a financial collapse or a currency crisis since its independence.
The banking law promoted international lending, and because Panama has a territorial tax system, profits from loans or transactions made offshore are tax free.
This, and the presence of numerous foreign banks, allows for international integration of the system. Unlike other Latin American countries, Panama has no capital controls. Therefore, when international capital floods the system, the banks lend the excess capital offshore, avoiding the common ills, imbalances, and high inflation that other countries face when receiving huge influxes of capital.
There are more than 120 banks in Panama City, making it a serious player in the international financial stage. Panama is the banking hub for much of Latin America. Money flowing in and out of the region usually passes through Panama in order to make use of its low tax corporate structure and its stable financial system of banking. Panama's banking sector is one of the most dynamic areas of the economy. As of May 2003, Panama's 77 major banks reported total deposits of $24 billion, and $33 billion in total assets, an eight percent decrease from 2002. In 2003, approximately five percent of the total credit portfolio represented loans to the public sector. Loans to the private sector in Panama reached US$11 billion, or 95 percent of total credit.
It is difficult, if not impossible for a foreigner not located in Panama to open a bank account online. One may, via the internet, go through an intermediary to open an account; but in the final analysis one has to come to Panama in order to finalize the opening of the bank account.7. Property Taxes
Article 764 of the Panamanian Tax Code indicates which properties are exempt from property tax. These properties include:
The tax basis should be understood as being the value of the land plus the improvement. Article 766 of the Tax Code goes on to establish the property tax table to be the following (values in $US):
If you have a property valued at 100,000 USD you should pay the following in property taxes:
2.10% of 100,000 USD (0.00 USD for the 0 -30,000 bracket which is tax exempt) + (349.98 USD for the 30,001 - 50,000 bracket at a rate of 1.75%) + (487.48 USD for the 50,001-75,000 bracket at a rate of 1.95%) + (524.98 USD for the 75,001 - 100,000 bracket at a rate of 2.1%) = a total of 1362.44 USD for annual property taxes
Alternative Property Tax Calculation - following Appraisal
Under the recent real estate tax amendment of 2005, the following alternative tax rate is applicable to properties whose property taxes are paid up to date and whose registered value in the public registry has been updated with a sworn declaration of the estimated value of the property, duly signed by an appraiser:
So the same property under the alternative property tax calculation would be as follows:
1.0% of 100,000 USD (0.00 USD for the 0 -30,000 bracket which is tax exempt) + (139.99 USD for the 30,001 - 50,000 bracket at a rate of .70%) + (224.99 USD for the 50,001-75,000 bracket at a rate of .90%) + (249.99 USD for the 75,001 - 100,000 bracket at a rate of 1.0%) = a total of 614.97 USD for annual property taxes
Those properties which are not paid up to in property taxes and which have not presented their estimated value in a timely manner, may not take advantage of this alternative calculation.8. Property Insurance Availability
TITLE INSURANCE IN PANAMA: Real estate has traditionally been a family’s most valuable asset. It is a form of wealth that is protected by many laws. These laws have been enacted to protect one’s ownership of real estate and the improvements located on the land. The owner, the owner’s family, and the owner’s heirs may have rights or claims in and to the property that you are buying. Those who have an interest in or lien upon the property could be governmental bodies, contractors, lenders, judgment creditors, or various other individuals or corporations.
The real estate may be sold to you without the knowledge of the party having a right or claim in and to the property. In addition, you may purchase the real estate without having any knowledge of these rights or claims. In either event, these rights or claims remain attached to the title to the property that you are buying until they are extinguished.
There is a large number of property management companies in Panama capable of managing properties in the capital or vacation properties near beaches. The best way to find them is to search on the internet for Panama property management companies and then call individual companies to find out specifically what their fees are and what areas they cover.10. Availability & Quality of Medical Care, Facilities Having
Although Panama City has some very good hospitals and clinics, medical facilities outside of the capital are limited. When making a decision regarding health insurance, Americans should consider that many foreign doctors and hospitals require payment in cash prior to providing service and that a medical evacuation to the U.S. may cost well in excess of $50,000. Uninsured travelers who require medical care overseas often face extreme difficulties, whereas travelers who have purchased overseas medical insurance have found it to be life-saving if a medical emergency occurs. Some insurance policies also include coverage for psychiatric treatment and for disposition of remains in the event of death. In Panama, most hospitals accept credit cards for hospital charges, but not for doctors' fees.
Hospital Punta Pacifica – In Panama City, it’s the only Johns Hopkins associated hospital inCentral America. This hospital is NICE! Located in Punta Pacifica, this is probably the most expensive in Panama, but if you have the money (or private insurance) it’s a great bet. Most of the doctors practicing here speak English. Walking through this hospital you get the feeling that you are in an upper end hotel as opposed to a hospital.
Clinica Hospital San Fernando- Located on Via España in Panama City, San Fernando hospital is another great choice for health care. The rooms are clean and nice and the staff is very friendly. San Fernando Hospital is affiliated with the Miami Children’s Hospital, Tulane University and Miami’s Baptist Health Center. This was Panama’s first private hospital and has a great track record and state of the art technology. San Fernando is also about to open a clinic in Coronado, a tourism and vacation hot spot on Panama’s Pacific Coast. You can easily find English speaking doctors in both locations.
Hospital Nacional- It began as primarily a women’s hospital more than 35 years ago. It is now an 80 bed facility with more than 100 specialists working out of it. At Hospital Nacional, the nurse to patient ratio is one nurse to 10 patients. The hospital is located in Bella Vista on Ave Cuba. Hospital Nacional accepts international health care plans as well as ambulatory and emergency care for US veterans.
Centro Medico Paitilla- Located in Punta Paitilla, this is one of Panama’s oldest private hospitals and a favourite among wealthy Panamanians. Expect the majority of doctors here to speak English. The hospital is probably best known for its state of the art oncology unit. The website for the hospital is under construction, so don’t expect to get too much information from it.
Most larger towns in Panama’s interior provinces also have private and public hospitals, but for the most part are smaller than the ones in Panama City and it can be difficult to find a doctor that speaks English.
Information on vaccinations and other health precautions, such as safe food and water precautions and insect bite protection, may be obtained from the Centers for Disease Control and Prevention’s (CDC) hotline for international travelers at 1-877-FYI-TRIP (1-877-394-8747) or via the CDC website. For information about outbreaks of infectious diseases abroad, consult the infectious diseases section of the World Health Organization (WHO) website. The WHO website also contains additional health information for travelers, including detailed country-specific health information.
Except for antibiotics and narcotics, most medications are available without a prescription.
The 911 call center also provides an ambulance service, however, the ambulance might not always be available and given difficulties in transiting traffic jams and poor road conditions, it might arrive too late to do much good. There are also private ambulances services people can subscribe to.
REGISTRATION / EMBASSY LOCATION: U. S. citizens living or traveling in Panama are encouraged to register with the nearest U. S. embassy or consulate at the Department of State’s travel registration page in order to obtain updated information on local travel and security. U. S. citizens without Internet access may register directly with the nearest U. S. embassy or consulate. Registration is important; it allows the State Department to assist U. S. citizens in an emergency.
Local embassy information is available below and at the Department of State’s list of embassies and consulates.
U.S. Embassy Panama
Physical location: Avenida Demetrio Basilio Lakas, Building No.783 in the Clayton section of Panama City. International mailing address: Apartado 0816-02561, Zona 5, Panama, Republic of Panama.
U.S. mailing address: U.S. Embassy Panama, 9100 Panama City Place, Washington, DC 20521-9100.
Telephone: (011) 507-207-7000 or (011) 507-207-7030
Emergency after-hours telephone: (011) 507-207-7000
Facsimile: (011) 507-207-7278 or (011) 507-207-7303
You may also send the Embassy inquiries by e-mail