🇵🇦 Panama

Panama City is visually startling on first arrival — a dense skyline of glass towers along the Pacific, the Casco Viejo historic district, and the Canal infrastructure all within a 30-minute drive. Most urban-preferring expats settle in Punta Pacifica, San Francisco, Costa del Este, or Casco Viejo. Each has a specific feel (Punta Pacifica is high-rise coastal with international hospitals; Casco Viejo is restored colonial with a trendy food scene; Costa del Este is suburban-modern).

Boquete in the highlands is the classic expat retiree town — cool mountain climate (15-25°C year-round), large North American expat community, organized activities, and a Rotary-club-and-church social structure that some people love and others find claustrophobic. Bocas del Toro on the Caribbean side is island life with significant expat population, cheaper but with less infrastructure. Coronado, Pedasí, and Santa Fe are mid-sized expat-friendly towns along different coasts.

Panama uses a territorial tax system: income earned outside Panama is not taxed in Panama, regardless of whether or when it's remitted. That's the foundational rule. If your pension comes from the US, your Social Security check comes from the US, your dividends come from a US brokerage — Panama doesn't tax any of it.

Panama-source income is taxed progressively from 0-25%. If you're genuinely retired and not working locally, your Panamanian tax bill is typically zero or near-zero.

There's a property tax that varies by assessed value and municipality, and 7% VAT (ITBMS) on most goods and services. No wealth tax, no inheritance tax on most estates.

The US citizen caveat applies as always — US tax on worldwide income persists regardless of where you live. FEIE covers the first ~$120k/year of earned income (not investment income); FTC can offset foreign tax if any. For US retirees in Panama, the net effect is usually paying only US tax, same as if they lived in Florida.

**Pensionado Visa** is the famous one. Requires a lifetime pension of $1,000/month (+$250/month per dependent). That threshold is low by design — Panama deliberately courts retirees. Benefits extend beyond residency: 20-50% discounts on entertainment, dining, domestic flights, hotels, hospital fees, medications, and more, codified in law. Permanent residency from day one; citizenship eligibility after 5 years.

**Friendly Nations Visa** (for citizens of 50+ countries including US, Canada, UK, most of EU) was restructured in 2021. Now requires either employment with a Panamanian company, a $200k investment in Panamanian real estate or fixed deposit, or a documented professional activity. Permanent residency after 2 years; citizenship after 5.

**Qualified Investor Visa** is the fastest path: $300k+ in real estate, securities, or fixed deposit for 5 years. Permanent residency in 30 days (genuinely fast), citizenship after 5 years.

Panama's visa processing has tightened since 2022 — expect longer timelines and more documentation than 5 years ago, but still faster and more predictable than most EU routes.

Panama's private hospital system in Panama City is genuinely good. Hospital Punta Pacifica is a Johns Hopkins affiliate. Hospital Pacífica Salud is also strong. Many doctors US-trained, English-speaking, and accept US insurance for some procedures.

Outside Panama City, quality drops meaningfully. Boquete has a small private hospital and telemedicine is common. Bocas del Toro has limited facilities — serious conditions require a flight to the mainland.

Health insurance for expats 65+ ranges from $150-400/month for local Panamanian coverage (restricted to Panamanian hospitals), to $400-800/month for international expat insurance with worldwide-except-US coverage, to $1,000+ for worldwide-including-US. Pensionado discount applies to hospital bills even for uninsured — 15% off most services.

CSS (public health system) is theoretically available to residents but most expats don't use it — long waits, less comfortable, Spanish-language only.

Panama's cost index in our model is around 50 (NYC = 100), with significant range by area. Panama City's upscale neighborhoods (Punta Pacifica, Coco del Mar) are closer to 65-70; outlying towns and Boquete are closer to 40.

Rentals: $1,200-2,500/month for a good two-bedroom in Panama City's expat areas; $700-1,500 in Boquete; $500-1,200 in smaller towns. Groceries are cheaper than the US at local markets, similar to US prices at upscale supermarkets like Riba Smith and Super 99 for imported goods. Restaurants range from $5/meal at local fondas to $40-60+ at top Panama City restaurants.

Utilities are moderate. Electricity is the main cost (air conditioning in coastal areas); Boquete's climate means no AC required, which materially changes the bill.

US dollar, functionally. Panama's official currency is the balboa (PAB), pegged 1:1 to USD, but dollars circulate alongside it — you pay in dollars, you receive dollar change, the ATMs dispense dollars. No currency risk if your base is USD.

Banking requires more paperwork than in the past — Panama's banks have gotten stricter on source-of-funds documentation post-Panama Papers. Banco General, Banistmo, Multibank are the main choices. Expect 4-8 weeks to open an account with proper documentation. Wise and Revolut work alongside a Panamanian account for best flexibility.

Infrastructure beyond Panama City varies. Power cuts are not unusual in smaller towns. Internet speeds in the capital are excellent; in rural areas they're serviceable but not impressive. If you need reliable remote-work infrastructure, stay in Panama City or Boquete or Coronado.

The rainy season (May-November) is real — short intense rain most afternoons, with occasional week-long stretches of wet. Some expats love it (drumming rain, green everything). Some don't.

Crime in Panama City is low by regional standards but not zero. Specific neighborhoods (San Miguelito, some parts of Chorrillo) are higher-risk. Expats in the normal expat areas rarely experience issues. Use the common-sense precautions you'd use in any large city.

Bureaucracy is Latin American. Things take time. Permits, licenses, vehicle registration — all slower and more paper-heavy than the US or Canada. Hire a local abogado for anything significant.

1. Visit specific neighborhoods or towns, not just "Panama." Panama City, Boquete, Bocas, and Coronado are very different lifestyles. Two-to-three-week scouting trips to at least two of them before committing. 2. If you're US-retiring and have a pension, verify Pensionado eligibility with a Panamanian immigration lawyer before relying on it. The $1,000/month minimum is low but documentation is strict. 3. Test the rainy season. Visit between June and September to understand what May-November actually means. 4. Talk to the Pensionado community in Boquete or Coronado online (Facebook groups, International Living forums). Current expats will tell you the unvarnished version. 5. Factor in hurricane insurance if buying property on the Caribbean side. Panama is south of the main hurricane belt but Bocas has been brushed before.