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Live and Invest in Panama: Why It Might Not Be Right For You

live and invest in panama

photo by Will Travel

Here at Viva Tropical, we talk a lot about great it is to live and invest in Panama.  While we definitely do think it’s one of the best places to retire and invest in Central America, or the world for that matter, it certainly isn’t without its frustrations.

Would-be expats find a number of things to complain about once they arrive in Panama.  And many end up leaving.  Their reasons vary, but in most cases they agree that they never would have come in the first place had they known “x.”

While we don’t know what “x” is for you, we do want you to be educated on some of the things that might peeve you in Panama.

Some may seem very high-level and almost irrelevant for the day-to-day life of an expat.  But the reality remains that, when you call a country your home (particularly a developing country), things like constant changes in governmental regulations do affect you.  It can be frustrating to try and get a visa or buy property in Panama when the rules keep changing.

Multiply that by 1,000 if you plan to do business in Panama.  Imagine trying to meet deadlines and stay on schedule (and budget) when people are painfully late for meetings and contractors never show up to finish their work.

Here are a few of the biggest complaints we’ve experienced and overheard during our time here.

Practically the entire government turns over every 5 years.

Elections in Panama occur every 5 years and include both the presidential office and all 71 seats of the National Assembly.  The country’s multiple political parties work together to form a coalition government, and it’s not at all unusual to see entire administrations ousted all at once.

The personnel changes continue all the way down the line, much like when a new head football coach comes to town with his own team of assistants.  With that comes not only new faces, but completely new ways of doing things.

So, if you were in the middle of completing a project or process based on how it was supposed to be done when you started it, be prepared to start over.

While you may never see it, corruption is very real.

Corruption is often a problem in developing countries, and Panama is no exception.  The country ranked 83rd out of 174 countries in the 2012 Corruption Perceptions Index (conducted by Transparency International), with a score of 38 on a scale where 0 = “Highly Corrupt” and 100 = “Very Clean.”

In Central America, only Costa Rica fared better with a score of 54 and a rank of 48th.  (For comparison, the U.S. ranked 19th with a score of 73.)  So, while corruption does exist in Panama, it’s no more present than in other developing countries.

As far as what it looks like, it’s hard to say.  Because it’s not like it’s constantly in your face.  It could be something as high level as the government hiring less than credible contractors for infrastructure projects, to serve its own interests, all the way down to policemen being paid off to avoid issuing a traffic ticket.

The bottom line is that it’s there.  So don’t be shocked if you run into it.  But don’t make too much of a big deal out of it either.  Business gets done every day without paying bribes.

Efficiency is not Panama’s strong suit, to say the least.

It’s important to note that, on the polar opposite end of this spectrum stands the Panama Canal.  One of–if not THE ONLY–exception to this rule, the Canal runs like a well-oiled machine.

As for everything else…we’re not sure what most employee training programs in Panama emphasize, but it’s likely not punctuality, speed, or efficiency.  From the guy who comes to fix your roof to the guy behind the immigration desk, prepare to be frustrated with how things are (or aren’t) run.

Long waits and long lines are imminent, whether you’re at a public health clinic or at the water works office to pay your utility bill.  Patience is key.  Bring a book or magazine, or use the opportunity to brush up on your Spanish.

On that note, a good place to start with learning the official language of Panama is with the word “mañana.”  You may think you know what that word means.  We did before we came to Panama.  We were wrong.  “Mañana” does not, in fact, mean “tomorrow.”  It actually could be interpreted to mean a number of things.  “Next Friday,” “the week after next,” “eventually,” or even “never.”

While it’s impossible to know exactly what someone means when they tell you something will get done “mañana,” what’s important in almost every situation is to remain calm, keep your cool, and be persistent.  Use every opportunity to steadily push the ball forward.  Don’t blow a gasket and get in a frantic rush, which is the normal reaction of most North Americans.

While it has come a long way, Panama is still a developing country.

The government and economies of third-world countries lend themselves to a whole different set of uncertainties.  As a result, investing in Panama can be quite the risk, even to the most savvy investor.

Then again, what isn’t these days?

On the flip side, what some see as risk, others see as opportunity.  It really all comes down to the attitude of the individual investor.  Succeeding in this market requires the kind of outlook that says “Even if things change or something goes wrong, I will work it out.  Somehow.”

For those types, making an investment in Panamanian real estate or starting a Panamanian business can be a rewarding venture.

For those who freak out when the slightest detail doesn’t work out exactly according to plan, completing even the smallest business transaction in Panama could be a struggle.  If you’re one of those, you’ll want to carefully assess your drive and risk tolerance.

Panama is a judicial hellhole.

When it comes to Panama’s legal system, let’s start with the good news.  It’s entirely possible–well, almost possible–to avoid it entirely.

One way is by ensuring that all of your business contracts have an arbitration clause.  Since arbitration is a much better way of reaching a fair resolution, it is what’s most often used in business dealings, as opposed to judicial proceedings.

Another way is by proactively doing your due diligence in any type of transaction, business or otherwise.  Whomever coined the adage about an ounce of prevention being worth a pound of cure, was very possibly talking about the Panamanian judicial system.  Do your homework on the front end, and work with a team you can trust.

Let’s reiterate the trust part.  Just as important as the credibility of the transaction is the reliability of the people you’re working with.  Don’t assume that all professionals are legit.  Ask for recommendations from other expats or from other business people who’ve already earned your trust.

Otherwise, you could end up in court, where verdicts can range from inconsistent (at best) to corrupt (at worst).  Sadly, foreigners are often viewed as having endlessly deep pockets, and as a result the courts often rule unfairly against them.

That’s not to say that, as an expat, you’re never going to get a fair shake.  It is to say that, if you find yourself headed to a Panamanian court, you’ll need to have a good attorney to represent you and be prepared to roll with the punches.

You won’t always be able to find the exact consumer goods you’re used to.

While the same is true throughout Latin America (and most any foreign country), you’re not going to find the exact same brands or products you’re accustomed to buying in your home country.  If you do, they’re likely to cost 5% to 25% more than they would in Miami.

You might also discover that something you saw at the store one week might not be there the next time you shop.  So, if you see something you can’t live without, it’s best to snatch it up before it’s gone.  Some examples are imported name brand products and specialty items.

But, while you might not find your usual breakfast cereal with the same cartoon rabbit on it, what you will find is a comparable, or even superior replacement, at a fraction of what you would have paid in the U.S.  Also, what Panama lacks in North American brands it more than makes up for in fresh, organic produce and authentic, local goods that you could never find in the U.S.

There’s literally hardly anything you could want that you can’t get in Panama.  The trick is learning to compromise and think outside the same old cereal box with the same old cartoon rabbit.

While the weather is great, it’s not all sunshine and rainbows.

Most people who’ve lived or visited here agree that there are many parts of Panama where the weather is near perfect.  The key word here is “near.”  Panama’s climate varies greatly throughout the country and its various elevations.

So, if you like the temperate climate of Boquete, don’t assume you can move to Panama City and enjoy the same spring-like weather year-round.  Many complain about the heat and humidity in coastal areas.

Others aren’t prepared for the chilly nights in the higher elevations.  And some say there’s too much rain almost everywhere.  If you’re seriously considering relocating to Panama, it’s not a bad idea to first experience it in all seasons, of which there are only two: wet and dry.

The good news is that, with its varied topography, you can find the climate you’re looking for somewhere between the country’s borders.  It might just take a little bit of moving up and down the side of the mountain to get it just the way you like it.

But knowing is half the battle if you want to live and invest in Panama.

So, whether you’re just considering retiring to Panama, or perhaps thinking of starting up your own business venture, just know that you will not do so without your share of challenges.  They could be as simple as never being able to find your favorite blend of Indian spices or as complicated as waiting over two years to get your Panamanian visa.

As long as you have realistic expectations about what makes Panama a great place to live or invest, you’ll come out just fine.  Because, for most investors and expats,  Panama’s benefits far outweigh any negatives about the country.

Still considering Panama after what you’ve just learned?  Head over to our Panama Section and learn the Pros and Cons of living or investing in Panama.

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4 thoughts on “Live and Invest in Panama: Why It Might Not Be Right For You

  1. Richard Belforti

    Interested in investing and possibly working in Panama. Planning to retire there.

  2. 2


    Thank you for the article, very insightful. Referring to the passage:

    Also, what Panama lacks in North American brands it more than makes up for in fresh, organic produce and authentic, local goods that you could never find in the U.S.

    could you share the details of the stores (especially in and around Panama city) that sell fresh organic products.

    Thank you in advance!

  3. Marcia Barlow

    Theft is rampant, US citizens are targets, shady dealers linger at every corner,
    Once you discover the truth, it’s incredibly difficult to get your possessions back OUT of Panama.

  4. 4

    Panama is a 3rd world country with a lot of crime, bad infrastructure, traffic, noise, waiting, accidents, poverty and ghettos of the rich.
    Nothing special here. No work, difficult to start business with less than $100 000. If you plan to move here, you have to generate your income outside. The only business that works in panama ist buying and selling land and houses, which needs a lot of investment to start.
    I don’t recommend. There are far better countries for investing and living.

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