If you’re a would-be expat who has your sights set on an island destination, then it’s likely Roatan, Honduras, has found its way onto your radar. It’s relatively inexpensive, yet offers a well-developed tourist infrastructure.
And, hey, if some of the globe’s top cruise lines have added Roatan to their list of stops, then surely there must be something there worth seeing, right?
Roatan is great, and its recent spike in popularity has certainly been warranted. But just in case you’re looking for a little less tourist traps and a little more authentic island atmosphere, let’s see how it stacks up against Boca Chica, Panama.
Viva Tropical
Round #1: Accessibility
Winner: It’s a Tie
Thanks to recent and coming improvements in both countries’ transportation options, you’ll find both of these islands incredibly easy to get to. Roatan, Honduras, is now accessible via direct flights from several major U.S. cities, such as Houston, Miami, and Atlanta.
You can basically hop on a plane and be there in as little as 2 hours. Not too shabby. This is a drastic difference from a few years ago when the only way to get to the island was via a ferry to the island or a separate domestic flight from the mainland.
Similar improvements are soon to come to fruition in Boca Chica as well. While Panama is also already accessible by way of a short international flight, Panama City has historically been the only option for arrivals.
That’s about to change when David’s Enrique Malek International Airport opens its runways to flights from the U.S. and other nations for the first time. Once you land, it’s only a 30 minute drive and a 10 minute boat ride and you’re on an island archipelago that feels more like you’re hours from civilization.
So, while Roatan is a slightly quicker trip (for now, anyway), Boca Chica stomps its Honduran counterpart in terms of access to other nearby destinations. If you need something that you can’t get on the island, you have to take a 90 minute ferry ride to the mainland.
Boca Chica’s islands require only a quick trip in a motorboat. Once on land, there are a ton of options for everything from shopping and dining to getting your boat repaired or picking up your dry cleaning. You can also explore nearby places like Boquete, Volcan Baru, and other popular tourist attractions in the Chiriqui province.
Round #2: Consumer Goods and Services
Advantage: Boca Chica
Speaking of dry cleaning and repair shops, that’s another area where Boca Chica wins out over Roatan. In Roatan you’re pretty much limited to the options available on the island. Most consumer offerings are located on the west end in places like Coxen Hole and French Harbour.
The options are decent, but the prices reflect the fact that they’ve had to be shipped over from the mainland. Plus if the island doesn’t have what you need, then back on the ferry you go.
From Boca Chica island, you can motor over to the mainland where the town of Boca Chica has enough to meet your basic needs. However, if you’re seeking something a little less common all you have to do is drive the half hour to David which is guaranteed to have what you’re looking for.
It’s so convenient that it wouldn’t be unheard of for someone to spend their day out exploring deserted islands in the archipelago, then shower, change, and head into David for a world-class steak dinner. In the city you’ll also find hardware stores, modern hospitals, government offices, and even a Mailboxes Etc.
James Willmore
Round #3: Investment Potential
Winner: Boca Chica By a Large Margin
The fact that you’re at least somewhat familiar with Roatan, Honduras, but may have never even so much as heard of Boca Chica, Panama, should be your first clue as to which has the greatest potential for appreciation.
Roatan is a well-developed tourist destination that’s been drawing international attention for a while. Boca Chica Island is a hidden gem. The mainland town of Boca Chica attracts a few tourists, mainly because of its popularity as a sport fishing mecca. But most of the islands of its archipelago are virtually untouched.
Roatan has a fair share of real estate that’s a little further off the beaten path as well, but its prices still reflect the level of development available on the island itself. Boca Chica, on the other hand, offers the same (if not better) gorgeous scenery and opportunities for adventure and exploration. But at rock-bottom prices.
Not to mention, that airport expansion we mentioned is about to cause the entire Chiriqui province, including Boca Chica, to explode. More and more travelers from all over the globe will begin visiting the area. Infrastructure will continue to improve. New businesses will open. And the result will be a tremendous spike in property values.
These projections are huge for investors.
Round #4: Atmosphere
Outcome: It Depends
Both Roatan and Boca Chica are great destinations with a really cool laid-back vibe. They also both have a good bit of variety if you’re willing to move around a bit. But each excels in a particular genre the other lacks.
In the more populated areas of Roatan you’ll find your typical Caribbean atmosphere. There are your usual tourist developments and hotels within walking distance of bars and restaurants that offer a vibrant night life.
Boca Chica doesn’t have that. There are good times to be had in Boca Chica, but they generally come in a more low-key format, like a relaxed happy hour spent on a restaurant patio.
By contrast, Boca Chica offers opportunities for complete solitude that would make even Robinson Crusoe drool. You can relax in a hammock on your private patio with nothing but your thoughts and a few howler monkeys to keep you company. Roatan has a few more secluded spots too, but they don’t compare.
Viva Tropical
Round #5: Tourist Infrastructure
Advantage: Roatan by a Landslide
Whereas Roatan has all the activities and tourist offerings you’d expect of any world-class vacation spot, Boca Chica’s options are drastically skewed towards one genre: aquatic adventures. It’s a great jumping-off spot for deep sea fishing, sailing, and other seafaring activities. For much more than that, you’ll need to venture to one of the other destinations in the province.
Roatan has a variety of options for dining, lodging, and other amenities. It’s a well-developed tourist hotspot. But that also has its drawbacks. Like the hordes of cruise ship passengers that crowd the beaches every few days or so.
It’s important to note though that Boca Chica’s relative lack of tourist offerings represents another great area that’s primed for growth. As the number of visitors to the area increase, there will be tremendous potential for entrepreneurs looking to profit by opening attractions like yoga retreats and sport fishing operations.
Michael McDonough
Round #6: Host Country
Advantage: Easily Panama
Outside of Roatan, there just aren’t a lot of expats flocking to Honduras. With the world’s #1 highest intentional homicide rate (82 of every 100,000 deaths), to say the country has a crime problem is a gross understatement.
Likewise its education system is fair, and its infrastructure is well below average for the region. You can’t drink the water, and many cities have inadequate wastewater treatment systems. Health care is also subpar, with only 57 physicians per 100,000 people.
Contrast this with Panama, whose infrastructure rivals that of first-world countries in some of the larger cities. It has good roads, reliable public transit, and some of the best internet and cellular access in all of Latin America.
There are a number of established expat communities where large numbers of English-speaking immigrants have more than paved the way for newcomers. There’s also Panama City, a bustling cosmopolitan city that many compare to Miami.
Panama’s schools are good. Its healthcare is great. It’s also one of the safest countries in the region, with less violent crimes in a year than New York City has in a day.
Panama’s government is pro-business, pro-investor, and extremely friendly to foreigners. Its pensionado program, with discounts as high as 50% on things like entertainment and travel, is the reason it’s often dubbed one of the best places to retire in the entire world.
Round #7: Snorkeling
Winner: Roatan
Boca Chica has a few private beaches where you can spend an afternoon snorkeling. Most notably there’s nearby Islas Secas, which is a 45 minute boat ride away, or Coiba National Park. It’s one of the largest marine parks in the world, but it’s a good 2-3 hours by boat.
In the waters surrounding Roatan there are over 100 diving and snorkeling sites, many of which are accessible directly from the beach. And since the island is so popular with cruisers, there are a number of outfits offering snorkeling excursions for tourists.
Round #8: Diving
Verdict: Boca Chica by a Nose
Roatan does have the benefit of being located near the Mesoamerican Barrier Reef, which reaches down to the island from Belize. As a result, it attracts many divers and is great for beginners.
However, Boca Chica lies in close proximity to a spot that offers some of the world’s best dives, according to National Geographic. Just 27 miles south is Islas Ladrones, which is teeming with schools of jack, snapper, and barracuda. There are also smaller species like surgeonfish, parrotfish, triggerfish, angelfish, and more that can be seen year round.
You can also spot several species of shark and, at certain times of the year, giant manta rays and humpback whales. Visibility near the island is 30-80 meters.
Further away, as mentioned for snorkeling, is Isla de Coiba, where you can explore a 330,000-acre reef which contains 60 of the world’s 75+ species of hard and soft coral. In these protected waters you’ll also find mullet, stingray, puffers, moray eels, and gentle sea turtles.
Snowmanradio
Round #9: Fishing
Winner: Boca Chica Hands-Down
Due to the abundance of species represented in Boca Chica, the fishing in its waters is second to none. A large majority of its tourist accommodations are comprised of fishing lodges, and the number of world record catches that were landed in and around Boca Chica is remarkable.
Most of these were snagged near Hannibal Bank, a world-famous fishing hotspot where the ocean floor rises sharply from thousands of feet deep to a mere 120 feet. Where this cliff juts out, tremendous schools of inshore fish merge with the offshore species who feed on them. Marlin in excess of 1,000 pounds and tuna over 300 pounds have been caught in these waters, as well as snapper, amberjack, and snook.
Since the island actually started as a commercial fishing hub (until tourism began to dominate), you won’t be disappointed with the fishing in Roatan. That is, unless you’ve already experienced the fishing around Hannibal Bank in Boca Chica. That’ll definitely ruin it for you.
Viva Tropical
Round #10: Land Exploration
Verdict: Boca Chica Takes the Round
Roatan has a few areas available for exploration if you’re willing to venture over to the east side of the island and get away from the more heavily touristed areas. There are botanical gardens and nature trails, but it’s also somewhat of a controlled environment.
By contrast, the jungles and rainforest of the Boca Chica archipelago are absolutely prehistoric. There’s an abundance of old growth trees and entire islands that are completely covered in dense untouched forest. There’s also a general attitude of preservation and conservation among the local population, as well as the developers who are starting projects in the area.
Take for example Boca Chica Island, the site of our latest Adventure Colony. It’s a place where like-minded expats can own their very own unspoiled piece of nature. It’s a community with a shared vision of living in harmony with the environment, as evidenced by Monte Vida, the world’s first crowd-funded park.
Viva Tropical
Grand Champion
Just like many of the individual categories, the verdict of which island destination is the right place to establish your expat home is one that’s best left for you to decide.
If you’re looking for an established spot with amenities already in place and a thriving expat community, then check out Roatan. If you’re a more intrepid expat who wants to be one of the first on the scene, for both investment potential as well as bragging rights, then Boca Chica might be the place for you.
Map of Boca Chica
Boca Chica Fast Facts
- Population: About 1,200 (Numbers are hard to nail down, but this is a good guestimate)
- Typical temperature: From 70 to 88 degrees Fahrenheit
- Nearest airport with U.S. flights: Tocumen Airport. Domestic flights to Panama City, Panama and international flights to Costa Rica depart from Enrique Malek International Airport in David
- Nearest U.S. consulate: Panama City, Panama
Map of Roatan
Roatan Fast Facts
- Population: 50,000
- Typical temperature: From 80 to 88 degrees Fahrenheit
- Nearest airport with U.S. flights: Juan Manuel Gálvez International Airport
- Nearest U.S. consulate: Tegucigalpa, Honduras
When looking at lists published by international living gurus citing the best places to live in and retire to overseas, the nations of Ecuador and Panama consistently appear among the places with the highest rankings.
As beautiful, affordable tropical destinations go, they’re among the best of the best. And, while they’re both excellent overall as places to retire, raise a family, start a business, or just live for a short time, each has certain areas where it shines brighter than the other.
We’d be hard-pressed to say which country is the best or, even more specifically, which one is the best for YOU and your particular situation. That decision is best left up to your family, based on your individual needs and priorities.
What we can do is highlight a few categories that are important to expat families and tell you which country excels in that area.
D. Bmcnicol
Round #1 – Lifestyle Hacks
Winner: It’s a Tie
One of the coolest things about living abroad is the ability to enlist help for tasks that you might be fed up with doing yourself, but would’ve never had the means to hire out in North America. Some examples are maids, gardeners, drivers, tutors, and nannies.
And domestic help is abundant and affordable in both Panama and Ecuador. We’d be tempted to give this category to Ecuador for its lower cost (around $10 per day for the services of a maid vs. $15 for the same work in Panama).
However, as is often true, you tend to get what you pay for. So some might argue that the quality of service you receive from domestic helpers is superior in Panama.
Eddie Codel
Round #2 – Connectivity
Outcome: Panama By a Nose
This is another area where both countries excel far beyond the reach of most of their Latin American neighbors. And, up until recently, this category would have gone to Panama by a landslide.
However, Ecuador is aggressively working to improve its internet coverage. As a result, the country’s connectivity is increasing by leaps and bounds with a goal of access in 50% of households by 2015. (It’s currently closer to 35%.) Free public access centers are also widely available across the country.
While Ecuador’s connectivity is great, Panama’s is excellent due in part to a long-standing U.S. military presence. In fact, it ranks #2 in all of Latin America for technology and internet penetration and #1 for wireless availability.
Most Panamanian cities offer affordable broadband service, and there are free wi-fi hotspots nationwide. Because of its technological advances, companies such as Dell, 3M, and Philips have chosen it for their regional headquarters and customer service centers.
Pavel Kirillov
Round #3 – Living Options
Slight Edge: Panama
Both Ecuador and Panama have a lot to offer in terms of variety of living options. When it comes to mountain towns, Cuenca, Ecuador, and Boquete, Panama, are among some of the top expat destinations in Latin America. There are others as well, such as Loja, Quito, and Vilcabamba in Ecuador and Volcan, El Valle, and Santa Fe in Panama.
There are also popular beach towns in both countries. Salinas, Ecuador, has been compared to Miami’s South Beach. There’s also Montanita and Manta. Panama has Bocas del Toro, the quintessential Caribbean beach town, as well as Coronado and Pedasi.
Panama City trumps places like Ecuador’s Quito and Guayaquil if you’re looking for something that more closely resembles a first-world city. The other place where Panama takes the cake is with its options for island living. Ecuador has the Galapagos Islands, a great place for tourists to visit or explore but not necessarily live.
However, Panama offers options like Boca Chica Island, which offer nature-loving expats the opportunity to own their very own piece of a private island that’s only a hour away from the country’s second-largest city and an international airport.
Wogo 24220
Round #4 – Green Living
Winner: Ecuador
While Panama has long had its sights on continuing to improve its infrastructure and commerce, it lags a bit behind in its sustainability initiatives. However, it is making some strides in the right direction. Take for instance the village of Kalu Yala, a development that has a goal of becoming the world’s most sustainable residential community.
Most green efforts in Panama are more grass roots and less government-driven. On the other hand, Ecuador has the unique distinction of being the only country in the world where the rights of the natural environment are protected by the nation’s constitution.
Sustainability issues are on the government’s radar in Ecuador as it battles issues like the threat of drilling in its Yasuni National Park, the most biodiverse place on earth.
Vilseskogen
Round #5 – Cost of Living
Clear Winner: Ecuador
Ecuador and Panama both offer the ability to live satisfying lifestyles for a fraction of the North American budget. As you can imagine, prices vary greatly from one city to the next, with some of the more developed areas running much closer to U.S. prices.
However, overall the cost of living is considerably less in Ecuador. In fact, it’s often one of the country’s biggest selling points, with many expat couples claiming to live just fine on a mere $1200 per month including rent, which averages around $450. This includes luxuries like high speed internet and once-a-week maid service.
Both countries have great discount programs for their senior adults, with Panama’s pensionado program being one of its most attractive benefits for retirees. However for most expats, particularly young families, it’s cheaper to live in Ecuador.
Rivera Notario
Round #6 – Ease of Access
Advantage: Panama
This was an easy one. Mainly because the majority of Ecuador’s incoming flights have layovers in places like Panama City (as well as Miami, Bogota, and places in the Caribbean). As a result, travel to Ecuador is longer and a bit more expensive.
It does have great public transportation once you fly in to Quito or Guayaquil, as well as connecting flights to a number of regional airports.
By contrast, Panama’s recently expanded Tocumen International Airport receives direct incoming flights from multiple U.S. cities, as well as various points in South America. David’s Enrique Malek International Airport will also soon begin welcoming international flights, opening up the western regions of Panama to expats and tourists from all over the world.
Matthew Straubmuller
Round #7 – Business Climate
Champion: Panama, Hands Down
To decide this category, you only need to look at the stats. The International Finance Corporation ranks Panama 55th in the world for ease of doing business, compared to Ecuador’s rank of 135th. This survey is based on factors that affect one’s ability to start and operate a local business.
This comes as no surprise, as Panama’s government has historically been extremely pro-business and pro-investor. It’s also somewhat of a tax haven and an increasingly popular place to open an offshore bank account. Panama also offers a whole host of visa options, with the number of choices increasing frequently.
Ecuador, on the other hand, has a reputation of being a bit unstable and unpredictable. It struggles with issues such as high government turnover rates and an economy that is based a bit too heavily on petroleum.
However, Ecuador’s economy is growing. The country is also taking steps to reduce the government’s influence in certain business sectors.
Gaspar Serrano
Round #8 – Banking
Advantage: Panama
Both Ecuador and Panama benefit from having a dollarized economy. However, both have seen requirements tightening in recent years due to laws like FATCA and other U.S. tax evasion agreements. As a result, it’s becoming increasingly difficult for foreigners to open an account.
That being said, the banking process is far more friendly to foreigners in Panama. It’s home to a number of international banks and is emerging as a major player on the global banking scene.
Ecuador, on the other hand, suffers from inconsistent regulations and subpar accounting standards, although its banks’ performance has improved in recent years. Due to the inconsistencies, however, the process of opening an account can be a bit long and tedious.
thinkpanama
Round #9 – Investment Opportunities
Our Pick: Panama
When you look at the ingredients for a savvy investment, they include factors like low costs, massive infrastructure projects, a focus on tourism, and government incentives. Both Ecuador and Panama have all of these. And lots of them.
Panama just has more. Its real estate is still affordable. The government has recently invested $15 billion in projects like airport expansions, new roads, and a metro system. There are tax breaks on everything from the importation of building materials to build a hotel to income tax on land purchased for reforestation.
Ecuador offers many of those same advantages, and often at a lower cost. So you could argue that in Ecuador there’s a bit more room for appreciation. However, the benefits of investing in Panama are just still too good to award this category to anyone else.
Presidencia de Republic de Ecuador
Round #10 – Health Care
Outcome: Another Tie
Ecuador and Panama both benefit from having excellent health care systems, with skilled medical staff and modern facilities. English is widely spoken by doctors in both countries, many of whom trained in the U.S, and hospitals offer the latest in technological advancements.
The low cost of care is also a big plus, with procedures generally running about ¼ of the price for the same service in North America. Health insurance is also affordable and widely available.
Both countries suffer from the same main drawback in this category: availability in rural areas. While they both have state-of-the-art hospitals, they’re found only in the largest cities. Clinics in more remote locations may be limited to basic services or even first aid only.
ThinkPanama
Round #11 – Consumer Goods
Winner: Panama
Both Ecuador and Panama have a surprisingly good selection of consumer goods. As a result, you usually need only drive to the nearest city to find exactly what you’re looking for, or at least a comparable replacement.
Where Ecuador suffers in this arena is due to its ever-increasing taxes. Many items have become more difficult to find, or at least more expensive, in recent years. Consequently, fewer and fewer items (like vehicles and cell phones) are being imported.
Panama, on the other hand, has become quite the shopping hub for folks all across Latin America. This is due in part to its low value-added tax of 7% (vs. 12% in Ecuador). We’ve even seen people who traveled from Ecuador to Panama City to buy several flat-screen TV’s due to the better prices and availability.
D. Rorfold
Round #12 – Foreign Land Ownership
Victor: Panama
In both Ecuador and Panama, foreigners who buy property have their rights protected by the constitution just the same as nationals of that country. There are also few restrictions on what land they can buy. Well, there’s only one really, and it’s in Panama where foreigners can’t own land within 10 kilometers of the border.
Both countries offer an abundance of land available at, in some cases, rock-bottom prices. However due diligence is absolutely necessary before buying land in either country.
Purchasing real estate as a foreigner can be a challenge, but the whole process is a bit easier in Panama. A good attorney is a must, so choose one who’s experienced in land transactions and can handle things like researching the title, drafting contracts, and registering the deed.
D Rorfold
And the Grand Champion Is…
Nah. We didn’t keep score. There’s just too much to love about both of these countries for us to try to give the trophy to one or the other.
What’s more important than our opinion is your own experience with each of these fine countries. So, if Ecuador and Panama are on your short list of potential expat destinations, then we suggest you open a new tab and start looking for flights. There’s no better way to pick a winner than to just let the two duke it out firsthand.
Map of Panama
Panama Fast Facts
- Population: 3.8 million
- Typical temperature: Temperature typically varies from 72°F to 91°F
- Nearest airport with U.S. flights: U.S. bound flights leave daily from Tocumen International Airport
- Nearest U.S. consulate: Panama City
Map of Ecuador
Ecuador Fast Facts
- Population: About 15.49 million
- Typical temperature: Ecuador is known for its micro climates.
- Major airports with U.S. flights: Quito, Cuenca and Guayaquil. Complete list of airports in Ecuador.
- Nearest U.S. consulate: Quito and Guayaquil
Costa Rica has long been a favorite of expats and international travelers. With its beautiful beaches, friendly locals, and perfect weather it has claimed the top spot on lists of best tropical destinations for decades.
But what about newcomer Ecuador?
Rich in culture, and with a wide variety of climates and settings, Costa Rica’s South American neighbor is giving it a run for its money. Speaking of which, the cost of living in Ecuador is another perk that’s causing it to take top billing in many of those lists that Costa Rica once dominated.
Which is the better travel destination or expat haven?
Well, that depends solely on you and your priorities and expectations. To help you make a more educated decision, we’ve aligned the two countries in a side-by-side comparison so you can see how they stack up in several of the most important categories.
Ecuador vs Costa Rica
Use the Infographic on Your Own Site
Round #1 – Lifestyle Hacks
Slight Advantage: Ecuador
One of the most amazing benefits of living in Latin America is the opportunity to outsource a lot of your less desirable tasks. With a wealth of local labor resources that aren’t available in North America, you can hire helpers ranging from gardeners to tutors to drivers to grocery delivery guys.
You can even enlist the full-time services of a maid. (Think cooking, cleaning, grocery shopping, and laundry.) And, in Ecuador, that’ll only run you a mere $10 per day!
The cost in Costa Rica is a little higher, closer to $15 per day, but it can be argued that this is one area where you get what you pay for. With Costa Rica’s heavily customer-oriented service culture, the aid you’ll get there is top-notch.
However, the service in Ecuador is excellent as well so, in terms of value, we have to award this category to them.
Mathew Kebbeckas
Round #2 – Connectivity
Outcome: Ecuador Advances
For a country that excels so well in so many areas, Costa Rica is light years behind the rest in terms of internet speed and availability. Broadband is available in most of the larger cities, but it’s often difficult to find a signal elsewhere.
The country’s connection speed has increased by 43% in the past year. However, at 2.1 megabytes per second, it’s still barely enough to stream a movie in standard definition (and you can forget high def).
Ecuador, on the other hand, is aggressively working to increase its internet coverage. Currently, over 35% of the population is connected, with a goal of access in 50% of households by 2015. In Ecuador there are also free public access centers, called Infocentros, scattered all over the country, even in more remote areas.
Anthony Doudt
Round #3 – Living Options
Winner: Costa Rica for its Tropical Lifestyle
Both Costa Rica and Ecuador, with their varied topography and diverse ecoclimates, offer a wide range of living and travel options. There are mountain towns, beach communities, and bustling cities.
In most of those categories, Ecuador is a worthy competitor. Cities like Cuenca and Loja offer colonial charm plus all the modern conveniences. The Galapagos Islands offer some of the world’s best biodiversity. Ecuador also has major cities, like Quito and Guayaquil, for those who want easy access to services and amenities (arguably better than boring, unattractive San Jose, Costa Rica).
Where Ecuador falls flat is with its tropical lifestyle. In short, beach towns. While it has a handful of established destinations, like Salinas and Montanita, those towns aren’t even in the same ballpark with what Costa Rica has to offer.
Tropical living and ecotourism are exactly what Costa Rica does so well. As a result, it can be a bit overrun with tourists at times and in certain locations. However, with so many options, there are still a number of places off the beaten path where you can find a secluded beach or a remote surfing spot. Costa Rica is the epitome of most expats’ ideal tropical lifestyle.
Wanja Krah
Round #4 – Green Living
Slight Edge: Costa Rica
In keeping with its commitment to the natural environment and its push towards ecotourism, Costa Rica is about as green as they come. Almost ¼ of the country’s total area is parkland. Over 90% of its electricity comes from renewable energy sources, with 95% projected by year end. It’s also well on its way to becoming the world’s first carbon-free economy.
It also feels greener in Costa Rica, with many businesses and communities promoting green initiatives and healthy living. However, Ecuador is certainly taking strides in this direction as well.
It’s the only country in the world where the rights of the natural environment are protected in the nation’s constitution. Ecuador is also home to Yasuni National Park, the most biodiverse place on earth. Although the region is constantly being threatened due to its 800-million barrel oil reserve, the country has undergone tremendous measures to protect it.
Tibo
Round #5 – Cost of Living
Clear Winner: Ecuador
Costa Rica is a top tropical destination for tourists and expats alike. However, it isn’t for its low costs. While still a fraction of what you’d pay for the same goods and services in North America, Costa Rica has one of the highest costs of living in Latin America.
By contrast, Ecuador’s reasonable cost of living is often one of its biggest selling points. There a couple could live simply on a mere $1200 per month. This total even includes rent, which runs around $450 on average.
And, by “simply,” we don’t mean completely free of luxuries like once-per-week maid service and high speed internet. While Ecuador’s cost of living is low, the lifestyle it affords is far from meager.
Sean Hobson
Round #6 – Ease of Access
Advantage: Costa Rica
Because of its long-standing status as a top Latin American destination, Costa Rica is serviced by a whopping 13 large airlines. It’s only 2 ½ hours from Miami and air travel from North America is often quite reasonable.
So not only is Costa Rica easy to access, it’s also a great starting point for travel in and around Central America. The only downside is that it has relatively few airports.
Ecuador has two international, Quito and Guayaquil, as well as a number of regional airports. However, most incoming flights have layovers in Miami, Panama City, Bogota, or the Caribbean, resulting in longer (and more expensive) travel.
Once you arrive in either country, public transportation is available to get you to points throughout the country. However, some trips in Ecuador can grow quite long. And Costa Rica isn’t exactly known for the quality of its roads.
CC
Round #7 – Business Climate
Champion – Costa Rica
We’ll go with some cold hard facts on this one. The International Finance Corporation ranks Costa Rica #102 for ease of doing business. Ecuador comes in at #135. In other words, neither has the ideal business climate, but Costa Rica’s is significantly better.
While far from perfect, Costa Rica’s business environment is one of the most stable in Latin America, with numerous incentives like low tariffs and competitive tax rates. Recent legislation has been aimed at attracting foreign investment and supporting the private sector. Processes like obtaining a visa or starting a business are relatively hassle-free, by developing country standards.
Ecuador’s business climate has been somewhat unpredictable in recent years. Its dollarized government is heavily based on petroleum, resulting in the need for the nation to look for ways to improve its trade balance. However, recent strides in economic policy have led to an estimated 5% growth.
Ecuador also offers a number of visa options. However, a number of stipulations (like losing your visa if you’re gone for more than 6 months) make maintaining residency a challenge at times.
My Future
Round #8 – Banking
Lesser Evil: Costa Rica
Due to FATCA and other U.S. tax evasion agreements, both Costa Rica and Ecuador have recently implemented stricter measures that create difficulties for foreigners attempting to bank there. You can no longer open an account with merely a passport, in either location. In fact, the requirements are very much the same for both countries.
Why Costa Rica? Mainly because of Ecuador’s inconsistent regulations and subpar accounting standards. The process of establishing an account can also take a good bit longer there.
One advantage Ecuador has is its use of the U.S. dollar as its official currency. Costa Rica’s colon, while it generally follows the dollar, is thinly traded and could present a problem in the event of a worldwide financial crisis.
Patrick Hall
Round #9 – Investment Opportunities
Winner: Ecuador
Costa Rica’s economy is one of the safest in Latin America, and its policies encourage foreign investment. However, though it excels in stability, it lags behind in opportunity.
Ecuador offers a wealth of real estate and business opportunities at a lower cost and, consequently, with a larger growth potential. The country is investing heavily in infrastructure, which generally results in increased property values. Infrastructure improvements are the #1 catalyst for real estate appreciation, as we discuss extensively in Pay Dirt, our latest ebook.
Tourism investments are also a great option in Ecuador. For its incredible number of natural attractions, Ecuador has a relatively weak tourist infrastructure. There’s a lot of potential for savvy entrepreneurs to profit in this arena as Ecuador continues to gain popularity among expats and international travelers.
Yannis
Round #10 – Health Care
Slight Edge: Costa Rica
This was a close one. Both countries offer excellent health care with skilled medical professionals and modern facilities, particularly in the larger cities. Costs are often as low as ¼ of the price for the same service in North America. Health insurance is also widely available and extremely affordable.
English is widely spoken among doctors in both countries, and many physicians even trained in the U.S. Hospitals are clean and equipped with the latest technological innovations.
While the care provided is great in both countries, the quality of Costa Rica’s health care system is ranked 36th in the world, ahead of the U.S. at 37th. It’s also physically closer to the United States, which could come in handy in the event that medical evacuation or frequent medical travel were necessary.
Mathew Johnson
Round #11 – Consumer Goods
Winner: Neither
Both Ecuador and Costa Rica have a few strikes against them when it comes to the availability and affordability of consumer products. Costa Rica taxes consumer goods heavily (its Value Added Tax is 14%), so as a result less of them are imported.
This can make it particularly hard to find the things you’re after. And if you do locate a hard-to-find item, you’re very likely to pay out the wazoo for it.
At 12%, Ecuador’s VAT is only slightly lower than that of Costa Rica. However taxes on imported goods have been steadily increasing. As a result, many Ecuadorians are actually going outside of the country to buy things like electronics.
Andrew Hall
Round #12 – Foreign Land Ownership
Our Pick: Ecuador
While both countries’ laws protect foreigners who own property, Ecuador’s are much more liberal. Property rights are guaranteed by the constitution, and they apply equally to foreigners and Ecuadorians alike.
What’s more, Ecuador places no restrictions whatsoever on foreigners who wish to purchase land. And there’s an abundance to choose from, often at rock bottom prices.
Compare this with Costa Rica who do not allow foreign residents to purchase land considered restricted or concession areas (which includes 95% of all beachfront property) until they’ve lived in the country for at least 5 years. However, many circumvent this limitation by buying property in the name of a Costa Rican corporation in which they have 49% ownership.
Due diligence is an absolute must before buying land in either country. We recommend the services of a qualified attorney, with experience in land transactions, who can thoroughly research the title and ownership rights.
Costa Rica vs. Ecuador – Who’s the Grand Champion?
Were you keeping score? We weren’t. That’s because it’s so difficult to say for certain exactly which destination is right for an individual.
Our best advice? Come see for yourself.
Is Costa Rica, with its tropical lifestyle and established expat communities, your idea of a dream destination? Or do you prefer to invest in up-and-coming Ecuador, where there’s excellent investment potential and so much left to discover?
There’s only one way to find out.
Rinaldo W.
Ecuador vs. Nicaragua. Which is the better place to live overseas?
When it comes to choosing a destination in Latin America, both Nicaragua and Ecuador are great options. Both enjoy incredible eco-diversity, numerous opportunities for adventure, and a whole lot of bang for your buck.
Ecuador has consistently been named one of the world’s best places to retire. Nicaragua, which has historically remained off many expats’ radars due to its troubled past, has risen to the ranks of being the safest country in Central America. Today it’s emerging as one of the top destinations in the region.
So, which of these countries is the better option for your family’s much-anticipated move abroad? Well, that depends on you and how you’d like your life to look in your new home overseas.
While we can’t make a recommendation that’s right for everyone we can show you how the two stack up in several important categories in this Ecuador vs. Nicaragua stand-off.
Use the Infographic on your site:
Round #1 – Lifestyle Hacks
Winner: Nicaragua
One of the best ways to improve your lifestyle when living overseas is by hiring domestic help, something many can’t afford in North America. For instance, in Ecuador the cost to hire a maid for the day is $10.
Sound like a good deal? Not as good as Nicaragua where you can employ a full-time helper, like a nanny or caretaker, for just over $100 per month (depending on their hours and responsibilities). Domestic help is generally easy to find, but it’s important to screen applicants carefully. A safe bet is to hire a close friend or family member of another maid who is a known good worker.
Theragans
Round #2 – Internet Connectivity
Advantage: Ecuador
In terms of Internet penetration, speed, and quality, Ecuador wins this category. Overall it has more widespread affordable access, with over 35% of the population connected (vs. 10% in Nicaragua).
The main difference between the two is with Internet access in rural areas. In Nicaragua there isn’t any. By contrast, Ecuador has public access centers, called Infocentros, that are available (and free) even in more remote areas.
Connectivity is definitely on the agenda of both countries’ governments. Even Nicaragua has increased its availability 30-fold in the past 5 years alone. However, it still lags a considerable distance (12,628 internet hosts to Ecuador’s 170,538) behind Ecuador, whose goal is Internet access in 50% of its households by 2015.
Johnny Chunga
Round #3 – Living Options
Outcome: Ecuador for Variety, Nicaragua for Safety
While both Ecuador and Nicaragua boast their share of colonial towns, coastal paradises, and mountain hideaways, Ecuador’s four distinct regions offer much greater diversity in scenery and climate.
Popular Ecuadorian cities include the mountain towns of Cuenca and Loja, with their colonial charm and modern amenities. Also, on the coast, are places like Salinas and Montanita, which attract a large number of beach-goers. Ecuador is also home to the Galapagos Islands, perfect for nature-lovers.
Nicaragua also has its fair share of expat hotspots, and many are growing at increasing rates. Granada, which is situated on Lake Nicaragua, is a popular favorite. As is Leon, another colonial city that also boasts close proximity to the Pacific Ocean. Nearby beach towns include San Juan del Sur, famous for its surfing and nightlife. The Corn Islands are also an option for those seeking a Caribbean vibe.
It’s also worth noting that Nicaragua is now the safest nation in Central America, while crime continues to be a problem in Ecuador. However, it’s entirely possible to live safely in either location (and without burglar bars). What’s important is to use common sense and avoid appearing overly “flashy” or waving wads of large bills when paying for items.
Game of Light
Round #4 – Green Living
Clear Winner: Ecuador
When it comes to conservation and sustainability, Nicaragua is the land of missed opportunity. The largest country in Central America (and the least populated), Nicaragua is full of natural resources. However, several factors are preventing the nation from realizing its potential.
The lack of enforceable land rights has led to massive deforestation and a lack of government regulation. Pesticide use is widespread, and there’s little safe drinking water. Only 6% of the nation’s forests are protected.
Compare this with Ecuador, which has the lowest environmental footprint in the world. It’s also the only country in the world whose constitution protects the rights of its natural environment. Ecuador is also home to Yasuni National Park, the most biodiverse spot on the planet. Their efforts to protect it from the harmful effects of drilling its 800-million barrel oil reserve have been among the most creative in history.
Barefoot Expeditions
Round #5 – Cost of Living
Slight Edge: Ecuador
While both countries enjoy a very reasonable cost of living, prices in Ecuador are generally more affordable. This is particularly true when it comes to consumables, like groceries and restaurant meals (26% and 24% higher in Nicaragua, respectively). It’s also true of the country’s inexpensive health care.
In Ecuador, a couple could live simply on about $1200 per month, including rent which runs around $450 on average. Factored into this amount are expenses such as public transportation (in other words, not owning a car) and once-per-week maid service.
Two big exceptions are rent and transportation to North America. Home rentals run around 33% less in Nicaragua. It’s also much cheaper (and shorter) to fly to the U.S. More on that coming up.
Julie Rubinic
Round #6 – Ease of Access
Winner: Nicaragua
Ecuador has two international airports, Quito (UIO) and Guayaquil (GYE), although most travelers fly into Quito. Flights arrive from U.S. cities like Miami, Houston, and New York, as well as nearby Panama City, Panama, or Bogota, Colombia.
Due to its close proximity to the U.S., Nicaragua offers frequent short flights to a number of major U.S. cities. American Airlines has 3 daily flights from Miami. There are also daily flights from Atlanta (Delta) and Houston (Continental). Spirit Airlines also offers 3 flights per week from Fort Lauderdale.
In addition to international flights, which land at Sandino International Airport in Managua, there are also a number of domestic airlines that fly to cities across Nicaragua, including the Corn Islands. Nicaragua also offers short flights to nearby Costa Rica and Panama.
Vilseskogen
But once you’re in Ecuador, getting around’s a breeze.
It’s worth mentioning that, while Nicaragua is easier to get TO, Ecuador is a piece of cake to get around IN. The country’s transportation system is bordering on excellent. Thanks to subsidized fuel costs, there are inexpensive domestic flights. You can also fill up your car for as little as $1 per gallon.
Round #7 – Business Climate
Slight Advantage: Ecuador (for Now)
Let’s face it. Neither of these two countries has a gleaming record of political stability. Ecuador saw 48 presidents in its first 131 years as a republic. And while Nicaragua’s Daniel Ortega has certainly done some good for the nation’s economy, he’s not exactly known for his friendliness to businesses. He’s also currently pushing legal reform that will essentially result in the possibility of his limitless reelection.
As a result, this category was a tough one to call. We’re awarding it to Ecuador, mainly because Rafael Correa has a somewhat better track record as a political leader. In addition, the Ecuadorian government has been taking strides towards reducing its influence in various sectors and allowing independent businesses to function more…well, independently…due to new privatization laws. As a result, the country has seen considerable economic growth.
While we’re on the subject of government and bureaucracy, Ecuador also boasts the easier process for obtaining a visa. The whole ordeal is generally faster, cheaper, and less confusing than in Nicaragua where there aren’t a lot of resources for information. The biggest downside? If you leave for 6 months you lose your visa.
ST Jenna
Round #8 – Banking
Outcome: Nicaragua Wins
Both Nicaragua and Ecuador require that you jump through quite a few hurdles in order to open a bank account as a foreigner. However, once your account is established, you’ll generally find that Nicaragua offers the better banking experience for North Americans.
While it does use a different form of currency (the Cordoba), most establishments will also accept the U.S. dollar. (Note: Ecuador has had a dollarized economy since 2000.) What’s more, many Nicaraguan banks (6 at last count) hold relationships with U.S. financial institutions. This makes for an easy process when transferring money. However, it also means that “they” can see your money and where it’s going. Banks in Nicaragua also pay competitive interest rates on deposits.
The performance and transparency of Ecuador’s banks has improved in recent years. However, they still struggle with implementing and enforcing uniform regulations. Their accounting standards are also subpar. In possibly its worst offense, Ecuador also charges a 5% tax on all funds transferred out of the country. Ouch.
It’s easy to see why Nicaragua is the natural choice for banking of the two countries. That being said, neither of these is a place you’d want to choose for stashing large amounts of cash. There are just too many better options globally.
Dane Brian
Round #9 – Investment Opportunities
Winner: Ecuador
We mentioned that Correa has made some decent accomplishments during his tenure as president. One of the best ones from an investment standpoint? Infrastructure. Massive improvements in infrastructure.
Why does that matter? Glad you asked. Infrastructure upgrades (or even rumored ones) equal huge potential to savvy investors. Buying a beautiful piece of untouched beach that’s about to become more accessible due to a new road coming in is a tried and true strategy and one that we’ve written about extensively in our new ebook, Pay Dirt.
In addition to real estate, investing in tourism is also a smart move right now in Ecuador Real Estate. The country has a ton of amazing attractions, yet its existing tourist infrastructure is grossly underused. Plus the government offers a wealth of tax deductions and other incentives to foreign investors.
A. Scott
Similar laws and incentives exist to encourage tourism investment in Nicaragua, as well. Also, organizations like PRONicaragua aim to assist foreign investors by providing support services to those looking at potential business opportunities there.
Round #10 – Healthcare
Slight Edge: Ecuador
When it comes to Ecuador vs. Nicaragua, both countries enjoy clean, modern, quality healthcare facilities with well-trained medical staffs. However, the level of care and accessibility of treatment are slightly higher in Ecuador. Most of the doctors speak English, and many even trained in the U.S.
Costs are comparable in both countries, with a visit to a specialist costing no more than $25-$30 and an overnight stay in a private room still under $100. Accessibility is fairly widespread, but–as is true of most developing countries–availability and quality is far better in and around larger cities.
Perhaps the biggest difference in this category comes in the direction both countries’ systems are heading. While Nicaragua’s healthcare stands in need of some improvement, Ecuador’s government is currently taking strides to improve its own system.
Retro Traveler
Round #11 – Consumer Goods
Verdict: It’s a Tie
When it comes to consumer goods, Ecuador definitely wins for the availability of products. In Ecuador you can find a variety of domestic and imported products. However, due to recently imposed taxes and restrictions on imports, items such as vehicles and cell phones are becoming more scarce and expensive.
As a result, Nicaragua (although it has less to offer in the way of variety) may soon offer the better value on consumer products. This may become increasingly true as the country continues to attract more and more expats. Where expats are, imported products aren’t often far behind.
K. Kamikaze
Round #12 – Foreign Land Ownership
Victor: Ecuador
The laws of both countries are favorable towards foreigners who want to own land in either Ecuador or Nicaragua. Property rights are guaranteed in each nation’s constitution, and they apply equally to foreigners as well as nationals.
While Nicaragua does restrict property ownership near its borders, Ecuador has no restrictions whatsoever on foreigners owning property. The buying process is similar in both countries, requiring due diligence to carefully research the title and ownership. The services of a qualified attorney can simplify the buying process in either country.
K. Sevik
Ecuador vs. Nicaragua – Grand Champion?
While the match-up looks to have been a slaughter, with Ecuador taking the grand prize in this Ecuador vs. Nicaragua competition, we’d advise you to take this information with a grain of salt. While we’ve tried to remain as objective as possible, the decision of where to relocate as an expat is one that can only be made through your own careful consideration.
Articles and comparisons are helpful, but there’s just no substitute for seeing a destination with your own two eyes and exploring it with your own two feet. If one, or both, of these countries is on your short list, book a trip to check it out for yourself. A trip to the Latin tropics is sure to prove a delight for all the senses.
Map of Ecuador
Ecuador Fast Facts
- Population: About 15.49 million
- Typical temperature: Ecuador is known for its micro climates, learn more here.
- Major airports with U.S. flights: Quito, Cuenca and Guayaquil. Complete list of airports in Ecuador.
- Nearest U.S. consulate: Quito and Guayaquil
Map of Nicaragua
Nicaragua Fast Facts
- Population: About 5.99 million
- Typical temperature: There are three temperature zones in Nicaragua. In the lowlands (Pacific and Atlantic coast) temperatures vary roughly between 72° F at night and 86° F at daytime (22° C – 30° C). Temperature can reach 100° F in May (38° C). The central part of the country is about 9° F (5° C) cooler, and in the mountains in the north it’s about 18° F (10° C) cooler.
- Nearest airport with U.S. flights: Managua
- Nearest U.S. consulate: Managua
For would-be expats looking to relocate to Central America, Costa Rica and Panama are natural front runners.
And for good reason.
Located adjacent to one another at the southernmost end of Central America, the two are quite similar in many ways. Both consistently top the lists of best places to retire in Latin America, and the world for that matter.
They both boast amazing vistas, near-perfect climates, modern amenities with a low cost of living, excellent health care, and some really great options for how you can spend your free time. However, there are a few areas where one nation has a slight advantage over its neighbor.
While many areas of consideration depend largely on personal preference, we lined up Panama vs. Costa Rica in a head-to-head cage match to see which one comes out on top.
Use the Infographic on Your Own Site
Round #1: Lifestyle Hacks
Advantage: Costa Rica
Both Panama and Costa Rica offer the opportunity to simplify your life by hiring out a number of services that, quite frankly, you’d just rather not have to do on your own. You can easily enlist the help of a gardener, a driver, a tutor for your children, or even a full-time maid who cleans your house, buys your groceries, does your laundry, and prepares your meals six days a week (for less than $15 per day).
While the costs are fairly close, domestic help can be a bit more expensive in Costa Rica. Why’d we pick it as the winner if it’s the more expensive of the two? Easy.
When comparing Panama vs. Costa Rica, Costa Rica has a much more customer-oriented service culture. So, while you may pay a few more dollars per day for domestic help in Costa Rica, the extra money is totally worth it in terms of the quality of personal service you’ll receive.
Round #2 – Connectivity
Winner: Panama by a Landslide
Due in part to a long-standing U.S. military presence, Panama is one of the most connected countries in Latin America. Broadband internet service is available in most cities and is very affordable. There are also numerous free wi-fi hotspots nationwide.
In fact, Panama was recently named #2 in all of Latin America for technology and internet penetration. It also earned the #1 spot for wireless availability. That’s why so many multinational companies like Dell, 3M, and Philips are choosing to establish regional headquarters there.
By contrast, Costa Rica is light years behind its Central American neighbors in terms of internet speed. Although its average connection speed has increased 43% percent in the past year, it’s still only 2.1 megabytes per second. (Streaming a movie requires 1.5 Mbps, or 4 Mbps in high definition.)
Brian Gratwicke
Round #3 – Living Options
Outcome: Varies by Region
This category is a hard one to call. Both Costa Rica and Panama have such varied topography and eco-climates. Not to mention all the other factors that can vary greatly from one region to the next, such as climate, infrastructure, and proximity to attractions.
For comparison’s sake, we’ll compare Panama vs. Costa Rica in four subcategories and examine the top cities expats are choosing for each type of area.
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Mountain towns…Winner: Panama A popular mountain destination for North American expats in Costa Rica is Atenas. Located in the Central Valley, it enjoys mild weather year-round, great views of the surrounding mountains, proximity to San Jose, and an established expat community. Boquete, Panama, offers all those things plus cooler temps, better roads and infrastructure, and a million things to do nearby, from ziplining through cloud forests to climbing volcanoes to sport fishing off the coast.
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City living…Champion: Panama Again Panama City, the nation’s capital, is a vibrant cosmopolitan city that caters to residents and travelers looking for both business and adventure. It offers world-class shopping and dining, as well as a 655-acre rain forest that’s within its city limits. On the other hand, San Jose, Costa Rica, is much smaller, much less attractive, and much more limited in terms of anything interesting to do.
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Beach communities…Advantage: Costa Rica Beach living is right in Costa Rica’s wheelhouse. Towns like Nosara and many, many more have been drawing nomads and expats for decades, and the country caters very well to this genre. Costa Rica’s beach towns have everything you need, from aquatic adventures to quaint accommodations. Panama has a few good options, such as Coronado near the capital, but none can hold a candle to the laid-back coastal cities of Costa Rica.
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Island retreats…No Contest: Panama Costa Rica was almost a no-show for this match. There just simply aren’t many island living options available for comparison. Cano Island offers a serene natural setting among the reefs, but with such slim pickings island ownership is pretty much out of the question. However, in Panama, you can own your own piece of paradise on our own Boca Chica Island, a 400-acre private island offering lots ranging from 5 to 50 acres. It’s just off the coast in an area that’s surrounded by a multitude of land and sea adventures.
Round #4 – Green Living
Winner: Costa Rica, Hands Down
Both Panama and Costa Rica have great options for living in harmony with nature. However, Costa Rica is committed to protecting its natural environment, due largely to its importance in the country’s eco-tourism industry. Almost ¼ of its total area is dedicated to parkland.
Over 90% of the country’s electricity comes from renewable energy sources, with a plan to increase this to 95% by 2014. It’s also on its way to becoming the first carbon-free economy in the world.
Both countries have tons of options for eco-tourism, from jungle tours to mangrove exploration to scuba diving.
Smilla4
Round #5 – Cost of Living
Slight Edge: Panama
Panama and Costa Rica both boast a cost of living that is a fraction of that of the U.S. or Canada. However, from the cost of property to the cost of a bunch of bananas, prices are a bit lower in Panama on average.
It’s true that in both countries there are certain regions or cities (typically the most developed or heavily-touristed areas) where everything from rent to a three-course meal runs close to North American prices, but in general you can find more places in Panama where those expenses are considerably less.
One of the largest contributing factors to Panama’s affordability for many expats is its Pensionado Program. Available to “retirees” of any age, those who meet the income requirements can qualify for discounts ranging from 15-50% on everything from health care to entertainment.
Round #6 – Ease of Access
Verdict: It’s a Tie
Panama and Costa Rica are fairly neck and neck in this category, each for their own reason. Panama takes the prize for international arrivals and departures. Its Tocumen International Airport has flights to several North American cities, as well as various points in South America, making Panama a great destination for those who want easy access to faraway places.
Costa Rica wins for being a great jumping-off point for other adventures throughout Central America, due to its more central location and affordable travel options.
Round #7 – Business Climate
Advantage: Panama
The International Finance Corporation ranked Panama 55th in the world for ease of doing business, compared to a rank of 102 for Costa Rica. Their findings are based on an examination of 10 factors to determine which countries are most conducive to the startup and operation of a local business.
And the difference is obvious if you’ve experienced the business climate of the two nations. Panama’s government is extremely pro-business and pro-investor. It’s also something of a tax haven. Costa Rica on the other hand is much more bureaucratic, with slower processes and higher taxes and fees.
Arturo Sotillo
Round #8 – Banking
Winner: Costa Rica (For Now)
With changing regulations, in both the U.S. as well as Costa Rica and Panama, this category tends to fluctuate greatly over time. However, for the past few years at least, banking for North Americans has typically been easier in Costa Rica.
This is mainly in terms of opening and holding a bank account. Both countries share many of the same requirements (identification, proof of residence and income, etc.). However, Costa Rica only requires a $25 minimum deposit (vs. Panama’s $1,000). Panamanian banks may also ask for additional documents such as proof of employment or reference letters from one or more North American banks.
One difference worth noting is that Panama’s official currency is the dollar, while Costa Rica uses the colon. Because it’s so thinly traded, the colon generally follows the dollar. However, in the event of a financial crisis, this could mean problems for Costa Rica.
Round #9 – Investment Opportunities
Our Pick: Panama
To put this showdown into perspective, let’s use the analogy that Panama is basically the Costa Rica of twenty years ago. When North American retirees began to get tired of the overcrowded expat communities and rising costs of Mexico, they turned to Costa Rica. Now that Costa Rica has reached mega-expat status, people are looking to Panama.
Costs are still lower and, as a result, there is much more capacity for growth. In addition to those factors, the Panamanian government is and has been placing heavy emphasis on tourism investment, largely in the form of tax incentives. It’s also possible for foreign residents to obtain financing in Panama, something they can’t get in Costa Rica.
Round #10 – Healthcare
Outcome: Too Close to Call
Healthcare is excellent in both Costa Rica and Panama. The two countries both have inexpensive public health care, with Costa Rica’s being touted as one of the world’s best low-cost medical programs. In fact, the quality of its health care system is ranked 36th in the world by the WHO, with the U.S. in 37th place.
Both countries also have private hospitals available, where many of the doctors speak English and trained in the U.S. Panama has several state-of-the-art hospitals that are affiliated with world-renowned facilities in the U.S., such as Johns Hopkins.
Panama’s only drawback is the accessibility of its modern private medical facilities. They’re often found only in the largest cities, specifically Panama City and David. Those in rural areas may have trouble finding the care they need, as often only first aid is available in the most remote areas.
World Bank
Round #11 – Consumer Goods
Winner: Panama
We mentioned that the cost of living is slightly higher in Costa Rica. This is especially true when it comes to consumer goods, like groceries–for instance–which generally run about 15-20% higher than in Panama. Exports are also taxed more heavily in Costa Rica, so as a result a lot of products are much harder to find.
Costa Rica also has a higher value added tax (VAT), 14% vs. 7% in Panama. It also has a lot more taxes on luxury items like cars, electronics, and appliances. Compare this with Panama which has lower taxes and even a number of duty-free zones.
These factors have made Panama quite the shopping hub for folks in Latin America. In fact, on one of our last trips to Ecuador we met some people who were on their way back from Panama City where they’d gone specifically to buy several flat screen TVs, due to the country’s lower prices and better selection.
Round #12 – Foreign Land Ownership
Undisputed Champ: Panama
Panama has virtually no restrictions on the ownership of property by foreigners. In fact, there’s only one, and here it is. Foreigners, or foreign owners of Panamanian corporations, can’t own property within 10 kilometers of the country’s borders. That’s it. Also, under Panamanian law, foreigners have all the same protections as citizens.
By contrast, Costa Rica’s land ownership laws are not as liberally applied to foreigners. Land considered restricted or concession areas, including 95% of all beachfront property, is not eligible to be owned by foreign residents (unless they’ve lived in Costa Rica for at least 5 years). The only option for use of this kind of property is through 49% ownership in a corporation with a native Costa Rican.
The buying process is also much easier in Panama, where a good attorney can help to simplify things like title searches, purchase agreements, and the registering of the deed.
Coco Lime Monkey
Panama vs. Costa Rica…Which is the Grand Champion?
Were you keeping score during that match-up of Panama vs. Costa Rica? If so, we would advise you to take our recommendations with a grain of salt. Panama and Costa Rica both offer a host of great places to live as an expat. And determining which one is right for you depends 100% on your values and what you want out of your life in a new location.
Want to Learn about Residency Options?
Each one of these countries has different strengths, but you can listen to our interviews with the experts and find out what it takes to become a resident or if you need to do it at all. The Costa Rica residency interview is here and the Panama residency discussion can be found here.
Our best advice? Plan a trip down to Central America. Check out both of these amazing expat destinations and choose for yourself which one is right for your family.
Cuenca, Ecuador photo by Jonathan Hood
When considering relocating to Latin America, many would-be expats quickly narrow their search down to the countries of Ecuador and Panama. And why wouldn’t they?
Ecuador has topped out International Living’s list of best places to retire for five years running, with Panama always following closely in the second or third spot. This list is based on an index of different factors such as climate, cost of living, culture, and many more. However, much of this criteria is highly subjective. The hot, humid climate you enjoy could be someone else’s idea of misery. Likewise the Burger King on the corner might be a welcome sight to some, but for you it might evoke the very feelings that prompted you to leave behind the cookie-cutter culture of the States.We’ve outlined some of the major differences between the two countries below, but don’t take our word for it. The best decision-making tool is your own observation. Plan a trip, and check things out for yourself.
Cost of Living
In this category, the advantage goes to Ecuador. In most parts of the country, you can easily get by on about $1,200 per month, including rent. This number gets even lower the further you venture into the rural areas where monthly rent can run as low as $150 per month. Combine that with an average cost of $1.90 for a four course meal, $1.50 for a gallon of gas, and the help of a domestic servant for a mere $10 a day. While it is possible to get by on the same $1,200 in Panama, it would be with a standard of living that more closely resembled that of the locals.
Real Estate
While Ecuador wins this one for its low cost homes, Panama may have a slight edge when it comes to the ease of the entire process. New homes in Ecuador are well below the $100/square foot price. That’s half the price of comparable homes in Panama, although the construction is different. Homes in Ecuador are built of cement and red clay.
The home buying process is easier in Panama, where international banks are quick to offer financing to foreign residents. Closing costs are twice as high in Panama (around 6%). However, property owners in Panama may be exempt from property taxes for a number of years if the home is their only residence.
Transportation
The infrastructure of Panama closely resembles that of the U.S., and its roads are much more well-maintained. Other than that, there’s little difference between the two countries. Ecuador offers several options for public transit, including buses and taxis, that average around $1 per hour. However, they may not be the safest options (See Safety below.) Panama offers similar modes of transportation for a slightly higher premium. Both countries offer convenient direct flights to several U.S. hubs from a few key cities.
Health Care
While health care in both countries is better than you’d expect, the quality may be slightly higher in Panama, particularly in David and Panama City. Panama boasts many private hospitals with English-trained and English-speaking doctors. In both countries the cost is lower than U.S. health care, up to 90% lower in Ecuador where doctors will even make house calls for less than $25. Both countries also offer a variety of health insurance options for foreigners.
Familiarity
Now here’s where personal preference really plays a big factor. While we can’t say which countries earns the most points in this category, we can tell you which one most closely resembles the culture of the U.S. It’s Panama. With a much larger and more established expat community, Panama will initially feel the most like home. It’s up to you to decide whether that’s the atmosphere you’re seeking.
Both countries use the U.S. dollar, so there’s little risks associated with currency exchange. English is widely spoken in both, although in Ecuador it’s largely confined to touristy locations and international business areas. Both are also home to many U.S.-based restaurant chains and other franchises. Modern conveniences are found in both, although internet service is reportedly much better in Panama. It’s true in both countries that communication is more accessible the closer you are to the larger cities.
Boquete, Panama photo by Ken Mayer
Climate
While this factor also depends greatly on your own personal taste, most will probably prefer Ecuador for its more temperate and varied climate. Panama is mostly hot and humid everywhere with large amounts of rainfall, particularly in May through December, although it’s slightly lower on the Pacific coast than the Caribbean side. The only real difference in the country’s climate is in the higher elevations where the temperatures and rainfall both decrease. Some areas may see temps in the 50’s versus the 84 degree average near the coast.
Ecuador experiences a more diverse climate across its four main regions. The mountainous Andean Sierra boasts average temperatures of 75 degrees by day and around 60 at night. With a lot of sunshine, 12-hour days, and relatively low humidity, its climate is considered by most to be nearly perfect. Ecuador’s coastal region and the Amazon rain forest more closely resemble the climate of Panama: hot and humid all year with temps ranging from 80 to 95 degrees and year-round rain. The Galapagos Islands have much milder temperatures and less rainfall.
Culture
While Ecuador and Panama both have plenty of cultural attractions, the edge here goes to Ecuador. While both countries boast many activities and forms of entertainment, those in Ecuador are often more authentic and less Americanized. With over 28 indigenous groups speaking more than 10 languages, evidence of the country’s heritage fills the marketplaces and festivals that abound in the South American nation. Panama is also a culturally rich country, but often in the form of museums and shopping districts.
Residency and Retirement Benefits
Panama wins this one, hands down. Requirements for a pensioner’s visa are similar between the two ($1000 per month income in Panama versus $800 in Ecuador). However Ecuador offers very few incentives for retirees. Panama, on the other hand, boasts a long list of discounts for those who qualify for its pensioners program. This includes savings of between 10 to 50 percent on virtually every category of goods and services including utilities, closing costs, entertainment, travel, and even health care. In addition, retirees can import up to $10,000 in household goods duty-free, as well as a personal vehicle every two years. And retirement in Panama has never been easier. Recent legislation has expanded its residency program to include individuals who may seek employment upon relocation, at least for citizens of the 47 “Specific Countries” on its list. This change was implemented to counteract the current labor shortage in the country.
Investment Potential
Buying property in both Panama and Ecuador can be a good investment. Since Ecuador generally offers more affordable options, its homes often have more potential for appreciation. However, even more advantageous than buying a home is the opportunity to invest in land in some of the more remote areas where expats are only just beginning to develop an interest. For those savvy enough to get in during the early stages, there’s much money to be made once development begins.
Investing in land won’t get you quite as far in Panama. Since expat communities there are more established, the lots are more expensive. You’d best build if you want to turn a profit. Panama does, however, have a much better rental market than Ecuador and more property management companies to provide assistance. Properties in Panama consistently experience higher occupancy and rent for a high premium.
Safety
While both countries have areas that are safer than others, Panama is definitely the safest overall. In fact it’s one of the safest in Central America, experiencing less violent crimes in a year than New York City does in a day. The country also saw the addition of the Tourism Police Force in 1992, which was specifically established to assist tourists in Panama City. Conversely, Ecuador is plagued with a murder rate of 19 people per every 100,000, four times that of the U.S. Even more alarming is the fact that much of the country’s violent crime occurs in areas heavily populated by tourists. Public transportation, especially taxis, are prime targets for criminals. It’s recommended that all taxis be radio-dispatched. Don’t just hail one on the street.
Schools
Panama wins again, with free public education that is a requirement for children ages 6 through 15. Investments are currently being made into the education system, to increase the number of educated adults in the workforce due to the labor shortage mentioned previously. Several good private schools also exist, many of which are bilingual. By stark contrast, Ecuador’s education system is in the bottom 50 world-wide. While it does have some private school options, most aren’t truly bilingual, only teaching English as a second language.
Things to Do
There is no shortage of activities in either Panama or Ecuador, and we would be hard-pressed to award this category to one country over the other. Both have options for exploring nature, such as whale or bird watching. There are also plenty of opportunities for adventure, like hiking or rafting. No matter what you’re into, you’re sure to find a place to enjoy your favorite hobby or perhaps develop a new one.