Invest in Panama
Panama City is one of the least expensive first world cities in the world. It is also among the most modern and prosperous cities in Latin America with more than 3 million inhabitants. The variety of tall skyscrapers in the city is reminiscent of Miami. It has stores where almost any product from the US can be easily found.For the past few years, Panama has consistently been ranked in the top ten retirement locations around the world. A welcoming community, a safe environment, low crime statistics, excellent incentives for retirees, along with the natural beauty and ethnic diversity that is Panama, attract the growing number of baby boomers from North America and Europe who are looking for a different option. for The time to invest in real estate in Panama is now!
US dollar: world reference currency. Little or no fluctuation in the exchange rate against Middle Eastern currencies. The cost of living is significantly lower than in Western Europe.
Economic climate: The trend towards an open economy and possible trade agreements with nations such as the United States and Mexico are conducive to investment in Panama. There is also no expropriation or government interference as in many Latin American countries. A business-oriented government encourages foreign investment. A government that realizes the value of private companies to a developing country supports all investments. In 1946, Panama’s business mindset led to the creation of the Colon Free Zone, considered the second largest free trade center in the world, after Hong Kong. In addition, the Panamanian government offers foreigners who invest in Panama many attractive incentives such as legal residency and tax privileges.
Tax on capital gains: Since the enactment of Cabinet Decree No. 109 (1970), successive laws have been passed offering tax benefits to developers. It has been widely accepted that as a result of these incentives, buyers of real estate, land and properties have also benefited. This tax is applicable, if the alternative of 2% of the Patrimonial Transfer Tax is used for the transfer of real estate and if there is a capital gain. This tax is also regulated by article 699 and for companies that act as sellers, the payment of a single rate of 30% on the profit will be applied, however, if the shareholders are foreigners. Another percentage will be applicable if the seller is a natural person. If there is no capital gain on the transfer of a property, the 2% transfer tax, paid in advance on the sale, will be lost as a credit to the seller.
Why retire in Panama: Panama has the best incentive program in the world for retirees or foreign pensioners. In fact, anyone over the age of 18 can apply for and qualify for a pension in Panama.
Some of the great retirement benefits are:
Import of all your personal and household belongings up to US $ 10,000 tax free. Right to import a car every two years tax-free The following benefits are for those seeking to retire in Panama:
50% discount on mortgage loan closing costs.
25% discount on national and international air tickets.
50% discount on hotel accommodation from Monday to Thursday
10% discount on prescription drugs (which are inexpensive to start with)
15% discount on dental and vision exams.
30% discount on bus, boat and train fares.
25% discount in restaurants
15% discount in fast food restaurants
20% Doctor visits and surgery
50% discount on entertainment including movies, concerts and theater every day.
In Panama, all banks (required by law) have special express lines for withdrawals. The greatest of all the benefits of retiring in Panama is that you can hire a full-time maid for less than $ 300 a month.
Popular investment areas:
Panama City has become a modern and cosmopolitan metropolis – there are many fantastic real estate opportunities in Panama with high rise buildings overlooking the ocean and the Bay of Panama. Exclusive residential areas such as Marbella, Paitilla, Coco del Mar, David, Punta Pacifica and San Francisco offer a good variety of apartments and condos for sale. Suburban residential areas in the former Canal Zone such as Amador Heights, Balboa, Albrook, and Clayton offer large, attractive single-family homes and condos.
Casco Viejo, the oldest city on the Pacific coast of the Americas, has become a desirable location for real estate investment, encouraged by investment incentives from the Panamanian government in Casco Viejo for the restoration of the historic Casco Viejo district.
Outside of Panama City, there are beautiful real estate located in popular destinations such as Chiriquí, El Valle, and Altos de María. Known primarily for its cooler climates, incredible flora, and a calm and peaceful environment, real estate in the highlands of Panama is ideal for those interested in retiring abroad.
Bocas del Toro is another popular destination for real estate in Panama. Best known for its crystal clear waters, rich Antillean culture, unique overwater architecture, and laid-back tropical atmosphere. In recent times, Bocas del Toro has become a booming hub for European and American expats, as well as an impressive number of tourists.
Real estate values in Panama and mainly in these areas of the Pacific coast beach have appreciated very steadily, and as interest and growth increase, so do real estate values.
Price Ranges: Panamanian government incentives for the restoration of Casco Viejo’s historic district encourage investment here, this area reminiscent of New Orleans or the Soho of years ago abounds with layers of elegant buildings crying out for a makeover. Outside of Panama City, excellent real estate is available to developers and individuals. The more remote the location, the more reasonable the cost, but keep in mind that it may be far from public services or roads.
The real estate in Bocas del Toro offers a beautiful property on the Caribbean beach. Here, golden sands lined with palm trees surround the islands and turquoise waters where the rainforest meets the ocean. Here families shop by boat, enjoy water sports and the natural beauty of this wonderful place; better yet, it is still affordable.
Budget guide: Prices per square meter in Panama vary according to location (city, mountain, beach). In the city, you can find prices starting at $ 1000 per square meter for a new condo. On the mountain the price can drop to $ 20 … yes this is not a typo, however in those cases you may want to research the accessibility to this property. Many mountain areas do not have access roads and local transportation may not be available. On the beach, prices depend on the area. One hour from the capital, prices start at $ 600 per square meter depending on the quality of the beach and the neighborhood.
Fees for services: Fees charged by the Notary Public and the Public Registry that add up to a total of $ 200 to $ 300 for registering a purchase agreement for the sale of real estate in Panama. For example, if the property is in the personal name of the seller and the buyer is transferring title to a Panamanian corporation (most recommended), then closing costs would include;
(1) the legal property transaction fee of US $ 1,200 (includes; title search, purchase / sale contract, closing, and property title transfer service),
(2) Public registry title transfer fees of approx. US $ 200 to US $ 300,
(3) escrow fees of 0.5% to 1% of the transaction amount (varies depending on the transaction amount), and
(4) US $ 1000 incorporation fee to establish the Panama corporation.
However, if the property is already in the hands of a Panama corporation and the buyer is purchasing the corporation’s shares, then the transaction is relatively simple because there is no record of title transfer, which means there is no transfer tax. of title and not public registry title transfer fees. In this case, the closing costs would include;
(1) the legal ownership transaction fee (includes; title search, stock purchase agreement and closing for US $ 800),
(2) change of directors / resident agent of the corporation (approximately $ 350), and
(3) Escrow fees of 0.5% to 1% of the transaction amount (varies depending on the transaction amount).
Notary and public registry costs amount to approximately $ 200 to $ 300, depending on the particular transaction. Title transfer taxes are normally paid by the seller. Escrow fees (if using an escrow company) are typically paid by the buyer and range from half one percent (0.5%) to one percent (1%) of the transaction .
Mortgages: Between 60% and 70% of the purchase price or appraisal market value, whichever is lower. Interest rate from 5.5% to 6.5%, plus FECI 1% per annum.