Thursday, July 16, 2009

Retirement: Why Panama Is the New Florida

Murdock and Johnson on the beach near their home in San Carlos Jeffrey Salter/Redux

Michelle Conlin

Prospective retirees: Panama wants you. The pitch? A plane ride just 21/2 hours from Miami enables the newly poor to swap a wretched retirement in the U.S. for one befitting a royal in the balmy Central American nation. Cash out! Emigrate! Feel rich! Panama—the new Florida.
Spin aside, Panama is increasingly popular among retirement-age types looking to hedge against—or skip out on—the recession. The Migration Policy Institute, a Washington-based think tank that studies the movement of people around the world, says the chief factors prodding professional-class Americans to flock to Panama include its First World health care available at Third World prices and the country's pensioner program, which offers some of the deepest retiree discounts in Latin America. Seniors get up to half off on nearly everything, including movies, motels, doctors' visits, plane tickets, professional services, and electric bills. Expats also pay no tax in Panama on foreign income. Nor are they required to pay property tax for the first 20 years.
The fact that a luxe beachfront manse can be had for the same price as a dump in Daytona doesn't hurt, either. "We would have been looking at $3 million in Miami," says Jon Nickel of his 3,000-square-foot oceanfront penthouse in Panama City. Nickel and his wife, Gretchen, bought the place in late 2007 for $250,000, right after Nickel retired from his corporate law job in Portland, Ore., and sold the family's mortgage-free home for $800,000.
The skinny isthmus—nearly all coastline, with a mountain range slicing through the middle—boasts some of the best weather and lowest crime rates in Latin America. Other draws include guilt-free conspicuous consumption, with laughably low prices—by gringo standards—on splurges such as a day of beauty ($10) and a maid ($15 a day).
That's not to say life there suits everyone. Things in Panama movereallyslowly. A repairman who says he will be right over might show up days later. Water and electricity service can be spotty. In Panama City, drivers treat stop signs as a mild suggestion. "It takes a little bit of balls to retire here," says Matt Landau, a New Jersey native who is the founder of Panama City-based online portal The Panama Report. "This is not for type As. It's not your turnkey Florida retirement."
Still, boomers who have recently relocated to Panama say they feel as if they have figured out a successful geographic arbitrage. When Stephen Johnson and Linda Murdock were living in Aromas, Calif., they used to moan half-jokingly about how they'd have to retire to Barstow—the armpit of the Mojave Desert, with summers in excess of 100 degrees and winters that can dip below freezing.
Stephen, 63, retired as an executive of the Salinas Valley Solid Waste Authority in June 2008. His wife, Linda, 57, owned a dog-food business.
The pair had watched several friends retire on depleted cash cushions. Many weren't fully eligible for Medicare and wound up spending 50% of their income on health care. The couple's retirement agita was worsened by the fact that they got a late start building equity. "We bought our first house when I was 40 and Steve was 46," says Linda. "We knew we would never have our house paid for by retirement."
Over late-night pinot noir on their patio, they started talking about moving to a developing nation to stretch their money further. They had discovered Panama on a trip there in 2004 and saw it as a bargain-basement paradise. The low cost of living appealed to Steve, whose pension amounted to 40% of his pre-retirement income of $150,000. The surf-perfect weather lured Linda, who took up the sport on her 50th birthday.
Johnson and Murdock are now known as the gringos who live in the house with the red door. They bought their newly remodeled 1890 hacienda near the beach in San Carlos for $100,000 cash. They moved in last year and rented out their California ranch house. The rent covers the carrying costs on that house.
But Panama isn't only about the beach. The Boquete region in the mountains—Panama's answer to Boulder, Colo.—boasts loads of U.S.-style gated retirement compounds. The big draws of the area are tennis and golf. For those who are more interested in urban amenities, Panama City, which is by the sea, is sprouting yoga studios, bohemian boutiques, health-food stores, and artsy coffee houses.
Still, there are tradeoffs in this seemingly easy life. "Paradise is just a place you visit," says Johnson. "If you live here, you begin to see the cracks." Those include the three months it took them to get their driver's licenses—a process that involved blood tests, a hearing exam, and lines that make a U.S. Motor Vehicles Dept. seem like a fast-food joint.
But Johnson and Murdock have no major complaints, and Panama is certainly better than the Mojave. Murdock surfs—every single day—and says Johnson looks 20 years younger since retiring. They both love the way their dog can run on the beach without a leash and the fact that their doctors, many of them schooled in the U.S., happily give out their cell-phone numbers and actually answer when called. And their social life is far more active than it was in Aromas. They go out with new friends, a blend of expats and natives, almost daily, often for evenings of fish tacos and endless margaritas—for $20. "We have more time," says Johnson. "And apparently we have more money."
Conlin is the editor of the Working Life Dept. at BusinessWeek.
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Tuesday, April 28, 2009

Advantages to Investing in Real Estate in Panama

Foreigners will find that Panama has special regulations which favor investments in real estate.   Unlike other tourist destinations, foreigners and nationals can:
  • Buy almost all kinds of property (except for the rainforest 5km way from the border)
  • Own property through shares in corporations, private foundations and trusts
  • Open bank accounts in US dollars free from exchange conversion loss, as well as in euros and other hard currencies
  • Live without having to file Panama tax returns as long as they are not making an income from their Panama property or their activities inside Panama
  • 5 to 20 year property tax holidays, depending on the date of construction of improvements.Foreigners have the added advantage of bilateral investment treaties with the U.S., France, United Kingdom and most European countries which further ensure protection of their investments in Panama.

Just as with any investment, proper due diligence is necessary before paying for any property - even before that first downpayment. A savvy buyer must verify that the seller is the true owner of the property for sale and that no restrictions or liens forbid its sale. The first payment must be accompanied by a written agreement describing the property and executed by a seller property authorized to do so under local law. Appropriate counsel can assist in avoiding unnecessary delays in the transfer of title.

European, Canadian, US and citizens of several Asian countries can stay in Panama with tourist visas for up to 90 days. Full residency is granted to foreigners:

  • Investing US$160,000 in a Panama non-retail business and effectively employing 5 Panamanians,
  • Holding a US$300,000 CD time deposit (plazo fijo) account in a Panama bank for at least 3 years or in the National Bank yielding US$2000.00 monthly for 5 years,
  • Buying a house in Panama mortgage-free for US$300,000 and/or a mixture of the house paid for and time deposit for at least 3 years totalling US$300,000,
  • Investing at least US$60,000 to buy at least 10 hectares of rainforest for reforestation
  • Earning a pension from a social security or any foreign government pension authority above US$1,000.00 monthly as Pensioner ("Pensionado").
Other residence categories exist that are applicable to foreigners sponsored by local employers or educational institutions as part of a foreign worker quota of no more than 10% per company or who marry a Panamanian spouse. Residents for 5 years can apply for naturalization as Panama citizens and have a Panama passport.

Information is valid as of 9/2/2008 and is subject to changes. More information is available from Alvaro Aguilar aaguilar@ Tel. +507 340-6444 / 6638-8707

LOMBARDI AGUILAR & GARCIA - Aquilino de la Guardia St. Ocean Business Plaza, 12th Floor, Panama City, Panama
Tel: +507 340-6444 - Fax: +507 340-6446 - P.O.Box 0831-1110 -

Lombardi Aguilar Group is a civil law partnership registered in Panama with registered number SC-25029 and its members are regulated by the Panama Bar Association

This information is not meant to provide any legal advice. Foreigners are always subject to the laws of their countries of citizenship or residency and should seek appropiate additional counsel in their countries. This information is not intended or written to be used, and may not be used, for the purpose of (i) avoiding tax-related penalties under tax regulations or (ii) promoting, marketing or recommending to another party any tax-related matters addressed herein.

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Saturday, January 17, 2009

Ocean views at unbeatable prices

Situated in the up and coming area of Parque Lefevre, this project offers investors excellent value in a great location. Parque Lefevre is located between San Francisco and Panama Viejo, site of the 16th century historic ruins of the old Panama City. Property values are rising in this neighbourhood but will most definitely continue to go up. Supermarkets, pharmacies, dry cleaners, even a top notch shopping mall are all just a quick 10 minute drive away.

The Prisma condominium will be 14 stories high and offers 3 apartment models ranging from 61 to 87 sqm. The building will have restricted access with 24/7 security. All apartments have balconies and enjoy a view over the Pacific Ocean or the City of Panama. The 61 sqm apartment model offers 2 bedrooms and 1 bathroom and the 67 sqm apartment model offers 2 bedrooms and 2 bathrooms. The 87 sqm apartment will offer 3 bedrooms and 2 bathrooms. All models have a living room, dining room, kitchen and laundry area. The social area boasts a swimming pool, events room, gym, children's playground and barbeque. All apartments come with one parking spot.

Key Investment Points:

- Minutes from downtown Panama City
- High resale value and demand due to low density of single-home units
- Investor-friendly landholding corporation regime and 15-year property tax regime
- 15 minute drive from commuter airport and Panama's largest shopping mall
- New construction
- Financing up to 70% possible

Two Bedrooms 61m² to 67m² €50,966 to €60,000
Three Bedrooms 87m² to 87m² €70,000 to €80,000
Consult with your real estate agent.

Sunday, January 11, 2009

Between the Rainforest and the City

Single home from € 963,000. Camino de Cruces, Friendship Road, close to El Dorado and new US Embassy. 2 levels, 3 bedrooms, 3 bathrooms, maid r/b, large backyard with pool, surrounded by vegetation. In gated community with 24hr guard. Sold only with furniture.

Land: 1,022.44 sq m / 11005.452 ft². Santa Monica model home 397.27 sq m / 4276 ft. Built in 2005.

Call +507 270-0864 or +507 6617-3321.

Features: Roofed Parking, Maids Quarters, 24 hour Security, Laundry, Storage, Garden or Park, Kids Park, Air Conditioner, Patio, Central Air Conditioner, Corner Property, Roofed Garage, Living room & Dinning room
Appliances: Refrigerator, Microwave, Stove, Dishwasher, Instant Hot Water Dispenser, Washer, Dryer
More pictures downloadable here
Google Earth coordinates 9.011289648163606,-79.54334242864977

Plans Lower Level

Backyard and pool

Living room and furniture