Complete Guide to Moving to Panama in 2026

Panama is the country that was literally built to connect the world. The canal that splits the continent also splits the difference between Latin America and something closer to Miami — a dollarized economy, a skyline full of glass towers, direct flights to dozens of US cities, and a tax system that the IRS can only dream of dismantling. There is a reason Panama has been a top relocation destination for retirees, entrepreneurs, and remote workers for decades: the fundamentals are nearly impossible to beat.

The US dollar is the national currency. Foreign income is not taxed. The Pensionado visa gives retirees discounts on everything from movie tickets to medical bills. The Friendly Nations Visa offers a fast track to permanent residency for citizens of over 50 countries. And the cost of living, while not Southeast Asia cheap, delivers a first-world lifestyle at a fraction of what you would pay in the US, Canada, or Western Europe.

But Panama is not a postcard. The rainy season — mid-April through December — is intense. Banking as a foreigner can be a months-long ordeal. Panama City traffic is genuinely terrible. Spanish is essential once you step outside the expat corridors. And the country’s income inequality means that gleaming Punta Pacifica condos sit blocks from neighborhoods with real poverty.

This guide covers the real Panama: visa pathways, true costs, healthcare quality, neighborhood-by-neighborhood breakdowns, the tax system that draws people here, and the practical realities that determine whether you will love it or leave. At WhereNext, we score every country across data-driven dimensions using institutional sources. Explore the full Panama country profile for real-time data, or keep reading for the complete analysis.

See how Panama compares in our best countries to retire abroad rankings, or explore options for digital nomads.

Why People Move to Panama

Panama consistently ranks among the top relocation destinations in the Americas, and the reasons are structural, not trendy. This is not a country that appeared on Instagram last year — it has been attracting expats since the Canal Zone era, and the modern version of that appeal is built on hard economic advantages.

Hub of the Americas

Panama’s geography is its first advantage. Tocumen International Airport (PTY) is the largest hub in Central America, operated by Copa Airlines with direct flights to over 80 destinations across North America, South America, the Caribbean, and Europe. You can fly nonstop to Miami in under 3 hours, New York in 5.5 hours, or Los Angeles in 6 hours. For anyone maintaining business or family ties in the US, that connectivity is hard to match from any other Latin American country outside Mexico.

US Dollar Economy

Panama adopted the US dollar as its official currency in 1904 (the local balboa exists on paper but is pegged 1:1 and only minted as coins). This is an enormous practical advantage that most people underestimate until they live in a country with currency volatility. There is no exchange rate risk. Your US bank account, credit cards, Social Security payments, and pension deposits work seamlessly. You never wake up to discover your rent effectively went up 15% because the local currency collapsed — a real risk in countries like Argentina, Turkey, or even Colombia during volatile periods.

Territorial Tax System

Panama taxes only income earned within Panama. If your income comes from the US, Europe, or anywhere else outside Panama’s borders, you owe Panama exactly zero. No income tax. No capital gains tax on foreign investments. No worldwide taxation. This is not a loophole — it is the explicit, codified tax policy of the country. Combined with the US dollar economy, this makes Panama one of the most financially efficient places on earth for retirees living on pensions, remote workers earning from foreign clients, and entrepreneurs with international businesses.

Established Expat Infrastructure

Panama is not pioneering territory. Tens of thousands of expats from the US, Canada, Europe, and Venezuela have been living here for years. That means established English-speaking communities, bilingual doctors and lawyers, real estate agents who understand foreign buyers, international schools, and the practical infrastructure — from grocery stores stocking familiar brands to Facebook groups with vetted service providers — that makes the transition from “tourist visiting” to “person actually living here” dramatically smoother.

Visa & Residency Options

Panama has some of the most expat-friendly immigration policies in the Americas. There are multiple pathways depending on whether you are retiring, investing, working remotely, or starting a business. The bureaucracy is real — expect the process to take 3 to 6 months with a local immigration lawyer — but the requirements are clear and the outcomes are reliable.

Pensionado Visa — The Gold Standard

Panama’s Visa de Jubilado o Pensionado is consistently ranked as the best retirement visa in the world, and for good reason. The income requirement is just $1,000 per month from any government or private pension, Social Security, or qualified retirement plan. That is it. No age minimum, no massive investment, no net worth threshold.

What makes the Pensionado truly exceptional is the legally mandated discount package that comes with it:

• 25% off domestic airline tickets
• 25% off restaurant meals (Mon–Thu)
• 25% off utility bills (electricity, water, phone)
• 15% off hospital bills
• 10% off prescription medications
• 20% off medical consultations
• 50% off hotels (Mon–Thu)
• 30% off public transportation
• 50% off entertainment (movies, concerts, sports events)
• 15% off dental and eye exams

These are not theoretical discounts. Businesses are legally required to honor them when you present your Pensionado carnet (ID card). Some restaurants and services try to avoid it, but compliance is widespread, especially in Panama City and established expat areas. The savings add up to hundreds of dollars per month for an active retiree.

Requirements: proof of pension income of at least $1,000/month, clean criminal background check from your last country of residence (apostilled), valid passport, health certificate, and typically 4–6 passport-sized photos. An immigration lawyer (abogado de inmigración) is effectively required and costs $1,500–$3,000 for the full process.

Friendly Nations Visa

The Visa de Países Amigos (Friendly Nations Visa) is Panama’s fastest pathway to permanent residency for citizens of roughly 50 countries that maintain friendly economic and diplomatic ties with Panama. The list includes the US, Canada, the UK, all EU member states, Australia, Japan, South Korea, and most other developed nations.

Requirements are straightforward:

• Bank deposit: open a Panamanian bank account and deposit at least $5,000 USD (this is your money — you can use it after residency is granted).
• Economic tie: either a letter of employment from a Panamanian company, ownership of real estate in Panama, or formation of a Panamanian corporation. The bank deposit plus a corporation (which costs approximately $1,500–$2,000 to set up through a lawyer) is the most common route for self-employed individuals.
• Standard documents: apostilled criminal background check, passport, health certificate, and proof of economic activity.

The Friendly Nations Visa grants permanent residency — not just a temporary permit. After five years of permanent residency, you are eligible for Panamanian citizenship. Processing typically takes 3–6 months, though delays are common. Budget $2,000–$4,000 for legal fees.

Short Stay Visa (Remote Workers)

Panama does not have a formal “digital nomad visa” like Colombia or Portugal, but the Short Stay Visa serves a similar purpose for remote workers who want to stay beyond the standard 90–180 day tourist allowance. Citizens of many countries can enter Panama visa-free for 90 to 180 days and then extend or transition to a residency visa. For longer stays, the Friendly Nations Visa is the practical pathway most digital nomads use — the $5,000 deposit is low and you get permanent residency rather than a temporary permit.

Qualified Investor Visa

Investing at least $300,000 USD in Panamanian real estate or a fixed-term deposit at a Panamanian bank qualifies you for the Qualified Investor Visa. This grants immediate permanent residency. Real estate is the most common route — Panama City condos in desirable neighborhoods like Punta Pacifica, Costa del Este, or Casco Viejo often start around $200,000–$350,000, making this pathway realistic for anyone buying property anyway. The investment threshold was raised from $160,000 in recent years, so verify the current amount with a local lawyer.

Self Economic Solvency Visa

This visa requires a $300,000 USD investment in Panamanian real estate, a fixed-term bank deposit, or a combination of both. Unlike the Qualified Investor Visa, this pathway is designed for individuals who want to demonstrate economic self-sufficiency without necessarily being retired or employed. It grants a two-year temporary residency that can be converted to permanent residency.

Cost of Living

Panama’s cost of living sits in the sweet spot: significantly cheaper than the US or Western Europe, more expensive than Southeast Asia or parts of Mexico, and priced in US dollars so you never worry about exchange rate fluctuations. The range varies dramatically by location — Panama City is a modern capital with corresponding prices, while beach and mountain towns offer genuine affordability.

A single person can live comfortably in Panama City on $1,500 to $2,500 per month, including rent, food, transport, health insurance, and entertainment. In smaller towns like Boquete, Coronado, or Pedasí, that range drops to $1,000 to $1,800 per month. A couple should budget roughly 50–60% more than the single-person figures.

Rent

Rent is your largest expense and varies widely. In Panama City’s upscale neighborhoods — Punta Pacifica, Costa del Este, San Francisco — a furnished one-bedroom apartment runs $900 to $1,400 per month. In mid-range areas like El Cangrejo or Bella Vista, you can find the same for $600 to $900. In Casco Viejo (the restored colonial quarter), renovated apartments start around $800 to $1,200 but the character and walkability are hard to beat.

Outside the capital, rent drops significantly. In Boquete, a two-bedroom house with mountain views runs $500 to $900 per month. In Coronado, a furnished condo near the beach goes for $600 to $1,000. In Pedasí, a smaller town on the Azuero Peninsula, rentals start as low as $400 to $700.

Food & Dining

Groceries are reasonable but not dirt cheap. A weekly supermarket run for one person costs $50 to $80 at chains like Riba Smith or Super 99. Imported items (cheese, wine, specialty products) are pricier due to import duties. Local produce — tropical fruits, vegetables, chicken, seafood — is affordable and excellent.

Dining out is where Panama shines. A menu del día (set lunch) at a local fonda costs $3.50 to $6. A meal at a mid-range restaurant runs $8 to $15. Fine dining in Panama City — and there are genuinely excellent restaurants, especially in Casco Viejo — costs $30 to $60 per person, about half what you would pay for equivalent quality in New York or San Francisco.

Transportation

The Panama Metro (two lines as of 2026) is modern, air-conditioned, and costs $0.35 per ride. Buses run throughout the city for $0.25 to $0.50. Uber and Cabify are widely used, and a typical cross-city ride in Panama City costs $3 to $6. Taxis also operate everywhere — always agree on the fare before getting in, as meters are uncommon.

If you plan to live outside the capital, a car is practically essential. Used vehicles are expensive in Panama (imported, with duties), and a reliable used sedan starts around $8,000 to $12,000. Gasoline is approximately $3.50 per gallon. The Pan-American Highway connects Panama City to David (about 6 hours) and is in good condition, but secondary roads range from adequate to unpaved.

Healthcare

Panama’s healthcare system is one of its strongest selling points for retirees and expats. The quality of private care in Panama City rivals anything in the US, the costs are 40 to 70 percent lower, and medical tourism is a growing industry that brings in patients from across the Americas.

Hospitals & Quality

The crown jewel is Hospital Punta Pacífica, a Johns Hopkins International–affiliated facility in Panama City’s Punta Pacifica district. It is the only Johns Hopkins–affiliated hospital in Latin America, and the quality of care — English-speaking doctors, modern equipment, international standards — is genuinely world-class.

Other top facilities include:

• Hospital Nacional: one of the largest private hospitals in Central America, with comprehensive specialist departments and a strong reputation for cardiac and orthopedic surgery.
• Clínica Hospital San Fernando: a major private hospital with 24/7 emergency services and a full range of specialties. Popular with expats in the El Dorado and Albrook areas.
• Hospital Santo Tomás: the main public hospital. Quality is lower and wait times are longer, but it provides free emergency care. Expats generally use it only for emergencies and rely on private facilities otherwise.

Outside Panama City, healthcare quality drops significantly. David has Hospital Chiriquí, which handles most medical needs for the Boquete area but lacks the specialist depth of capital hospitals. For serious medical issues, most expats in interior towns plan on traveling to Panama City — which is one reason proximity to the capital matters when choosing where to live.

Health Insurance

Private health insurance in Panama costs $100 to $250 per month depending on your age, coverage level, and deductible. For a healthy 40-year-old, comprehensive coverage with a $1,000 deductible runs approximately $120 to $180 per month. Premiums increase with age, and coverage above 65 to 70 can be harder to obtain or significantly more expensive.

Major local insurers include ASSA, Mapfre, and Pan American Life Insurance. International plans from providers like Cigna Global, Aetna International, or Allianz Care are also available and make sense if you split time between Panama and other countries. Panama also has a public healthcare system (CSS — Caja de Seguro Social) that residents can access by paying into the social security system, though most expats prefer private care for shorter wait times and English-speaking staff.

Cost example: a specialist doctor visit at a private hospital costs $40 to $80. An MRI costs $200 to $400 (vs. $1,000–$3,000 in the US). Dental cleanings run $30 to $60. Prescription medications are typically 50 to 80% cheaper than US prices, and many drugs that require a prescription in the US are available over the counter in Panama.

Where to Live in Panama

Panama’s relatively small size (roughly the area of South Carolina) means you can access most of the country from Panama City within a day. But the lifestyle differences between locations are enormous — from the urban density of the capital to the mountain cool of Boquete to the Caribbean island vibe of Bocas del Toro. Here is the honest breakdown of each major expat destination.

Panama City

The capital is where roughly 70% of Panama’s expats live, and for good reason. It is the only city in Central America with a genuine skyline, a metro system, international restaurants, world-class hospitals, and direct flights to 80+ destinations. The neighborhoods that matter for expats:

• Punta Pacifica: the upscale high-rise neighborhood on the coast, anchored by the Trump Ocean Club tower and Hospital Punta Pacífica. Modern condos with ocean views, doormen, pools, and gyms. Rents: $1,000–$1,800 for a furnished 1BR. Best for professionals and retirees who want a luxury urban lifestyle.
• Costa del Este: a planned suburban-style community east of the city center with shopping malls, parks, international schools, and newer condo developments. More family-oriented than Punta Pacifica. Rents: $900–$1,400 for a 1BR. Best for families and those who want more space.
• El Cangrejo: a walkable, mid-rise neighborhood with a diverse mix of restaurants, shops, and the city’s Chinatown nearby. More local flavor than the high-rise areas, with genuinely good value. Rents: $500–$800 for a 1BR. Best for budget-conscious expats and digital nomads.
• Casco Viejo: the restored colonial quarter on a peninsula at the entrance to the Canal. Cobblestone streets, historic architecture, rooftop bars, and some of Panama’s best restaurants. Beautifully gentrified, though the surrounding areas can be rough. Rents: $800–$1,200 for a 1BR. Best for culture-seekers and nightlife lovers.
• San Francisco / Obarrio: central residential neighborhoods with good walkability, dining options, and proximity to parks. More established than newer developments, with a mix of local and expat residents. Rents: $700–$1,100 for a 1BR.

Boquete

Boquete is a mountain town at 1,200 meters elevation in the Chiriquí province, about 30 minutes from the city of David and a 6-hour drive (or 45-minute flight) from Panama City. The climate is the defining feature: 18 to 27°C year-round, often called “eternal spring.” No air conditioning needed, ever. The surrounding cloud forest produces some of the world’s best coffee (Geisha coffee from Boquete sells for over $100 per pound at auction).

Boquete has been Panama’s premier retirement destination for over two decades, and the expat community is large, organized, and English-speaking. There are established expat clubs, volunteer organizations, weekly markets, hiking groups, and a social infrastructure that makes it easy to build a network quickly. The town itself is small — walkable in an afternoon — with restaurants, cafes, a handful of small supermarkets, and the essential services a retiree needs.

Trade-offs: healthcare is limited (Hospital Chiriquí in David handles most things, but serious cases go to Panama City). Entertainment options beyond hiking, birding, and community events are limited. The rainy season (May–December) brings heavy afternoon showers. And the expat community, while welcoming, skews older — if you are under 50, you may find the social scene limiting.

Coronado

Coronado is a beach community about 80 kilometers west of Panama City on the Pacific coast — roughly a 90-minute drive. It is the closest established beach town to the capital and has the largest, most developed expat community outside of Panama City and Boquete. Think of it as Panama’s version of a Florida retirement community: gated neighborhoods, a golf course, a large community pool, shopping centers, and a Riba Smith supermarket that stocks American brands.

Rents are $600 to $1,000 for a furnished 1BR condo, and houses with pools start around $1,000 to $1,500. The beach is not world-class (Pacific beaches in this area tend toward dark sand and moderate waves), but the convenience, safety, and community infrastructure compensate. Best for retirees who want beach access without sacrificing the amenities of daily life.

Pedasí

Pedasí is a small town on the southern tip of the Azuero Peninsula, about 5 hours from Panama City. It is Panama’s emerging surf and slow-living destination, attracting a younger, more adventurous crowd alongside retirees who want genuine small-town charm. The town center is a handful of blocks with a church, a few restaurants, a small supermarket, and not much else — and that is the entire point.

The nearby beaches (Playa Venao, Playa Destiladeros) are excellent for surfing. Tuna fishing is world-class. The cost of living is among the lowest in the country — $400 to $700 for rent, $800 to $1,200 total monthly budget. But the trade-offs are real: limited healthcare, minimal nightlife, unreliable internet outside the town center, and a genuine remoteness that appeals to some and isolates others.

Bocas del Toro

Bocas del Toro is an archipelago of Caribbean islands on Panama’s northwest coast, near the Costa Rican border. It is Panama’s backpacker and budget traveler hub, with a growing contingent of remote workers and long-term residents. The vibe is Caribbean — reggae music, wooden houses over turquoise water, cheap lobster, and a relaxed pace that borders on completely unstructured.

Isla Colón (the main island, home to Bocas Town) has the most infrastructure: restaurants, bars, dive shops, small supermarkets, and the airport. Rents run $400 to $800 for basic to mid-range accommodation. Other islands (Bastimentos, Carenero) are quieter and cheaper but require boat access for everything. Internet is improving but still unreliable by city standards. Healthcare is basic — the nearest real hospital is in David, a 4-hour journey by boat and road.

David

David is Chiriquí province’s capital and Panama’s third-largest city. It is not a destination in itself — few people dream of moving to David — but it is the practical gateway to Boquete and the service center for the western highlands. David has the regional hospital, the main shopping centers (including a modern mall), the airport with daily flights to Panama City, and the car dealerships, banks, and government offices that Boquete lacks. Some retirees choose David over Boquete for the easier access to services, flatter terrain, and lower rents ($400 to $700 for a 1BR), accepting the warmer climate (32–35°C) as the trade-off.

Taxes — Panama’s Killer Feature

The territorial tax system is the single biggest reason many people choose Panama over other relocation destinations. It is simple, codified, and aggressively favorable for anyone whose income originates outside of Panama.

Territorial Taxation

Panama taxes only income earned within Panama. If you work remotely for a US company, receive a UK pension, earn rental income from a German property, or have dividends from an Australian stock portfolio, Panama does not tax any of it. Zero. This is not an exemption or a special program — it is the fundamental structure of Panama’s tax code.

For reference, Panama’s domestic income tax rates are progressive: 0% on the first $11,000, 15% on $11,000 to $50,000, and 25% above $50,000. But these rates apply only to Panamanian-sourced income. If you work for a local company or sell goods within Panama, you will pay these rates on that income. If all your income is foreign-sourced, your Panamanian tax liability is zero.

Property Tax Exemptions

Panama offers substantial property tax exemptions on new construction. Newly built properties (or those in their first transfer) receive tax exemptions that can last up to 20 years, depending on the assessed value and when the property was registered. After the exemption period, property taxes are modest: 0% on the first $120,000 of assessed value, 0.5% on $120,000 to $700,000, and 0.7% above $700,000. Compared to US property taxes (often 1 to 3% with no exemption period), this is remarkably low.

No Capital Gains on Foreign Assets

Capital gains from the sale of foreign assets — stocks, real estate outside Panama, cryptocurrency — are not taxed in Panama. Capital gains on Panamanian assets (primarily local real estate) are taxed at 10% of the gain, but there are exemptions for primary residences. For anyone with a significant investment portfolio, this is a major advantage.

US Tax Obligations

Important for Americans: the US taxes its citizens on worldwide income regardless of where they live. Moving to Panama does not eliminate your US tax obligations. However, you can use the Foreign Earned Income Exclusion (FEIE) to exclude up to $126,500 (2026 figure) of earned income from US taxation if you meet the bona fide residence or physical presence test. You can also claim the Foreign Tax Credit for any taxes paid to Panama on Panamanian-sourced income. For a detailed breakdown, see our expat tax guide.

Safety

Panama is one of the safer countries in Central America, a region that includes some of the highest homicide rates in the world. Panama’s murder rate is roughly 10 per 100,000 — comparable to the US and significantly lower than Honduras, El Salvador, Guatemala, or even Costa Rica’s recent uptick. For a realistic picture, safety breaks down by location.

Panama City

The neighborhoods where expats live — Punta Pacifica, Costa del Este, El Cangrejo, San Francisco, Casco Viejo — are generally safe for walking during the day and reasonably safe at night. Petty theft (phone snatching, pickpocketing) exists, particularly in crowded areas and on public transit. Common-sense precautions apply: do not flash expensive jewelry, keep your phone secure, use Uber at night rather than hailing taxis on the street.

Areas to avoid include parts of El Chorrillo (adjacent to Casco Viejo), Curúndú, and San Miguelito. These neighborhoods have higher crime rates and limited infrastructure. If you live in Casco Viejo, stick to the restored blocks and avoid wandering into the surrounding streets after dark.

Interior & Rural Areas

Towns like Boquete, Coronado, and Pedasí are genuinely safe. Petty theft from unattended properties occurs but violent crime against foreigners is extremely rare. Bocas del Toro has a slightly higher incidence of property crime and occasional drug-related issues, but it remains safe for visitors and residents who exercise normal caution.

The Darién Gap

The Darién Province on the Colombian border is off-limits for casual travel. The Darién Gap — the only break in the Pan-American Highway from Alaska to Tierra del Fuego — is dense jungle controlled by armed groups, drug traffickers, and increasingly a route for migrants heading north. There is no reason for an expat to go there, and you should not.

Digital Nomad Scene

Panama City has emerged as a serious option for remote workers, particularly those working with US clients who need timezone alignment. The city operates on Eastern Standard Time (UTC-5) year-round (Panama does not observe daylight saving time), which means perfect overlap with the US East Coast and only 2–3 hours behind the West Coast.

Coworking & Internet

Panama City has a growing coworking scene. Key spaces include:

• Selina Panama City: the global nomad brand has locations in Casco Viejo and other Panama spots, with coworking from roughly $15/day or $150–$200/month for a dedicated desk.
• WeWork Oceania Business Plaza: a full-service WeWork in the Punta Pacifica business district, with hot desks starting around $250/month. Good for professionals who want a corporate-grade environment.
• CocoWork: a locally operated coworking space in El Cangrejo with more affordable rates ($80–$120/month) and a community-oriented atmosphere.
• Cafés: Bajareque Coffee House (Casco Viejo), Unido (multiple locations), and Kotowa (Boquete-roasted coffee with a Panama City location) all offer laptop-friendly environments with solid Wi-Fi.

Internet speeds in Panama City average 50 to 100 Mbps for fiber connections, with providers like Cable Onda (now Tigo) and Claro offering residential plans from $30 to $60 per month. Outside the capital, speeds drop significantly — Boquete and Coronado typically get 10 to 30 Mbps, sufficient for video calls but not ideal for heavy uploads. Bocas del Toro and Pedasí have the least reliable connections.

Community & Networking

The digital nomad community in Panama City is smaller than in Medellín, Lisbon, or Mexico City, but it is growing and has the advantage of being less transient. Because many nomads transition to the Friendly Nations Visa and become residents, the community has more depth than places where people cycle through on 90-day tourist stints. Meetup groups, Slack channels, and regular events exist, particularly in Casco Viejo and El Cangrejo.

Practical Essentials

Banking — Plan Ahead

Opening a bank account in Panama as a foreigner is one of the most commonly cited frustrations among new expats. Panama’s strict anti-money-laundering regulations (a response to years of scrutiny after the Panama Papers scandal) mean that banks are cautious about foreign account holders. Expect to need:

• A reference letter from your current bank
• Proof of income or employment
• A local utility bill or rental contract as proof of address
• Your passport and residency permit (or visa in process)
• A personal reference from an existing bank client (some banks require this)

Banco General and Banistmo are the two largest local banks and the most commonly used by expats. Multibank and Global Bank are also options. The process takes 2 to 6 weeks even with complete documentation. Some expats maintain US bank accounts (Charles Schwab’s debit card, which reimburses ATM fees worldwide, is popular) as their primary account and use the Panamanian account for local transactions.

Language

Spanish is Panama’s official language and is essential for daily life outside expat bubbles. In Panama City’s international hotels, upscale restaurants, and expat-oriented services, English is widely spoken. In Boquete’s expat community, you can get by with English for social and commercial interactions. But once you step into a government office, a local mechanic’s shop, a public hospital, or a supermarket in any smaller town, Spanish is the working language.

Panamanian Spanish is clear and relatively easy to understand compared to Caribbean or Argentine Spanish. Locals are patient with non-native speakers. Investing in conversational Spanish — even basic proficiency — will dramatically improve your quality of life, your ability to negotiate (rent, services, repairs), and your integration into the community.

Driving

Driving in Panama City is an exercise in controlled chaos. Traffic is heavy, lane discipline is optional, turn signals are decorative, and the interchanges connecting the city’s major highways require local knowledge to navigate. Road conditions outside the capital vary from good highways to unpaved mountain roads. A foreign driver’s license is valid for 90 days after arrival; after that, you need a Panamanian license (requires a medical exam, eye test, and the standard bureaucratic process).

Climate

Panama is tropical, which means two seasons: the dry season (roughly mid-December through mid-April, locally called verano) and the rainy season (mid-April through mid-December). The rainy season does not mean constant rain — mornings are typically clear, with heavy downpours in the afternoon lasting 1 to 3 hours. Panama City temperatures hover around 28 to 33°C year-round with high humidity. Boquete’s elevation brings the temperature down to a comfortable 18 to 27°C.

Panama sits below the hurricane belt, so it is not affected by the Caribbean and Gulf hurricanes that hit Mexico, Honduras, and the US. This is a meaningful safety and insurance advantage for homeowners.

Residency Timeline

A realistic timeline from decision to settled:

• Months 1–2: scouting trip (2–3 weeks recommended). Visit Panama City, Boquete, and at least one beach town. Meet immigration lawyers, open the banking process, view apartments.
• Months 2–4: gather apostilled documents from your home country (criminal background, pension letters, birth certificates). Begin the visa application with your lawyer.
• Months 4–8: visa processing. You can live in Panama on tourist status during this period (your lawyer will manage extensions if needed).
• Month 8+: receive your residency card (cédula), finalize banking, sign a long-term lease or close on a property purchase.

Frequently Asked Questions

Can I collect US Social Security in Panama?

Yes. The US Social Security Administration sends payments to Panama without restriction. You can receive direct deposits into a US bank account and access funds via ATM, or arrange direct deposit to a Panamanian bank account. Panama has no agreement that would reduce or affect your Social Security benefits.

Do I need to learn Spanish?

You can survive without it in Panama City’s expat circles and Boquete’s retiree community, but you will not thrive. Government offices, local tradespeople, healthcare outside top private hospitals, and everyday interactions in smaller towns all require Spanish. Even basic conversational ability makes a significant difference in daily quality of life and your ability to negotiate better prices.

Is Panama safe for solo women?

Panama City’s expat neighborhoods are generally safe for solo women during the day. Standard precautions apply at night — use Uber rather than walking alone, avoid poorly lit side streets in areas like Casco Viejo’s fringes, and be aware of your surroundings in crowded areas. Boquete and Coronado are very safe. Bocas del Toro requires more awareness, particularly late at night.

How difficult is it to buy property as a foreigner?

Foreigners can own property in Panama with the same rights as citizens — no special permits or local partner requirements. The process involves a title search, a purchase agreement, and registration with the Public Registry. Use a reputable real estate attorney (not just the seller’s agent). Titled property (as opposed to “rights of possession” land) is the only type you should consider buying — rights of possession land has weaker legal protections and is more common in rural areas.

What is the healthcare situation for retirees over 65?

Healthcare quality is excellent and affordable, but insurance becomes more challenging above 65. Some local insurers cap enrollment at 65 or 70, and premiums increase substantially with age. Many retirees self-insure by maintaining a medical emergency fund of $30,000–$50,000 and paying for routine care out of pocket, which is feasible given Panama’s low medical costs. International plans from Cigna or Allianz have higher age limits but cost more.

Can I work remotely on a tourist visa?

Technically, working on a tourist visa is not authorized by Panamanian law. In practice, remote workers earning from foreign companies and not working for Panamanian employers rarely face issues, as there is no enforcement mechanism for work performed digitally for foreign clients. For stays beyond 180 days, transitioning to the Friendly Nations Visa is the responsible and practical choice, as it provides legal residency and access to banking and other services.

Is Panama Right for You?

Panama is not for everyone, but for the people it is right for, it is hard to beat. The combination of US dollar economy, zero tax on foreign income, the Pensionado visa’s extraordinary discount package, and a modern capital with direct US flights creates a package that no other country in the Americas can fully replicate.

The ideal Panama expat is someone who values financial efficiency (the tax system), proximity to the US (3 hours to Miami), modern infrastructure (the capital has everything), and a tropical climate — and is willing to tolerate bureaucracy, learn at least some Spanish, and accept that Panama City traffic is a genuine quality-of-life issue. If you are choosing between Central American destinations, the main comparison is Costa Rica vs Panama — Costa Rica wins on nature and environmental culture, Panama wins on tax efficiency, currency stability, and urban infrastructure.

For a side-by-side comparison of two top Central American retirement destinations, read our Costa Rica vs Panama for Retirees guide.