Answers

Do I need to be a resident of Panama to buy property there?

1. Non residents have the same rights as the Panamanian people and are allowed to purchase and own property

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Is Panama a safe place for foreigners to buy property?

2. Definitely. There are over a dozen laws in Panama established for protecting foreign investments, which makes it very safe. Panamanian law guarantees property titles, even those owned by foreigners, are protected by law. There are thousands of foreigners that own property in Panama, because it such an ideal place to retire or buy a second home. Everyday, real estate transactions are made without any problems.

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How safe is Panama?

3. Serious crimes are very rare in Panama, Panamanian people are known as the most generous and friendly people. Panama is Latin America’s safest country.

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Is it safe to drink the water?

4. Bottled water is widely available, but is unnecessary because the tap water is safe to drink almost anywhere in Panama.

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Is Panama politically stable?

5. Since the removal of Noriega in the 1980’s Panama has flourished and has become an extremely stable country.

What is the local currency?

6. The local currency is USD and Balboa, and has been used since 1904. The balboa only exists in coins and is tied 1:1 with the US dollar.

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Do I need to know how to speak Spanish?

7. Spanish is the official language spoken in Panama, however, English is their second language, and many Panamanians are able to speak English.

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Is a foreigner able to open a business in Panama?

8. There are numerous incentive programs for foreign investors. Panama law supports foreign investments and is pro-business; Panama does not restrict foreigners from opening up a business or owning a company. The laws for company start-up are flexible and inexpensive.

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Tax Related Questions for Real Estate in Panama

Are there property taxes in Panama? If so, how much?

9. Properties with a registered value of $30 000 or less do not have to pay a property tax. Any properties higher in value pay as follows:

1.75% from $30 000 to $50 000

1.95% from $50 000 to $75 000

2.1% for properties above $75 000

As a way to increase foreign investment, the government of Panama has implemented a 20 year Tax Exemption applicable to all buildings (commercial and residential), but not for land. This exemption is only good to those projects that have a construction permit before December 31st, 2009.

Are there capital gain taxes on purchase and sale of real property in Panama?

10. Yes, the law states there be a 10% capital gains tax on the purchase and sale of real property in Panama. This tax is triggered upon the transfer of the title in the Public Registry.

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Is there any way to minimize capital gains taxes on property sales in Panama?

11. The most common strategy that people use in Panama is to hold property in the name of a Panama corporation, and instead of transferring the property to the buyers name upon the sale, the “bearer shares” of the corporation are sold as a whole to the buyer. Since corporation “bearer shares” are not registered, there is no record of the sale. Upon the sale of the shares, the new owner simply changes the board of directors/officers to take control over the corporation.

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