Why Panama Versus Other Central American Countries

Before GH and I went to Panama, we had strongly considered Costa Rica as the optimum place to buy a second home and eventually retire. We knew it had a high literacy rate, excellent medical facilities, wonderful rain forest and was relatively inexpensive. We had already been to Belize, and while we found the people there to be lovely and the country to be stable, outside of Ambergris Caye, we were pretty underwhelmed by the culture (or lack thereof) and the technological advancement of the country. However, we recognized that Belize had discovered a great way to lure retirees there, through offering easy residency with just a moderate social security income. A friend who tried retirement in Belize mentioned that the poor infrastructure and third world attitude sent them packing after only a short trial period. Currently residing in El Valle, she also made the interesting comment that even the expats there seemed like they were running from something instead of running to something. As we continued to research Central America (due to its proximity to the US), doubts rose about rising crime in Costa Rica, the poor quality of roads and other infrastructure, and the squatters’ rights laws, which give squatters property rights in as little as 3 months’ time. In fact, the World Bank ranks Costa Rica near the bottom of the international list as far as protecting investors. Panama’s squatter rights are, as I understand it, more similar to those in the US. After 10 years of de facto possession, squatters can file for title on the land. The issue can be easily resolved (probably in Costa Rica as well) by purchasing property in a gated community that would prohibit potential squatters from even obtaining access. We briefly considered Nicaragua, but again, the other Central American countries seem, from this distance, to lack good infrastructure. In addition, we (and others who submitted comments to us) like the stability of the economy offered in large part through ownership of the Panama Canal by the government, something that occurred in 2000. In my opinion, the canal, which is currently being enlarged, provides a steady, quality income stream to the government that is turned around into sound infrastructure and low taxes. Use of the dollar in Panama is currently another attraction, though that may change as the US currency continues to be deliberately devalued. (I think I’ll write about that at some point vis-à-vis the impact on Panama. It’s an important consideration.) Medicine in Panama is of an excellent quality. Many doctors were trained and are dual licensed in the US and Panama, and are bi-lingual. I’ll be writing a couple blogs about this topic in the coming weeks. I think the international banking scene in Panama is a big plus as well. The banks are not federally insured and they are therefore extremely conservative. The last report I read said they hold, on average, in excess of 60% reserves. Compare that to the pittance required of US banks. BTW, banks in Panama are offering CD rates of between 5-7%…. not too shabby!