printAdvantages to Investing in Real Estate in Panama
Alvaro Aguilar AlfuLombardi Aguilar & Garcia, Attorneys at Law
Foreigners will find that Panama has special regulations which favor investments in real estate and have the added advantage of bilateral investment treaties
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 down payment. 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.
ABOUT THE AUTHOR: Alvaro Aguilar Alfu
Alvaro Aguilar is a graduate of Washington College of Law, American University, LL.M., 1992. He is also a partner specialized in asset protection and other Business Law matters at a Panama law firm with experience in private client, intellectual property, business, administrative and commercial law. Mr. Aguilar is an active member of the Panama Bar Association
Copyright Lombardi Aguilar & Garcia, Attorneys at Law
More information about Lombardi Aguilar & Garcia, Attorneys at Law
While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
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 down payment. 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.
ABOUT THE AUTHOR: Alvaro Aguilar Alfu
Alvaro Aguilar is a graduate of Washington College of Law, American University, LL.M., 1992. He is also a partner specialized in asset protection and other Business Law matters at a Panama law firm with experience in private client, intellectual property, business, administrative and commercial law. Mr. Aguilar is an active member of the Panama Bar Association
Copyright Lombardi Aguilar & Garcia, Attorneys at Law
More information about Lombardi Aguilar & Garcia, Attorneys at Law
View all articles published by Lombardi Aguilar & Garcia, Attorneys at Law
While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
