One of the questions frequently asked by our foreign clients is: What are the requirements for buying properties or real estate in Panama?
We believe this is a very valid inquiry, but before answering it, we would like to share four reasons why we think investing in Panama through property purchases is a great idea.
Panama continues to lead the economic growth in the region, with estimates from the International Monetary Fund, World Bank, and Economic Commission for Latin America and the Caribbean (ECLAC) projecting a growth rate of 4.2% for the year 2023.
In fact, Panama’s GDP recorded a growth of 11% at the end of the third quarter of 2022, with notable contributions from the commerce, construction, transportation, and communication sectors, according to data from the Ministry of Economy and Finance.
Furthermore, it is important to note that Panama has a dollarized economy, which provides greater ease for foreigners who wish to invest in the country.
Panama is one of the safest countries in Latin America. People can walk, even at night, in most cities without the risk of being assaulted or falling victim to other common crimes. In this regard, the country allocated 843 million dollars to security in 2022.
Panama has a privileged geographic position, making it a regional hub ideal for logistics of exports and imports.
In simple terms, our country functions as a wonderful connection between the European, Asian, and American markets.
This same infrastructure is used by the country for its export of goods, which, for reference, reached 2.4675 billion dollars from January to August 2022, a 9% increase compared to the same period in 2021, according to the Ministry of Commerce.
Panama not only has sustained economic growth, a dollarized economy, a privileged location, and safety for its residents, but it has also invested in developing a robust business ecosystem that promotes business success, incentivizes investment, formal employment, and quality education.
Prior to the pandemic, Panama was experiencing a trend of receiving $5 billion in foreign investment per year. Although the recovery has been slow, it is steady and progressive. For example, foreign direct investment in Panama was $1.35 billion in 2021.
Additionally, the country has 21 free trade zones, 12 of which are active, including the second-largest free trade zone in the world, the Colon Free Trade Zone, which contributes up to 12% of the country’s GDP.
In summary, individuals in Panama can access a good quality of life, establish businesses, or peacefully retire surrounded by nature.
For this reason, the answer to the question that motivated this article is that there are no specific requirements for buying properties in Panama. The government does not establish special treatment for foreign individuals or impose differentiated tax payments.
Essentially, all that is needed is a valid passport and compliance with the same obligations as a Panamanian in any commercial transaction, with the exception that foreigners cannot own real estate within 10km of the borders.
If you are a foreigner considering investing in Panama and require legal assistance to conduct your business with complete peace of mind and support, please contact us immediately.