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Article By Abel Gomez-Tomiczek, Founding Partner, Gomez Tomiczek International
Cost, Residency, and Lifestyle Tips for Expats.
Dreaming of an endless summer, affordable living, and a welcoming culture? Panama could be the perfect destination. Known for its affordability, quality of life, and easy residency options, Panama is a haven for expats, retirees, and adventurers alike, all drawn by the promise of a high quality of life without breaking the bank. Here’s everything you need to know about setting up your life in Panama.
Living Affordably in Panama: Cost of Living Breakdown - One of Panama’s biggest draws is its flexibility with budgets. You can choose a lifestyle as simple or as luxurious as you want. Whether you’re seeking a bustling city apartment with ocean views or a cozy home in a mountain town, Panama has affordable choices to match your goals and resources.
City vs. Country Living - In Panama City, the country’s vibrant capital, you’ll find a cosmopolitan lifestyle with great amenities, but it comes with a premium price tag. Rent for a comfortable one-bedroom apartment typically costs around $1,000 monthly. For premium locations like Punta Pacifica or Costa del Este with ocean views, expect to pay $1,500–$2,000, depending on amenities.
Rural towns like Boquete and Volcán offer a completely different experience, and they’re perfect if you’re looking to save. A one-bedroom rental in these areas might only set you back $300–$500, giving you more freedom to budget for travel, entertainment, and local experiences.
Day-to-Day Expenses - Where Panama really shines for expats is in its day-to-day affordability. A typical grocery bill for a couple runs around $300 monthly if you focus on local produce and pantry staples. While imported items can be pricey, Panama’s fruits, vegetables, and fresh fish are affordable, plentiful, and delicious. Stick to seasonal produce like pineapples, bananas, and papayas, and you’ll enjoy great meals without breaking the bank.
Dining out is another area where expats enjoy big savings. A meal at a local fonda (small restaurant) costs about $5–$8, while a mid-range restaurant meal in Panama City costs around $15–$20 per person. In smaller towns, prices are even lower, making eating out both enjoyable and easy on your wallet.
Utilities and Other Bills - Electricity costs in Panama vary based on location and lifestyle. In Panama City, where air conditioning is often a necessity, monthly bills can range from $100 to $150. However, if you’re in cooler, breezier areas like Boquete, bills may only be around $35–$55 a month. Internet typically costs about $40 monthly for a basic plan, while faster plans are available for a bit more.
GETTING AROUND
Public transport is reliable, affordable, and perfect for city dwellers. In Panama City, a one-way bus fare is around $0.35, and the Metro charges less than a dollar per ride. For those who prefer the independence of a car, fuel prices are similar to those in the U.S., and a decent used car will set you back around $10,000. If you live in Panama City, you may find it easier to walk, use public transport, or hail an Uber than deal with city parking.
All things considered, a couple can live comfortably on $1,500 to $2,000 per month in Panama, with costs dropping further in rural areas. These lower living costs mean more room in your budget for weekend trips, cultural festivals, or even extra nights out with new friends. It’s easy to see why Panama attracts expats from all over the world!
GETTING YOUR DRIVER’S LICENSE IN PANAMA AS AN EXPAT
If you’re planning to explore Panama, having a car is a fantastic option, especially in rural areas. Here’s what you need to know about getting a Panamanian driver’s license:
The Tourist Period: Tourists can drive using their home country’s license for up to 90 days from the date they enter Panama. This grace period gives you time to settle in before needing a local license.
Residency Requirement: Once you’re officially a resident, you’ll need a Panamanian driver’s license to drive legally. To start, have your foreign license validated at your home country’s embassy in Panama. Then, bring it to the Licensing Office (SERTRACEN) along with your residence permit, passport, and a completed blood type test. After submitting these documents, you’ll receive your Panamanian license.
With your Panamanian license in hand, you’ll be set for convenient and flexible travel, whether it’s running daily errands or visiting friends across town. Having a car in Panama opens up countless options for getting around with ease.
BANKING OPTIONS FOR EXPATS IN PANAMA
Banking in Panama is stable, accessible, and offers a range of services suited to expats. The banks here have a reputation for reliability and cater to various needs, from personal checking accounts to high-interest savings accounts and fixed-term deposits (CDs). Here are the main types of accounts for expats in Panama:
Personal Checking and Savings Accounts: Many expats opt for a basic checking or savings account to manage day-to-day expenses, make local transactions, and pay bills. These accounts typically come with debit cards and online banking access for added convenience.
Fixed-Term Deposits (CDs): Panama’s banks offer competitive interest rates on CDs, typically ranging between 3.5% and 5% depending on the term. Since Panama uses the U.S. dollar, interest rates are influenced by the U.S. Federal Reserve, aligning returns with U.S. market conditions.
Thanks to Panama’s tax-friendly policies, interest earned on CDs is also tax-free, making this option especially attractive for expats looking to grow their savings in a secure environment.
WHAT YOU’LL NEED TO OPEN AN ACCOUNT
Opening an account requires a few essential documents:
• Passport
• Second form of ID (such as a driver’s license)
• Proof of address (like a utility bill)
• Reference letter from your bank back home
• Proof of income
Some banks even allow you to open accounts remotely, a useful option for those who want to set things up before they arrive in Panama.
RESIDENCY PROGRAMS: PANAMA VISA ITALIA AND FRIENDLY NATIONS VISA
Panama’s residency programs are one of the major draws for expats. Here’s a breakdown of three popular options that make long-term residency in Panama easy and attractive.
Panama Visa Italia - Italian citizens benefit from the Panama Visa Italia, a fast-track residency option that’s part of a bilateral treaty. The visa allows Italians to secure permanent residency in Panama with fewer requirements and a streamlined application process, making it one of the most straightforward options for Italians who want a second home in Panama.
Friendly Nations Visa - Panama’s Friendly Nations Visa is available to citizens of over 50 countries, including the U.S., Canada, and most of Europe. This visa offers two main pathways:
1. Real Estate Investment: Qualify by investing a minimum of $200,000 in real estate, an appealing option for those interested in owning property in Panama.
2. Certificate of Deposit (CD): Alternatively, a $200,000 deposit in a local bank qualifies applicants. This option is ideal for those wanting a more liquid, hassle-free investment without the commitments of property ownership.
Pensionado Visa - Perfect for retirees, the Pensionado Visa requires proof of a lifetime pension of at least $1,000 per month. With no minimum age, this visa is highly popular with retirees seeking a comfortable lifestyle in Panama. In addition to offering residency, the Pensionado Visa also provides discounts on medical services, flights, and entertainment, enhancing Panama’s already affordable lifestyle.
Maintaining Your Residency Status - Once you’ve secured residency, you need to spend at least one day in Panama every two years to keep your residency active—a minimal requirement that offers plenty of flexibility for expats who wish to travel frequently or live part-time in Panama. For those looking to stay indefinitely, Panama also offers a pathway to citizenship after five years of permanent residency.
Why So Many Expats Fall in Love with Panama - Panama offers a remarkable balance between quality of life and affordability. Whether it’s the welcoming culture, attractive tax advantages, or endless summer climate that draws you here, Panama has something for everyone. Its stable banking system, flexible residency options, and lower cost of living make it a top destination for expats worldwide.
In Panama, you can live life at your own pace, surrounded by natural beauty and a vibrant community. From the vibrant city life of Panama City to the peaceful charm of mountain towns like Boquete, Panama provides a lifestyle that’s rich in experiences yet gentle on your wallet. For many, Panama isn’t just a destination; it’s the place they call “home.”
READY TO MAKE THE MOVE?
So, why wait? If you’re dreaming of a place where the good life comes at a fair price, Panama might just be the new chapter you’ve been looking for. Pack those bags, get your documents in order, and start envisioning life in this tropical paradise. Your Panama adventure awaits! EG