Reason #1 Not to Move to Panama: To escape the long arm of the law. Panama is not the place to run to if you are looking to escape illegal activity in your home country. You will get caught! You will spend some time in a Panamanian jail – and anything you have at home is better! – and you will be extradited back to your home country to face the music. So con artists, murderers, child molesters, thieves and crooks take note! The new hand-held “Pele Police” that Panamanian police have are linked to Interpol and US and other data bases. If you have a bench warrant in the US, and you’re stopped for a traffic violation in Panama, you may be headed home, after a week to several months in a Panamanian jail.
Reason #2 Not to Move to Panama: To run your Ponzi scheme off shore. We had some folks who lived near us in Valle Escondido who promised amazing returns on investment; far more than anything you could make elsewhere. Their scheme unraveled when they decided to buy some “blood diamonds” and send what they claimed was, I don’t know, say $30,000 worth of diamonds, shipped to their young child (if you can believe that level of scum) and when customs opened the package and discovered something like $150,000 worth of illegal diamonds – oops! The scheme started to unravel and they moved on.
Reason #3 Not to Move to Panama: To launder money or escape paying US taxes. Panama never was a real “tax haven” for US citizens because the US, in its infinite greed, has, unlike many civilized countries, decided that Uncle Sam wants your money wherever you happen to live in the world. So even if you lived in Panama, as a US citizen you need to go through all the hassle of IRS paperwork and declare income and file returns. And just to make sure you do, the IRS has opened an office in Panama City. Not, mind you to assist expats who want to comply, but to search out those who aren’t paying what the IRS says you owe. And if you think the IRS, and the tons of accountants and paperwork and tax provider software it spawns, is a major part of the “problem” that’s causing the collapse of the US, you may be right.
Of course if your permanent dwelling is outside the US, and you aren’t in the US more than 30 days a year, you can take advantage of a significant deduction of over $90K per person for income earned outside the US. That’s earned income, not passive, investment or pension income. And Panama doesn’t tax you for income earned outside Panama. [You tax accountant, those people who make their living off the IRS, can give you details.]
Reason #4 Not to Move to Panama: chill, drink Balboa beer and lay in the hammock. If you’re retiring and want an easy, no-challenge life, go to an assisted living complex and sit in a rocking chair, drink beer and watch TV and talk with the other folks. Panama is for folks who aren’t ready to “give up” but are eager for new experiences, new adventures, new challenges, learning tons of new stuff, new language, new ways of doing things, new culture! If you want an adventure and to stretch your life and mind, this is the place!
Reason #5 Not to Move to Panama: it’s cheap. Well in many ways it is, or rather may be, depending on where you are coming from. We moved down to Panama from the Ventura-Santa Barbara “Gold Coast” of California and it is much cheaper here. Are there places in the US where you can get more house for your money and the cost of living may be the same, or even a little cheaper than Panama? Of course! Try Phoenix, Bakersfield, Las Vegas, Western Pennsylvania and there are a lot more. Nothing against those places, but they are not for me. For many people you can live very well, make that VERY well in Panama for less than places in the US with attractive climate, etc. Sure, Texas may be cheaper – if you like Texas.
Reason #6 Not to Move to Panama: it’s a lot like the US. No way Jose! If you like the US, stay there! If you like where you are living don’t move. Panama is different and that’s why it is attractive to many people who like different! It is a different country with a different lifestyle, different culture, different way of governance, different systems, yada yada. Yes, sometimes the differences will drive you nuts! But it can also be stimulating, challenging and fun.
Reason #7 Not to Move to Panama: to make a killing. A lot of folks came down here from the US to make a fast buck. It doesn’t work that way folks – anywhere! The joke here is, “How do you get a million dollars in Panama?” The answer, “Come to Panama with two million dollars.” Yes, like anywhere else, there is opportunity, lots of it. But it takes work and time to create anything. There is no fast way to success in business or quick way to make a lot of money. If it were, everyone would do it. If you come to Panama for the long haul, make a commitment, follow the rules, work hard and stick with the program, yes, you can create a good business and make some money, but forget it if you’re coming here to make a quick buck or live off the land.
I keep saying, “Panama is not for everyone” but for us it has been a wonderful adventure. Yes, there are folks, and some of them I’m happy to say are contributors here, who tried it and it wasn’t for them. So, now they know. Maybe some of them didn’t really do their homework or analyze all the challenges they would face in a new culture. Read their comments and read the stuff from the folks who promote Panama as the Promised Land. Study, analyze not just Panama but yourself and then make a decision.
For us the real reason for moving to Panama is that our lifestyle is better, more fun, and more adventurous for less than in the US.