Panama has started a bidding war for retirees:
To attract more investment, the central American nation has eased
immigration laws and set up a discount bonanza for expatriate
pensioners that includes 20 percent off professional services such as
those provided by lawyers, architects and physical therapists; no
property tax for 20 years; no income tax on income earned outside
Panama; and a 50 percent discount on real estate closing costs.And
that’s only the beginning. The list of discounts goes on and on,
including price breaks on telephone service, surgery and domestic
airfares and a one-time waiver of duties on imported household goods up
to $10,000.All it takes to qualify is pension income of $500 or more per month — at any age and from any source.
Here is the story.
I can think of four relevant models here. 1. The Panamanian government is simply stupid. 2. In Panama most prices are well above marginal cost, making this a good deal for the nation as a whole. 3. The Panamanian government has a preference for sources of wealth which will not get involved in politics. 4. The Panamanian government believes that the greater number of residents will result in a more efficient spreading of fixed costs. I put my money on #2 and #3, and do visit Panama if you have never been; it is far more interesting than the now overtouristed Costa Rica.
I did a quick google for climate information–month by month temperatures and humidity. IMHO only certain varieties of amphibians and snakes (preferably from D.C.) should visit and/or retire in Panama. But then I’ve never understood the preference for Florida or Costa Rica either.
They’re copying Belize, which has been attempting to attract pensioners with a similar for several years. No discount on services, but you get permanent residency and no taxes on income from outside. I believe that the minimum income per month in Belize is somewhat higher than what Panama proposes.
Mind you, this is a step down from the wild and crazy 90s, when certain Carribean Commonwealth countries like Belize would actually sell you citizenship and a passport for an affordable price in the high five figures. The U.S. stepped on that one — you can guess who many of the customers were — though you can still buy citizenship and a passport from Dominica and I believe Trinidad and Tobago, but it’s going to cost you.
Bill Bonner and the gold, guns, and economic armageddon crowd are already marketing beachfront property in Nicaragua as the coming place to live out your retirement tidily and ride out the coming-real-soon-now economic hoohah. Panama’s for renters
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“3. The Panamanian government has a preference for sources of wealth which will not get involved in politics.”
Retirees don’t get involved in politics? Tyler, are you high? Even without the vote, one has to imagine that America’s old people will be every as demanding and querulous in Panama as they are up here. In short order, AARP will own Panama.
In return, Panamanians will get lots of hugs, cookies, and stories about Aunt Gladys’s recent operation.
What Panama may not have considered is that the “active retirees” who move there today may not be quite so active tomorrow. As time goes on, their health care needs will increase, as will the associated costs.
I write a lot about Panama from a libertarian stand point on my blog as I’ve lived there and still have very close connections to the country.
As the article also says Panama has had this law for ages. The only real benefits as far as I know that are directly related to the Pensionado law is the actual visa. The discounts are available to all retirees including my Panamanian mother in law. The tax rules are available to all residents, just remember that US citizens are still liable for US tax, even if they live abroad. There may be some special importing allowance specified in the law.
It is generally a good deal for the country as you get big spenders in. It does not cost the government anything as the foreigners are not covered by the Panamanian social security system.
Panama’s economy is kept up by a combination of the building boom, the canal and the most globalized economy in Latin America. The foreigners buying properties are important and are generally looked well upon, although you are starting to see a bit of miscontempt in some of the hyper gringo areas such as Boquete and Bocas del Toro.
The building boom is a bit bubly at the moment and probably heavily influenced by some money laundering http://econotrix.com/archives/000524.html and it’s probably a healthy thing if more of the apartments in Panama City were bought up by actual retirees rather than fictitious Colombian tourists.
Health care is excellent and relatively cheap in Panama as long as you have a health insurance or just self pay. Medical tourism is also seen as a growth industry by the government and is promoted heavily abroad.
Otherwise I would say that Panama despite heavy corruption is a great example of why globalisation works.
Having spent 10 days in Panama last summer on a business/pleasure trip, some comments:
Economy is growing rapidly due to their embrace of globalization, capitalism, and their legacy of U.S. institutions vis-a-vis courts, rule of law, and property rights.
Still big income disparities, but will be largely cured by growth and enlightened policies.
Vastly superior to Costa Rica, whose adoration of european model of social democracy will continue to mire them in stagnation.
The people are young, healthy and hip, and will embrace change and development. Panama will provide a wonderful example in the years ahead as what happens when a country embraces the market system. What a great contrast to some neighboring countries.
I’ve always been amazed that more Americans don’t retire to Latin America, where I’ve spent a couple of years in aggregate. I remember once overhearing a toast given by a late-50′s apparent retiree in a beachfront restaurant, who said something to the effect of: “And here’s to our friends who are still working hard, so that someday they can live like us.” The SSI statistical snapshot for Oct. ’06 gives a figure of $923 as the average monthly payment for all beneficiaries. Almost anywhere south of the Rio Grande that is enough for a maid, a charming house, and a decent standard of living. Another charming and apposite memory was paying the property taxes on a huge 4 bedroom in Mexico, which were about $60 a year.
I just returned from a 10 day visit in Panama. We stayed 3 days in Playa Blanca and then went up north to Boquete followed by 3 days in Panama City. I was with out a doubt pleased by the people, the service, the prices, the beauty of the country. This is a country of friendly people with smiling faces and I am not refering to the tourist areas. Some of the prices with the crafts vendor were so low I was ashamed. We made some real friends and have written and emailed with them since returning to Colorado. I have started the process to buy property at the DeCameron golf resort and expect to have a residence within a year. I have absoulutly fallen in love with Panama a stark contrast to my last visit to Orlando, Florida just 6 months ago.
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I lived in Panama in 1999 and 2000. Tired of US taxes and sky rocket prices(Real State, Food, Health System, Transportation) we decided to move back to Panama. I have to tell you all, it’s a very different country from what we left 7 years ago. Food is still very affordable, Medical assistance is very good(nothing compares to a 5 minutes time you have with your doctor in US. And here they “really” care about you).
The only problem I find is the weather. We are very active people, and the heat and humidity outside is unbearable. Workouts are very, very early in the morning or night time. Still very humid.
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Soon the Panama would be a shithole if it is not already so. Now it is on the brink of the canal soon it will be in that. Retirees will make such loud farts, forget Aunty Gladis operation, it will just stink too much. I think it not far away when Panama will add a fart tax on the retirees.
One thing that people crib about most nowadays is hair loss. Be it the men or the women hair loss is a common trouble for all. Be it pollution, malnutrition, or heredity the number of people affected from hair loss is increasing continuously and at a rapid speed. Hair has from time immemorial been dubbed as an element of beauty especially for the women hence it is only normal that people panic at hair loss. But developing technology has now also made it possible that people have at least alternatives for hair loss.
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