Panama Widens the Door for Foreigners
By Karla Fetrow
When the economic crisis became an economic down hill ski run, perhaps nobody felt the crunch quite as hard as the baby boomers. Retired or near retirement age, the little nest eggs they had worked to save for sitting in a lawn chair sipping margaritas, were suddenly reduced to emergency rations as the costs of living rapidly outgrew the budgeted monthly paychecks they were receiving. Many have had to postpone their retirement checks, or go back to work to supplement their incomes. It doesn’t look like the situation is going to get any better.
Although spirits seem to be soaring over the slight improvement in unemployment, placing it at 7.7% for February, past performances have shown us this improvement is very short lived. Mild winters allowing early construction begins the boom than pops it as seasonal work staggers to an end. The dreaded sequester, passed earlier this month, probably won’t have the shock value the collapse of the housing market had, but eventually the effects will be felt by everyone. The $85 billion budget cuts dwindle the funds for National Park services, education, defense contracting, and will even cancel White House tours. The seasonal employment gain will be lost as the workers in these categories join the unemployment lines.
With every man, woman and child owing nearly $55,000 for their share of the public debt, retirement in the United States doesn’t look like a very good option. That margarita while sitting in a lawn chair could best be enjoyed in a country where that retirement paycheck means enjoying a comfortable living standard. Following the lead of Costa Rica, Panama has opened its doors to investors, retirees, and expats from 24 nations, including Australia, Canada, the United Kingdom, and the United States. The invitation, sent out by President Ricardo Martinelli in May 2012, would give permanent residency to citizens of friendly nations with professional and economic ties with the Republic of Panama.
The purpose of the policy is to encourage investment in new businesses, purchase an existing business, or for those who have secured employment with a Panamanian business. It also accepts applicants with proof of solvency, which is a special enticement for retirees. With $5,000 deposited in a Panama bank account, plus $2,000 for each dependent, along with the monthly retirement check, that nest egg could stop shrinking and start growing.
The economic advantages of relocating in Panama are enormous
Panama is a tax shelter, with strict privacy laws concerning the banking industry and a number of protective laws set in place for both international corporations and for individuals. There is an import tax exemption on new cars and household goods. Residents do not pay a tax on foreign earned income. The cost of housing is nearly half that of the United States. Under the “pensionado” program, there are discounts on utility bills, airline tickets, eye and dental exams, doctor bills, movie theaters, hotels, and more. A retiree with $750- $1,000 a month income could live well in Panama.
Panama has evaded much of the global recession, with a large portion of its economic growth credited to spending on the public infrastructure. The ongoing construction has included expansion of the canal, a new subway system, and private development of hotels, offices, and housing. With expansion and improvement of its airport, it now offers more flights per day than any other Latin American country.
Panama is quickly becoming the hub of Latin American commerce
The combined policies of creating a dollar value economy, encouraging foreign investment and welcoming retirees into the country has drawn numerous international companies to headquarter in Panama City. Of the emerging nations, it is among the top four leading the way to economic stability.
There are other advantages to living in Panama
While it was once difficult to obtain, with the welcome mat President Martinelli has spread out, permission for the right to work and establish a business has been simplified under the new laws. After five years of residency, foreign investors, retirees, and expats may apply for citizenship.
While Costa Rica is geared more toward tourism, Panama has better overall living conditions; good roads, excellent medical facilities, beautiful, uncrowded beaches, clean water, and cultural diversity. The diversity extends to the terrain. Beyond the very modern metropolis of Panama City, there are small towns and villages, emerald mountains, and an abundance of wildlife. It’s the ideal setting for nature lovers, adventurers, and outdoor recreation. Its Hawaiian styled climate includes miniature ecosystems of jungle, rain forest, islands and reefs, adding special enjoyments for everyone from cliff climbers to scuba divers.
There are a few drawbacks
For families considering relocating, schools outside the big city are small, with few extra-curricular activities. Many of the groceries and convenience items Americans are accustomed to buying are unavailable, although there is an abundance of fresh, organic foods. Restaurant service is slow. However, for work oriented individuals, even these drawbacks can be an advantage. Panama has a high demand for English speaking teachers. There are also plenty of jobs available for American cooks.
Panama could be seen as the new frontier for those with a pioneering spirit. The minor drawbacks only mean a challenge for adjusting to a new lifestyle and an opportunity to apply ingenuity and creativity within its vast resources. America is staggering under enormous debt, with very few outlets for prospective retirees to live well and enjoy the fruits of their labor. With a healthy climate and thriving economy, Panama offers the freshness and vitality to make those retirement years enjoyable.
Karla Fetrow: For Americans staggering under the national debt and trying to stretch a retirement income, Panama begins to look like the most appetizing place to settle.