Introducing Panama: answers to all your questions
Did you know that Panama is one of the countries in the world where you can watch the sun rise in the Pacific and set in the Atlantic? This paradise on earth and commercial hub offers so many benefits for expats, and it's not out of reach in terms of price. If you want to settle abroad and combine this with favourable tax rates, Panama could be a good alternative.
General information about Panama
Geography and climate of Panama
Panama lies in the southernmost part of Central America. It is bordered by Costa Rica to the west, Colombia to the southeast, the Caribbean Sea to the north and the Pacific Ocean to the south. Its capital and largest city is Panama City, home to almost half of the population.
In Panama, temperatures are between 26-28°C all year round, but you should expect rainfall. There are two seasons, dry and rainy. The dry season lasts from the end of December to the beginning of May, while the rest of the year is the rainy season. Unlike other tropical countries, Panama is not affected by hurricanes.
Panama's economy
Panama is best known for the Panama Canal, which since 1914 has revolutionised trade and the transport of goods between the Atlantic and Pacific Oceans. The country has a well-developed banking system and a rapidly growing economy.
One of the reasons for Panama's popularity is the Friendly Nations VISA programme, which allows citizens of 47 countries to obtain permanent residence. For this reason, and because of the favourable tax regime, many people choose company formation in Panama or the settling in Panama. Fortunately, Hungary is also on the list of Panama-friendly countries.
Currency of Panama
Panama's official currency is the US dollar and the Panamanian balboa, which are equivalent. One Panamanian balboa is currently around 358 Hungarian forints. It is interesting to note that the balboa is more commonly used as change. It is worth changing into US dollars, as the euro is exchanged very cheaply locally. It is always a good idea to have plenty of 5, 10 and 20 dollar bills on you, as many places are reluctant to accept 50 and 100 dollar bills. Credit cards are also widely accepted.
Title: flag of Panama
Source: unsplash.com
Official language and population of Panama
The majority of the population are native Spanish speakers, with Panamanian Spanish being the local variety. The most common second language spoken is English. There are currently nearly 4 million people living in the country. 30% of the population is aged 0-14 years, making it a young population. Life expectancy is roughly 72 years. 95% of the population is Christian and unemployment is below 6% according to official figures.
It's worth finding out about local customs, as they differ in many ways from those at home. For example, if you are offered food and drink when you are a guest, it is rude to refuse. Families are very close-knit, and Panamanian parents have strict rules about the choice of mates for their children.
What is life like in Panama?
The capital and rural areas
In Panama, there is a strong American influence, which is reflected in the fact that you can find American restaurants and shops everywhere you go in the country. This influence is particularly noticeable in Panama City, which with its modern appearance and tall buildings could be considered an American metropolis. Panama has many national parks and tourist attractions. In the countryside, there is some poverty, with between 60 and 701 T$3T of the indigenous population living in poverty, and in Panama City between 5 and 61 T$3T of the population living below the poverty line.
Office administration
There is no Hungarian embassy in Panama, which can make situations like losing your passport difficult. In such cases, the paperwork can be lengthy and costly. However, the Embassy of Hungary in Bogotá (Colombia) has a representation office in Panama City.
Setting up a company in Latin America is quick and easy if you speak Spanish. Of course, you should seek expert help to make sure you avoid pitfalls and don't get your application rejected.
Housing
Housing costs vary considerably across the country. Rents are highest in Panama City and much cheaper in rural areas. Rental accommodation is easy to find, from one-bedroom apartments to luxury apartments. Overall, housing is very affordable compared to most countries in the world, with average prices 27% cheaper than Germany, for example.
In the table below we have collected the rental rates in Panama City.
| Type of property | Price |
| 1 bedroom apartment rental in the city centre | 350-1200 $/month |
| 1 bedroom apartment rental outside the city centre | 250-700 $/month |
| 3 bedroom apartment rental in the city centre | 600-2400 $/month |
| 3 bedroom apartment rental outside the city centre | 400-1500 $/month |
| Purchase price per square metre in the city centre | 1200-3000 $ |
| Purchase price per square metre outside the city | 800-2000 $ |
Food costs
Panama's large expat population means that restaurants and supermarkets try to cater for all nationalities. For everyday necessities, street stalls and small supermarkets are available, but going to the market is also popular. Seafood is a priority in all restaurants and supermarkets. Vegetables are less plentiful, while local fruit is more varied.
| Food purchased, restaurant meals | Prices |
| Cheap restaurant | 4-15 $ |
| Coffee | 1,5-4,5 $ |
| A bottle of Coke | 1-,25 $ |
| Bread | 1-3 $ |
| 12 eggs | 1,5-2,5 $ |
| 1 kg chicken | 3-8,5 $ |
| 1 kg beef | 3,5-12 $ |
| 1 kg apples | 1,45-6,5 $ |
| 1 kg rice | 1-4 $ |
Interestingly, the country's business culture does not bargain, unlike other Latin American countries.
Travel and transport
You can fly to Panama with a single connection from Paris Charles de Gaulle or Amsterdam-Schiphol Airport to Tocumen International Airport in Panama City. There are daily flights with British Airways, Air France, KLM and Lufthansa, among others.
Public transport in Panama is very safe and cheap. Long-distance buses are popular, but you can also travel by domestic flights thanks to two local airlines. In the evening, however, it is recommended to take a taxi, which is also very cheap compared to Budapest prices. Uber also operates in the country. As a pedestrian, you should be even more careful than usual, as Panama's driving culture puts cars first. There is only one railway line in Panama, between Panama City and Colón. Passenger trains run only on weekdays and only once a day, in each direction.
Car rental is common in Panama due to the large number of foreign tourists, but we recommend the streets of the capital only for experienced drivers, as locals often ignore the rules of the highway code. In the event of a car accident, it is important to wait for police action.
Roads are good by Central American standards. During the period May to October, flooding can make driving difficult. Driving at night is not recommended, as on many roads signs are difficult to see and it is easy to get lost.
Image title: Panama City at sunset
Source: unsplash.com
Safety and health
Public safety in Panama is not bad by Latin American standards. Minor thefts may occur in Panama City, so it is worth being vigilant. In the capital, the districts of Chorrillo and Curundú, parts of the city of Colón, the Costa del Caribe and the part of the Darién Jungle near Colombia are considered to be areas of poor public safety. In Central America in general, it's best not to show off expensive jewellery or a lot of cash, but it is generally considered a safe country by Central and South American standards.
Panama has good healthcare, with good hospitals, especially private ones. Tap water in Panama City is mostly potable. No special vaccinations are required to travel to Panama. You can only be asked for a certificate of vaccination if you are coming from a country at risk of yellow fever.
Educational and entertainment facilities
In the Panamanian school system, primary school lasts from grades 1 to 6. Children start school at the age of 6. Secondary school is divided into lower and upper grades, grades 7-9 and grades 10-12. The school year runs from March to mid-December and consists of 3 trimesters. Some schools have either morning or afternoon classes. School uniform is compulsory, usually dark blue trousers or skirts with a white shirt or blouse. There are many universities in Panama, and many with English as the language of instruction.
Partying, going out, going to the cinema or the theatre is mainly possible in Panama City. In the countryside, small bars are more common, where you can meet mainly locals. The most popular sports are baseball, football and basketball. Unfortunately, sports facilities are not well developed in most communities.
Panama company formation and establishment
A Panama company formation a good alternative if you are looking for favourable tax conditions. In Panama, income from abroad is tax-free. Panama is an attractive option for those thinking of setting up an offshore company. If you want to set up an offshore company in Panama, there are special rules you need to follow. For example, you will need a local representative and at least 3 directors. It's worth getting expert help to make sure everything runs smoothly.
A Panama resettlement is a good choice for self-employment and even as a digital nomad, as you only need to spend 3 days a year in Panama to keep your permanent residence permit. If you want to work for a company, you will find it easier to work for international companies. For Panamanian companies, you need to obtain a special permit to work, so they protect the local workforce. However, there are still labour shortages in many skilled jobs.
Expert help if you want to live in Panama or move your business to Panama
The path to residency in Panama is through a maze of red tape. You will need, among other things, certified translations of documents and you may also need to obtain a work permit. Whether you want to settle, work locally or on offshore company formation in Panama, you must also open a Panamanian bank account. This is difficult if you don't know Spanish and the pitfalls of local procedures.
Our experienced staff is ready to assist you with fast, reliable, discreet and professional administration of Panama establishment and company formation.
Among other things, you can count on us for the following tasks:
- Panama immigration assistance
- Translation of English documents by an official Panamanian translator
- Apply for a Panamanian residence permit and identity card
- Pick-up from your hotel in Panama to the immigration office and other administrative locations
- Collecting local documents for permanent residence in Panama
- Proof of local address for permanent residence in Panama
- Business start-up and sole proprietorship, expert assistance on tax residency
Source : https://www.numbeo.com/cost-of-living/in/Panama-City
