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Investing in Real Estate

Panama has radically changed over these 10 years. Tourism has surpassed the Panama Canal and the Colon Free Zone as the country's top revenue earner; in 2012 Panama welcomed in excess of two million tourists. The number of cruise ships that visit the snake shaped Panamanian shores continue to increase with improvements made to ports in the Province of Colon and elsewhere. Thousands of tourists travel through Panama during the annual cruise season. Growth in tourism industry leads to increasing investor interest in this sector and there are incredible opportunities for tourist related services and amenities, encouraged by government incentives in a number of designated areas, known as Special Tourism Zones.

One of the reasons for the real estate market increase is that during the past several years Panama has been consistently rated in the top ten for the best retirement locations worldwide by groups like the American Association of Retired Persons (AARP). A welcoming climate, controlled crime rates, excellent incentives for retirees, together with the natural beauty and ethnic diversity that is Panama, all appeal to the increasing number of baby boomers from North America and Europe who are looking for a different option for retirement.


It is known that most people with financial stability are hooked to the collective dream of owning a second home and retiring in a foreign land. Also making investments in a tropical haven has lured hundreds to Panama. Whatever the preference Panama has something to offer everyone. Favorable retiree conditions like tax exemption on foreign source income Panama make the option to investment and live and Panama too good a deal to pass up for many.

Located on the Pacific Ocean and just an hour drive from the Caribbean coast, Panama Cityis a cosmopolitan and modern metropolis; its skyline surprises with high rise buildings overlooking the Bay of Panama. A whole range of apartments and condominiums are available for purchase to suit all budgets, most with ocean views, that make them an excellent investment opportunity for rental or potential appreciation, particularly from Avenida Balboa to Costa del Este, through Punta Paitilla, Punta Pacifica and Coco del Mar. U.S. style shopping malls featuring entertainment facilities, a hotel and convention center. Single family homes and condominiums are also available in attractive suburbs. Other new options being developed in the city are lofts, villas and condo hotels where owners and guests can share the amenities and social areas adding more variety to the already attractive offer for living or investing.

The Superintendence of Banks which is the entity governing Panama’s Banking Center, has established rules for access to investment funding in the mortgage loans sector. Some of the general rules applied to these operations are:


  1. Traditional Customers with experience in the field, due diligence of promoters commercial history to verify experience.
  2. Foreign promoters must be associated with local promoters. Usually foreign developers are not eligible for financing unless they have renowned experience in the market.
  3. Financing of direct costs, guaranteed with first mortgage over the lot. Only additional collateral guarantee in case of higher risk investments.
  4. Promoter’s initial funds and pre-sales installment form potential buyers must cover one third of the project’s estimated cost.
  5. A 10% of the total cost of construction should be contributed by the developer.
  6. Different disbursement mechanisms during progress of construction works: : 

** Time deposit collateral as required by the Bank.
** Funding comes from the promoter initial contribution to the project (as well as pre-sales installments paid by potential buyers) and then from bank’s financing.

  1. Apportionment of 10% in submission of bills, and a retention of 10% which is deposited in the developer or contractor accounts, which shall returned when the project is concluded.
  2. Funding based on the maximum value per m² in urban areas and the interior of the country. US$1200 to US$1400 in the metropolitan area, depending on dynamic sectors as: San Francisco, Avenida Balboa, Punta Pacifica, Costa del Este, Ricardo J. Alfaro and from US$1400 to US$1500 in beach and mountain projects.


-It must represent approximately 20 to 25% of the total project’s funding. 
- It takes an approximate of 40 to 50% of pre-sale for approval. 
- It is common practice to require pre-sale payments being made at the bank, for control purposes. 
- Discounts to related individuals, corporations, and companies related to the pre-sale phase, barters, transfers, assignments, etc. 
- Financing if planning to reside in the project. No financing if buying departmental units for investment purposes (policy). 
- Speculation is highly controlled. 
- Small areas projects (form 90 to 110 m2), but with a high cost per m² (from 2,000 to 4,000 per m2), are not in demand and are usually developed for speculation.

As of June 2007, the national banking center had disbursed U.S. $ 2850 million in financing for mortgage loans destined to 280 projects among houses and apartment buildings. Credit is divided between private banks (265 projects), Panamanian banking institutions (140), foreign banks (125) and government banks (15). 
The Panamanian government incentives for the restoration of the historic Casco Viejo district encourage investment here, this area reminiscent of New Orleans or SoHo years ago abounds with shells of graceful buildings that are crying out for renovation. Already restaurants, ateliers, and apartments are tucked into the graceful squares between the museums, National Theatre and the Presidential Palace: even the dungeons beside the “French” Plaza house a restaurant and jazz club. An investment here will enable you to live in history and the buildings can only appreciate in the years to come.

Regarding investment in this area, the Office of the Casco Antiguo presents the following dispositions:

Type of buildings to conserve and restore those:

1. Of great value, because they are less than 1850.
2. That has grand expressions of the architecture of the time.
3. That conserves the important architectural elements.
4. That have little architectural value, but that are of great value, because they reflect the characteristics of the site (environment)
5. After 1940, that have little architectural value or of the site and may be rehabilitated and have rights to the tax incentives

Preferential mortgage loans for the restoration, destined to:

A.1.Purchase of a building
A.2 to the financing of the total or partial rehabilitation/restoration of a building, or
A.3 the construction of a building, on a barren land.
A.4 the mortgage loans of the current lessees to finance the purchase of the buildings it occupies (article 9).


Real Estate Promoters / Investors

It is deductible of income tax, the expenses for the construction/rehabilitation/conservation/illumination of parks, green areas, churches and public spaces.

  • Exonerations up to 2007, of payment of income tax, of the utilities arising from: lease/sale/transfer of ownership, commercial and professionals.
  • Exoneration of property tax, during 30 years, of buildings built, rehabilitated or restored.
  • Exoneration of importation tax on equipment and materials used in the restoration.

There are still opportunities to purchase large properties on the former US military bases, set among wide avenues, green lawns and coconut palms; many have been converted in to small hotels, apartments and palatial homes. The locations are a stone’s throw from a rain forest but well-positioned close to the national airport and intercity bus terminal.

Suburban areas are increasing in popularity, particularly due to the new bridge over the Canal, Centennial Bridge (Puente Centenario) that opens up the areas of Arraijan, Chorrera and the shores of Lake Gatun for development.

Outside Panama City, excellent properties are available for developers and individuals. The more remote the location the more reasonable the cost but be aware that you may be far from utilities or roads.

hour or so along the InterAmerican Highway, there are Pacific beaches where small beach communities abound; above them higher mountain locations combine cooler temperatures with ocean views. Retreats in mountain sites like El Valle and Altos de Santa Maria are very popular with expatriates while the up-market resorts of Punta Barco, Vistamar, Buenaventura and Coronado with its elegant beach properties and golf course appeals both to expatriates and Panama city weekenders. Foreign investors also are buying properties and homes in other beach developments in San Carlos, Corona, Santa Clara and San Jose.


The real estate in Bocas del Toro offers beautiful Caribbean beach property. Here the islands are surrounded by palm-fringed golden sands and turquoise waters where the rain forest meets the ocean. Here families shop by boat, enjoy water sports and the natural beauty of this wonderful location - better yet it is still affordable. Whether you are looking for a small lot or a small hotel we can help you find it. Several planned residential resorts like Red Frog Beach Club are being developed. Most buyers are Americans, Canadians and Europeans. 

The Pacific Coast of Chiriqui offers secluded beaches of black or white sand including island property. Developments are beginning at Barqueta, Boca Chica and Puerto Armuelles.

In the cool Chiriqui highlands, the jewel in the crown is Boquete, voted one of the top four best retirement destinations in the Western Hemisphere by well known international magazines. Due partly to its beauty and temperate climate, buying real estate in Boquete is the choice for many foreign retirees and there is a growing community of expatriates. However, at the same time, it remains a special local community of some of the friendliest people you will ever meet. The cost of living is very reasonable here as there is no need for heating or air conditioning and the local vegetables and fruit not only taste great but are incredibly cheap. Your choice can be a lot in a modern development or a more remote finca or coffee farm. Imagine sitting beside a crystal clear stream, enjoying glorious views toward the green hillsides and cloud forests dominated by the extinct volcano, Volcan Baru, and drinking one of the best cups of coffee you have ever tasted. That is the taste of Boquete! An investment here has tangible residual benefits!


Other nearby areas like Volcan, Potrerillos and Caldera are attracting major investor interest. We will be pleased to show you our Volcan, Boquete and Chiriqui real estate properties and others nearby in this beautiful region, including the Chiriqui beaches.

The Pacific Coast of Chiriqui offers secluded beaches of black or white sand including island property. Developments are beginning at Barqueta, Boca Chica and Puerto Armuelles.

During the last 2 years, many 2nd home investors and retirees have purchased in the beautiful beaches of the provinces of Chiriqui, Veraguas and Los Santos. The best known areas are Boca Chica, Lajas and Barqueta in Chiriqui; Torio, Cebaco Island, Bahia Honda and Santa Catalina in Veraguas; and Pedasi and Cambutal in Los Santos.

Last, but not least, are the islands “ the Pearl Islands “ now famous because of the Survivor reality show, the Veraguas Islands including the Coiba paradise, declared National Marine Park, and the Parida Islands, off the Pacific coast of Chiriqui; all offer incredible opportunities for purchasing land to develop hotel & residential resorts, marinas & golf clubs in island dream locations, now available for purchase by foreign investors under the new Law 2 of 2006 (Look for Summary in this Website). We repeat that most properties that we have in these areas are unlisted properties, so it’s always recommended to contact us.

With all these dreams to turn into reality, we would be remiss if we did not include a few words of caution to help you hold on to your dream.

The acquisition of real estate abroad requires careful and professional advice. Panama does not have a multiple listing service for realtors and in many areas unlicensed and unqualified individuals will approach you to sell you property, or they may sell thru the internet. If you use a licensed realtor you have some protection if your purchase is found to be untitled or in contentious ownership, for example some family owned properties cannot be sold unless all parties agree. A reputable, licensed realtor like The Panama Investor researches the property before it is offered for sale. It is always wise to ask to see a copy of the real estate license. The realtor must be able to give you the finca number of the property (every property has one regardless of type or size).


The Panama Investor lawyers will protect your interests and carry out due diligence on the property and check your contract of purchase. It is important to ensure the property is titled with a registered plan. Your lawyers can confirm that your survey matches the registered boundaries even within a development. When purchasing in a development, you should check that the master plan has been approved and utilities and roads are guaranteed. Be aware that there is land offered for sale in Panama that is held by right of possession only. 


The Public Registry in Panama is an institution that offers security for the investor and guarantees transparency in the transfer of real property. Any liens, mortgages, attachments etc., are recorded against a property. A certificate can be obtained by your lawyer from the Registry to show the status of the property. Needless to say, all properties should be verified in the Public Registry and your purchase and change of ownership must also be registered. In the Republic of Panama, foreigners have the same rights as Panamanians when purchasing and holding property.

At the Panama Investor, we have licensed real estate agents, lawyers, insurance specialists, mortgage brokers, investment advisors and other professionals to assist you on all your real estate needs.

We can help you with:

  • Locating properties in Panama City, Beaches, Islands or Mountains
  • Forming a company to own your property 
  • Legal services to purchase the property 
  • Applying for your residence program 
  • Title insurance 
  • Home owners insurance 
  • Bank mortgage financing
  • Others

If you are a developer or promoter, the Panama Investor team of agents, lawyers and experts will provide you a variety of services from the pre-purchase of the property to all phases of development including structuring, subdivision, financing, contractual, design, environmental, construction, permitting, pre-sale and sale. We will be glad to provide you access to our “List of Recommended Professionals” formed by first class designers, engineers, architects, environmental consultants, builders and many others.