2024 Guide to Investing in Panama

Angelo Martinez

By Angelo Martinez

Every year, more people and companies from other countries get interested in putting their money into Panama. Jose Rojas Pardini, Minister Counselor for the Facilitation of Private Investment in Panama, says this trend is going to keep up from 2022 to 2024.

It makes a lot of sense because Panama is in a great spot on the map, its economy is getting bigger, it doesn’t have much inflation, and it has a strong set of rules for business. If things keep going this way, Panama could stay a top spot for people from all over the world to invest.

But, just because Panama is a great place to invest doesn’t mean you’ll always make money. It’s like having a fancy sports car doesn’t make someone a great driver.

So, we’re here to show you how to make smart investment moves in Panama. Our guide is packed with advice, whether you’re interested in buying property, starting a business, or just want to learn more about investing here.

Why do people invest in Panama?

Location, Location, Location

Panama is unique in Central America because it connects two massive oceans—the Atlantic and Pacific. Thanks to some amazing engineering, this led to the creation of the Panama Canal, a true marvel of the modern world. The Canal is like a superhighway for ships, linking 180 sea routes, 170 countries, and over 1,920 ports.

Plus, getting around by air is a breeze with six international airports that connect Panama to over 90 big cities across the globe.

Steady economic growth

Since 2005, Panama’s economy has been on the up and up. Back in 2005, the economy grew by 6.4%. Fast forward to today, and Panama is leading the charge in economic growth in its region, says the Economic Commission for Latin America and the Caribbean (ECLAC).

And get this—unemployment dropped from 18.5% to just 7.4% in three years. That’s huge! It shows how stable Panama’s economy is and how many more jobs are popping up.

A low inflation rate

Inflation is when prices go up, making everything more expensive. Luckily, Panama’s got a good grip on this, keeping inflation between 1.9% and 2.3%. For the past decade, inflation hasn’t crossed the 3% mark.

The balboa and the American dollar are both used as currency in Panama this is what helps keep their inflation low. So payments, transactions, withdrawing money from ATMs, and other types of financial operations will be quick and secure.

In Panama, the law treats everyone the same—locals and foreigners alike. That means you have the same rights to own property, start businesses, and invest. Anyone who meets the legal requirements and has the means to do so can invest in Panama.

There’s even a special law (Law No. 54) that’s been around for over 20 years to protect folks from other countries who want to invest here. You can make your money, keep your profits, and send them back home if you need to.

How do I invest in Panama?

Buying Process for Foreigners: A Step-by-Step Guide

  1. Find Your Dream Property: Start by browsing trustworthy platforms, like our own, or work with a reliable real estate agent. You can also explore Facebook Marketplace for options. Remember, Panama is largely a market where owners sell directly.
  2. Due Diligence: It’s crucial to check the property’s legal status to ensure it’s free of debts or liens. Understand exactly what you’re buying. Be extra cautious with properties that only offer a “Right of Possession” as these can be more complex and riskier.
  3. Offer and Acceptance: Ready to make it yours? Put in an offer. Once it’s accepted, you’ll need to sign a Promise to Purchase agreement. This document outlines the terms of your intention to buy.
  4. Settle the Terms: Discuss and agree on how you’ll pay and transfer the property. If you’re considering a mortgage, know that Panamanian banks do lend to foreigners, but they’ll ask for detailed documentation. Alternatively, private lending might be an option worth exploring.
  5. Closing: The final step is to sign the official deed in the presence of a notary and then register the property under your name. This legal step makes everything official.

For those new to purchasing property in Panama, we strongly recommend enlisting a lawyer to navigate the legal aspects smoothly. Having expert guidance can help ensure your investment journey is as seamless and secure as possible.

Avoiding scams and mitigating risks

Panama offers a wealth of investment opportunities, but like any lucrative market, it’s not immune to scams. To safeguard your investment and navigate the market confidently, it’s essential to stay vigilant and informed. Here’s how you can steer clear of scams and mitigate risks effectively:

  1. Do your homework: Before you invest, make sure you know what you’re getting into. Research the company or person you’re investing with. Check their background, and make sure they’re legit.
  2. Ask questions: If something seems too good to be true, it probably is. Ask lots of questions and get answers in writing. If the person you’re dealing with won’t give you straight answers, walk away.
  3. Get everything in writing: Make sure you have a contract that spells out all the details of your investment. If the person you’re dealing with won’t give you a contract, don’t invest.
  4. Consult with Experts: Don’t go it alone. Engage with local experts, including lawyers, real estate agents, and financial advisors who understand the Panamanian market. They can provide invaluable insights into potential scams and advise on risk mitigation strategies.

As you see, deciding to invest is not an unattainable activity, as you may have thought. Panama’s geographic location, low inflation, high economic growth, and strong legal support make it an excellent choice for investors.

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