Investment Opportunities in Panama

Panama has a variety of investment opportunities, including a burgeoning condo market in Panama City, miles of untouched beaches on the Caribbean coast and everything in between. While …

Panama has a variety of investment opportunities, including a burgeoning condo market in Panama City, miles of untouched beaches on the Caribbean coast and everything in between. While some markets are poised to become overbuilt, others are still full of long-term promise.

Real estate investors can choose anything from unspoiled beachfront property to downtown high rise condos. Other investments, such as businesses in the tourism and service sectors, could be promising because of Panama’s steadily increasing tourism industry.

In addition, many baby boomers, looking to stretch their retirement money and still enjoy a traditional retirement lifestyle, are moving to places both sunny and inexpensive. Panama draws many American retirees because of its proximity to the U.S. and the incentive programs it offers to retirees, such as tax exemptions and deferrals and discounts for entertainment and travel, among other things.

Further, Panama City’s reputation as a business center is gaining steam, and the city has begun to draw multinational corporations to the area.


Interest in Panama’s real estate market started "in the interior [of the country], where you look at places like Bocas del Toro and you look at places like Boquete, which were initially…destination locations that were hyped for their beautiful climate, low cost of living, cheap land" and other features, Matt Landau, founder and CEO of The Panama Report and a real estate consultant based in Panama City, said.

But "real estate prices have accelerated, particularly in the last two years," Lyle Burke, founder of, an investment discovery tour company, said. "There are still many good buys…many good investment opportunities, but of course, like any other emerging market, prices are coming up."

For lots on the Pacific, "you’re around $200,000 and for a house, you’re probably up around $500,000," Jeff Duda of Panama Casa, a property management company, said. "If you compare it to Florida, it’s still pretty cheap."

"I don’t know where in Miami you can buy a 200 square meter condo overlooking the ocean for $200,000 or $300,000," Landau said.

Prices are also rising because Panama’s international profile is increasing. Many multinational corporations now have locations in Panama. Panama is "a high-end business sector," and many multinational banks and law offices have set up operations in Panama, Burke said.

"Panama City is very much a business center of Central America," Duda said. "It is…the New York or Hong Kong of Central America." 

"From a business perspective, this country is going to boom quite a ways [into] the future," he said. "The Latin American country group is one of your fastest growing economies in the world right now."

This increased business activity is part of the reason why much of the focus of the real estate market has trended away from the interior of the country and become concentrated on Panama City itself.

"The transition over the past five years has gone mainly toward Panama City," Landau said. The real estate market has trended "more toward the city; it’s been less toward land."

Panama’s real estate market "has been growing exponentially for the last three years," Lucia Haines, director of Panama Realtor in Panama City, said. "I see this interest increasing."


There are a variety of opportunities available for those interested in investing in Panama. Most of the opportunities are real estate investments, but there are opportunities in service and tourism related industries as well.

Real estate investments on the beach are popular, with resorts seeing more overall success than individual houses, Duda said. Also, investors should remember that "the beach areas…are very seasonal, whereas in the city, you have demand all year round," he said.

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Service and tourism businesses, such as restaurants and tour services, are investments that can benefit from retirees, tourists staying in Panama—either in resorts or individual houses—and those stopping through Panama on a cruise. The increasing number of cruise ships stopping at Panamanian ports could be a huge boon for those interested in making service and tourism related investments.

For those interested, Panama still has a lot of beachfront property available. "Panama has dual coasts—Pacific and Caribbean sides—and a lot of real estate for development," Burke said. "For example, the Caribbean…is hardly touched at all."

About 75 percent of the Caribbean coast is undeveloped, with mile after mile of pristine beaches, Burke said. "For growth in the next 20 years in Panama, I think you’re going to see sector growth there in tourism and…all forms of, certainly, real estate based investments."

Investment opportunities in cities, particularly Panama City, tend to be geared toward businesspeople rather than tourists. "The business executive group is big on the short-term rentals. There’s a big demand for that," Duda said.

One notable businessperson investing in Panama is Donald Trump. "Trump announced less than a year ago that they’re building a tower in downtown Panama City," Burke said. "It’s probably three quarters sold out at this point, but that certainly attracted a lot of attention."

Short-term, full-service rentals are popular among those who travel to Panama, many of whom stay for one to six months, Duda said. "They like to have a place that’s almost like a hotel."

"On the short-term rentals, we’re basically 100 percent full," Duda said. "We actually turn people away because we actually have more demand than we have supply for the quality short-term rental that’s well located."

The location and the style of the rental itself are both important components in terms of determining a place’s success.

Investors interested in buying property in a city with the intention of renting should keep in mind that, "for purely a rental sense, the downtown areas are probably the best," Duda said.

Investors should also be aware, however, that some have already taken note of the opportunities available in Panama City and that the city is subject to the risk of overbuilding.

"To date, what’s worked is flipping. People who have bought condos in Panama City while that demand was way up there and the supply was still far below [were] buying their condos and flipping them in what amounts to no time—six months, a year," Landau said. "But this was back two, three, four years ago, when condo buildings were just getting built."

"The supply is nearing demand in Panama City," he said. This building boom has put Panama City’s condo market at risk of overbuilding, which would mean a drop in prices. Overbuilding in cities such as Las Vegas and Phoenix has led to a correction in those markets through falling prices. (For more on this trend, read our article on overbuilt markets.)

"Their skyline is full of new development," Burke said.

Those who want proximity to Panama City without being in it will likely be intrigued by a development being constructed directly across the canal from Panama City in the complex of the old Howard Air Force Base, which was decommissioned in 2000.

"There are plans for a $700 million mixed residential project. It will have high-end hotels, residential of all kinds, golf courses, shopping malls—it’ll have it all," Burke said. "I expect probably to see some actual presale opportunities coming up early next year."

Foreign investors

Panama, having witnessed Costa Rica’s success, is following in its footsteps by actively catering to foreign investors.

"Most major banks will provide financing for foreigners," Haines said. "They’ll finance up to 80 percent, generally."

"90 percent of the real estate on the market is freehold," Burke said. "You don’t have to live in Panama to own it. You have all the rights, the same as a Panamanian citizen."

"Foreigners do have protection," Haines said. "They’ve got the same rights as locals when it comes to purchasing and owning title property."

Further, "title here is fee simple. Once you own the title, it’s yours," Haines said. "Unless you obtain that land through arms trading, drug trading or people trading, nobody can take it from you." She said that title insurance is available and recommended "for peace of mind," however.

"For property insurance, it’s usually pretty inexpensive in comparison to other countries, such as the United States," Haines said. "Panama doesn’t have any real natural disasters."

Investors concerned about complications of leaving their property to their heirs can set up a Panamanian corporation to hold it, Burke said. "The cost [of setting up a corporation] is around $1,200," he said. "If something happens to you and your heirs go to Panama to clear up the legal work, to transfer the property to them, if it is in your name, then it’s a long probate process. [Panama’s] bureaucracy is slow and cumbersome. If you have it in a corporation, it’s a very simple process" to transfer the property.

"Business visas are also available for investors, who can put $200,000 in a Panamanian bank account "and then you can work and conduct business in Panama like a Panamanian," Burke said. "They allow you to use the money as a mortgage, if you will, for real estate that you buy, or as a guarantor."

Real estate agents receive a pretty standard commission in Panama. "Commissions are generally between 3 to 5 percent of the sales price," Haines said.

Haines recommended that foreign investors take advantage of property management services, which "do everything from overseeing construction to managing properties for rental….Usually the property managers will charge anywhere from 10 to 30 percent to manage the properties."

While Haines said that the investment process in Panama is simple and straightforward, she also recommended that investors work with an attorney. "It’s always a good idea to have somebody looking out for your interests, especially for first-time buyers."

Part of the reason for Haines’ recommendation is the fact that "Panama is a small country, and a lot of making it here successfully is…making good contacts," Haines said. "Attorneys are often a good point to start those contacts."

Good contacts are important because "real estate in Panama is not quite as organized as it is in the United States," she said. "We don’t have a multiple listing [service] so what we do instead is…form networks."

Another important reason for investors to make good contacts with trusted advisors is that more and more people in Panama want their share—or more—of the boom that is going on in the country.

"You’ll find a piece of property that you’re very interested in, and your real estate agent will tell you it’s $2 million, when in reality, the farmer told him that it was $1 million—meaning that the real estate agent is banking $1 million on the deal," Landau said.

To be certain that they are not overpaying for property or being swindled in some other fashion, investors should find trustworthy people who can go through the details of a deal with them and work with their best interests in mind.

"That’s a very tricky thing, especially if [Spanish] is not your language," Landau said.

Landau also stressed the idea of verifying all aspects of a deal before going through with any of it because "it’s very hard to sue in Panama." Some people have invested in bad deals, he said, and not been able to get their money back.


Panama is easily accessible for Americans, both in terms of its proximity to the U.S. and its dollar economy. Its infrastructure bests much of the rest of Central America, and its great weather, beaches and attractions are bringing increasing numbers of tourists and retirees to the country. For all of these reasons, it is also attracting a lot of foreign investors, who can benefit from the tax deferrals and exemptions offered to them.

"The allure is that it’s very, very new, and people are getting in way ahead of the boom," Landau said. He cautioned investors to do research before investing rather than getting caught up in the hype about Panama. "A lot of it is very, very well founded," he said. "A lot of it is not."

Because of the hype, Panama has increased in popularity with investors. There is a boom going on, and, as the U.S. housing market proves, those do not last forever. As a result, there are some markets within the country that are at risk of overbuilding. These markets will likely face corrections in the coming years. Investors might be wise to wait to purchase property during the correction, when prices will have dropped.

Still, "this is a great opportunity and time to be investing in Panama, or to be looking at that possibility," Burke said. "My opinion is it’s still in the first 20, 25 percent of the growth curve."


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