The Ultimate Guide to Expat Living in Panama City

Panama City offers First World infrastructure with Third World prices: modern amenities, dollarized economy (no currency risk), territorial tax system (foreign income untaxed), and the Pensionado program for retirees with $1,350/month pension. You can drink tap water, enjoy high-speed internet, and fly direct to US/Canada. Panama City has become one of the top expat destinations in the Americas.

Introduction

Panama stands out among the world's expat destinations because it offers solid infrastructure and First World amenities close to North America. For value and variety, Panama can't be beaten. Here, you really get what you pay for, and a little money can buy you a lot of luxury. Even if you're living on a pension, life here is easy, breezy, and fun.

Panama's popularity has much to do with its modern infrastructure, proximity to the U.S., beautiful scenery, and mild climate. Pair that with the Pensionado program that offers residence and special benefits to pensioner expats from North America and beyond, and you have an ideal retirement destination.

You Call This a Third-World Country?

With outstanding growth over the past two decades, Panama's cities and hubs began to attract everything from golf clubs and beach resorts to shopping plazas, grocery stores, restaurants, clinics, and more. Nearly everywhere you go, there's high-speed internet, reliable power, and water you can drink straight from the tap. Cable television and cellular service are ubiquitous, the roads are the best in the region, and every year new investment leads to improved conditions.

Panama offers both freedom and stability in important areas, from the pro-business, foreigner-friendly government to the real estate market and strong, growing economy. No other country in the region can boast such a steady, dependable track record.

Panama Has Cities, Mountains, Beaches, & More

Despite Panama's tiny size, it's incredibly diverse. The long Pacific and Caribbean coastlines offer endless opportunities for waterside living, not to mention fishing, scuba diving, surfing, and so much more. Mountain hamlets like Boquete and El Valle boast cooler climes than you'd expect in the tropics. There are rural areas for farm-loving types, tropical rainforests everywhere you look, and hundreds of islands dotting bright-blue waters.

Though the tourism industry has been growing, Panama has traditionally been known as a business destination. Panamanians are accustomed to foreigners—and have been since before the Panama Canal was completed in 1914. There isn't the envy or racial tension you might find in economically deprived areas where wealthier opportunity-seekers have swept in. In part, that's because Panama is a land of opportunity, and locals who strive to improve their lot can go far.

Panama City boasts an ever-changing skyline reminiscent of Hong Kong, strong banking and business sectors, and almost too many events and activities to choose from. Locals from different walks of life wear jewelry, drive new cars, carry smartphones, and enjoy shopping. It's the kind of environment that makes expats feel safe, no matter what they look like.

Lower Your Cost of Living in Panama

Choose one of Panama's trendiest areas or retire to your dream home in the lush green countryside. No matter where in the country you go, you're likely to find that not only does your cost of living go down, your blood pressure does, too.

Fruit, vegetables, and fresh fish are abundant and inexpensive. In many communities, expats grow accustomed to walking instead of driving everywhere. And fast food joints are not nearly as ubiquitous here as in the U.S.

Back home, you may spend hundreds of dollars a month on everything from car and health insurance to doctor and dental consults to medication. But most expats in Panama find these things are significantly cheaper. Real-life examples include visits to small clinics for $11, $6, and even as little as $2. Auto insurance as low as $40 a month. And dental visits for under $30!

Though apartments in Panama City rent for $800 to $1,500 a month, there are locations where savvy expats have discovered they can rent for $500 a month or less. Countrywide, water bills in Panama are typically under $20 a month. You can buy hundreds of minutes for your cell phone for $5. And there are still plenty of restaurants where you can grab a beer for half the price you'd pay in the States.

Top Ten Reasons to Live in Panama

1. Consistently Ranked Top Retirement Destination

Panama consistently ranks among the top five retirement destinations in the world. In fact, it has taken the number one spot in International Living's Annual Global Retirement Index many times.

2. Pensionado Program Benefits

Resident retirees can avail themselves of many benefits and discounts, such as:

• 50% off entertainment
• 30% off bus, boat, and train fares
• 25% off domestic airline tickets
• 20% off medication
• 10% or more off healthcare costs

3. No Currency Exchange Hassles

If you're from the U.S., you don't need to worry about confusing exchange rates. Panama uses the U.S. dollar as its official currency.

4. Affordable Cost of Living

In Panama, the cost of living is low, especially considering all the benefits to life here. A couple can live well on $2,600 a month or less, including rent.

5. Sunshine Year-Round

In Panama, you'll see the sun nearly every day of the year. At sea level, temperatures range from the mid-70s F to the high 80s F. And there are no hurricanes here, ever!

6. Close to North America

Direct flights from Miami to Panama are just 2 hours and 50 minutes, making it easy to visit family and friends back home.

7. Affordable Real Estate

From two-bedroom condos for $160,000 in Panama City to brand-new houses for $95,000 in David to traditional homes for $80,000 in Las Tablas, there's plenty of affordable real estate available for you to buy.

8. Top-Notch Medical Facilities

Panama has many top-notch medical facilities. The Punta Pacifica Hospital in Panama City is affiliated with Johns Hopkins International, ensuring world-class healthcare standards.

9. Diverse Landscapes and Lifestyles

Whether it's lush green valleys in the highlands, white-sand beaches on the Caribbean, or cosmopolitan city life in the capital, Panama has something for everyone.

10. Well-Established Expat Communities

There are already well-established expat communities in areas like Panama City, Coronado, and Boquete. Finding like-minded expats is a cinch, and these communities will be there to lend a helping hand when you first move.

The Pros and Cons of Living in Panama

Pros: Why Expats Choose Panama

Pro: Panama is Safe for Expats

As a rule, Panamanians don't like confrontation. Panama, like everywhere, does have some crime, but it is usually petty theft. Use the same due diligence and common sense that you would in any setting worldwide, and you will be fine.

Pro: Panama Uses the U.S. Dollar

With the dollarized economy, living and doing business in Panama is easy. Many U.S. credit cards don't charge extra fees for making purchases in Panama, ATMs are easy to use, and buying property is easy.

Pro: Panama's Residents are Happy People

Panamanians love their country and are extremely cheerful people. They will take the time to help you, even if you don't speak Spanish.

Pro: Panama Has an Affordable Cost of Living

In Panama, you can live very well on a lot less than in many other countries. As a couple in Chiriquí, you could live comfortably on $1,995 a month. But you can spend as much or as little as you want to find your own version of a perfect lifestyle.

Pro: Panama Has High-Quality Healthcare

Panama's healthcare is some of the best in Latin America. Healthcare costs are much less than in North America, and the quality of care is excellent. Panama City offers top-notch medical facilities, equipment, and well-trained doctors in all areas of medicine. More remote areas have local clinics where you will often find doctors visiting from hospitals in Panama City. Larger cities have great hospitals and specialists, and no matter where you are in the country, you can almost always find an English-speaking doctor for your care.

Pro: Panama Has Modern Infrastructure

New roads and bridges are always being built and maintained. Good, reliable internet and good cell phone service are country-wide. In most areas of Panama, you will find good drinking water from your kitchen faucet.

Cons: Challenges to Consider

Con: Panama Embraces the "Mañana" Principle

The definition is "when they say tomorrow, it just means not today." This attitude can be one of the most frustrating things for expats to get used to until they have acclimated to a slower lifestyle. Take a deep breath and lower your blood pressure. It will get done, but just not today.

Con: Panama Has Its Share of Bureaucratic Problems

Getting anything done at a government office here requires patience and time. Don't compare how things are done in the U.S. to Panama or you will be disappointed. Some things move slowly in Panama, and you won't get them to move any quicker by criticizing.

Con: Panamanians Love to Party and Enjoy Life

A popular motto is "work to live, don't live to work." That means parties are frequent and usually go into the early hours of the morning. This can be annoying, but if you become part of the group and go with the flow, you will find yourself partying and enjoying social time with your Panamanian neighbors.

In the end, the cons of Panama are only cons until you realize that you just need to adapt, go with the flow, slow down, and make living each day your priority. Latin culture is different, but not bad. When you surrender all your preconceived notions about what Panama should be like, the cons disappear, and you are left with the best of Panama.

Insider Tips for Living in Panama

Panama Holidays and Planning

If you plan to do business while in Panama, check the official list of holidays before you schedule your trip. Keep in mind that it's common for traffic jams to form on the first and last day of a long weekend, as city-dwellers leave town or return en masse.

Important dates and bank holidays in Panama include New Year's Day, National Martyrs' Day, Carnaval, Good Friday and Easter, Labor Day, Independence Day celebrations in November, and Christmas. Note that the government often decrees "dias Puente"—the practice of observing fixed-date public holidays on the following Monday to create a long weekend and encourage internal tourism.

Tips on Tipping

Restaurants: If you're impressed with the service, it's courteous to leave a tip. The usual amount is 10% to 15%. A recent ruling prohibits restaurants from automatically adding the tip, but always check your bill to make sure.

Airport and Hotel Porters: Tip as you would in the U.S. ($5 for hauling a couple of bags from the taxi to check-in, for example).

Taxi Drivers: Taxi drivers in Panama are not generally tipped unless they do something special, like help you carry bags.

Tour Services: You should tip tour guides, tour bus drivers, boat captains, and private drivers for good service; 5% to 10% is customary.

Valet Service: Most restaurants offer valet service, for which you are expected to tip at least $1. Some high-end places charge $3 to $6.

Housekeeping: It is customary to tip housekeeping in nice establishments. You can leave $2 to $3 on your pillow every morning, or leave a lump sum on the day you check out.

LGBTQ+ Community and Acceptance

Panama tends to rank high on political and civic freedom indexes, and gay expats report feeling comfortable here, thanks in part to an established LGBTQ community. In 2008, an antiquated law criminalizing same-sex activity was abolished. In 2006, Panama ruled that transgender citizens who had undergone sex assignment surgery could change their legal gender on birth certificates.

A new gay marriage proposal is another example of how progressive Panama is. In 2018, a government official signaled that Panama would likely comply with a landmark Inter-American Court of Human Rights ruling that recognizes same-sex marriage and transgender rights.

Legal Considerations: Marijuana Laws

Though some countries in Latin America have taken steps toward legalizing marijuana use, it continues to be illegal in Panama. There are groups lobbying for the approval of at least medical marijuana to start with. Though marijuana use is fairly common in Panama, it's not as openly used as in other countries, and sentences for possession can include significant jail time both prior to and after trial and/or fines, community service, and rehab requirements.

Conclusion: Living Your Best Life in Panama

Panama offers an exceptional quality of life for expats in 2025, combining modern infrastructure, affordable costs, excellent healthcare, and a vibrant international community. Whether you're seeking retirement, remote work opportunities, or a fresh start in a welcoming environment, Panama provides everything you need to thrive. There are parts of Panama where one can live on $1,300 a month, including rent, utilities, groceries, and outings. Places where you'll find few cons and plenty of pros, from pretty views to friendly locals, where you feel miles away from the hustle and bustle of the rat race, and live a good life, pure and simple.

Related Panama Guides

• Panama City Neighborhoods Guide
• Moving to Panama Tips
• Living in Boquete (Mountains)
• Housing in Panama City

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