Expat Living in Panama

John is a Canadian investment banker who moved to Panama with his family (wife and two children) for personal tax reasons. Before he moved, he was about to make around USD 10 million in personal income form an IPO he launched.

Due to giving up Canadian tax residency prior to moving, John was able to save himself around 60% tax on the personal gains he made from the deal, which in his case was around 6 million dollars. This is a typical story of many who wisely move to Panama to take advantage of the tax optimization.

John was also able to reinvest much of this in the bonds and stocks, but because he was now a Panamanian tax resident, he further saved himself many more millions in taxes on his personal gains from passive investing.

The costs of living were about 30% higher than in Canada but, when you save so much on taxes, who really cares. Further, the price of real estate they found was so much cheaper that they were able to buy a huge 400 square meter apartment in the best part of the city, with ocean views from around 700,000 which would have cost them around 5 million in Canada.

His wife nagged about the lower schooling standards in Panama, even for the best international schools, but soon they found a karate teacher from Venezuela, who was the world´s champion and a Ukrainian music teacher who sang previously at La Scala. They found there were so many talented expats here that they could hire tutors for their children and actually achieve a better level of education.

Their social life for the first few months was unsatisfactory because they could not speak Spanish, and they found that they and their children found it difficult to communicate with the locals. However, soon they discovered a community of over 2,000 Canadian expats, numerous international families from Italy, France, America, and Russia, and began to have the best social time of their lives. Panama is so full of diverse and interesting people that one gets the impression that expats here do nothing but attend parties sand socialize. In fact, Panama seems to have more holidays and social events than most countries due to having catholic, protestant, Jewish, Russian and, of course, Panamanian holidays celebrated all at the same time.

John found that, once you get to know them, Panamanian businessmen and politicians are very open and welcoming. Because he lived in the best part of town, he regularly got invited to parties by wealthy Panamanian business leaders and eventually met the president. Panama is like a small business village located in a large cosmopolitan city, which means you can literally be having coffee with the prime minister without any security or formality, simply because you met him at a social gathering or a party. The people here are open to new ideas and new business opportunities because they need (and know they need) more people and capital to fill their vast spaces and opportunities with know-how and expertise.

What took John a lifetime to achieve in Canada, in terms of business connections, opportunities and social connections, he achieved in Panama in only one year and now he is adviser to the government and his wife is friends with Panama´s first lady.

Jenny, his wife, was also initially quite worried about the stories she heard about crime in Panama City, but in the year that they have been here she has found it one of the safest cities she has been to, certainly safer than Miami and safer than anywhere she has travelled in Central or Latin America. The children are taken to school via a secure private bus service and the family can walk all over the city without feeling unsafe.

John has bought a sail boat and taken up sailing, the waters of Panama are full of beautiful tropical islands and it´s a sailor´s paradise but, unlike Canada, he has a captain which costs him only 600 a month and looks after the boat while he socializes. When they get bored, they fly to the numerous destinations near Panama: Costa Rica, Colombia and Cuba are only a few hours away and so is Miami. Further, there is no winter here, so they live in a perpetual summer.

Sometimes in the evenings they go to Casco Viejo, Panama´s old town, which reminds them exactly of Madrid or Barcelona with its 16^th century buildings and multiple cafes and restaurants.

For shopping they have MultiPlaza which stocks many of the world´s best international brands at a fraction of the price of Europe due to the low customs and taxes. Often Jenny can buy a Chanel or Gucci at a price half of what she would have paid in Canada although admittedly the stock does not change with the season, probably because there are no seasons in Panama.

John and Jenny have realized you can find everything in Panama City if you know where to look.

And, if you are in the position of not being able to afford the lifestyle of Panama city which is admittedly more expensive than Miami, then you, like many retirees, can move to the dozens of locations outside Panama city such as Chiriqui and Pedasi, where life is like it used to be and the cost of living is up to 40% less than in the United States.

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