Moving to Panama: A Practical Guide for Americans

Panama is the practical choice. It uses the US dollar, it's about three hours by air from Miami, and its Pensionado visa remains one of the most straightforward retiree programs anywhere: show a qualifying lifetime pension and you can get an indefinite residence permit. Add a tax system that doesn't tax foreign income, and you can see why so many American retirees look here. Here are the rules as of October 2026, along with the downsides.

Panama at a glance

Why Americans move to Panama

Convenience is the first draw. You won't deal with currency conversion on your Social Security check. Flights to Miami, Houston, and other US hubs from Tocumen International Airport are frequent, so family visits and US medical appointments are easy to arrange.

Panama City is a modern capital with high-rise apartments, international hospitals, and big-box stores that feel familiar. An hour or two away you can live on the Pacific beaches, and a short flight takes you to the cool mountain town of Boquete, a long-time retiree favorite.

Panama also has a formal discount program for retirees. Holders of jubilado/pensionado status are entitled by law to discounts on a range of everyday services. The list and percentages are set by Panamanian law, so ask your attorney for the current version rather than relying on online lists.

Residency options

Amounts are in US dollars (Panamanian balboas at par). Confirm current requirements with Panama's National Immigration Service (SNM) or a licensed Panamanian attorney.

The Pensionado visa

Panama's immigration service sets the rule plainly: your monthly pension or retirement income can't be less than $1,000, and it must be paid for life. That generally means Social Security, a government or military pension, or a corporate pension, documented by an official letter. Each dependent adds $250 a month. If you own Panamanian property worth more than $100,000 in your personal name, the pension minimum falls to $750.

Illustrative example: a married couple where one spouse receives $1,400 a month in Social Security qualifies as the main applicant plus one dependent ($1,000 + $250 = $1,250). If both spouses draw benefits, their pensions can be combined to reach the minimum.

The permit is indefinite, so there are no renewal cycles. Dependent children generally get temporary permits only. One practical point: in Panama, immigration applications are filed through a licensed local attorney. Budget for legal fees on top of government fees.

Friendly Nations

Panama's Friendly Nations program (officially "Países Específicos") once required little more than a local company. A 2021 decree tightened it. US citizens now qualify through one of three routes: a job offer from a registered Panamanian employer, a property purchase of at least $200,000, or a $200,000 fixed-term deposit held for three years in a Panamanian bank. The first permit is provisional for two years. You then apply for permanent residence.

This route suits people too young for a pension who want to buy property in Panama anyway. Panama also has a separate Qualified Investor program for larger investments. See our golden visa guide for how these programs compare globally.

Remote workers

Panama's short-stay visa for remote workers, created by Executive Decree 198 of 2021, requires a foreign employer or clients and at least $36,000 a year in foreign income, plus health insurance valid in Panama. It lasts nine months and can be extended once. It does not lead to residency. Compare it in our digital nomad visa guide.

Cost of living

Panama City's better neighborhoods, like Punta Pacífica, Costa del Este, and parts of San Francisco, cost close to what you'd pay in a mid-sized US city, especially for new condos. Prices drop in the interior, the beach towns, and Boquete, though imported goods stay expensive everywhere.

Electricity is the surprise for many newcomers. Air conditioning in the lowlands can produce large bills, which is one reason people choose the cooler highlands. Local produce, domestic help, and taxis are inexpensive. Imported groceries and cars are not.

Build your budget from current listings and your actual habits. Our cost of living guide explains how.

Healthcare

Panama City has private hospitals with modern equipment and many US-trained specialists. Care is thinner in rural areas, and serious cases are usually sent to the capital.

Panama's public Social Security Fund (CSS) mainly covers workers who contribute. Most retirees buy private insurance or pay cash for routine care, which is often affordable.

Medicare doesn't pay for care in Panama, but many retirees keep Part A (premium-free for most) and weigh whether to keep Part B for trips back to the US. Read healthcare abroad and international health insurance.

Housing

Foreigners can own property in Panama with largely the same rights as citizens. Limits apply near national borders and on some coastal and island land, where you may hold rights of possession or a concession rather than titled ownership. Make sure any property is titled in the Public Registry before you buy.

The State Department reports frequent complaints from US citizens about property deals in Panama, including fraud, broken contracts, and demands for extra payments. Use an independent attorney you choose yourself, not one recommended by the seller, and rent for at least six months before buying.

Rental leases usually require a deposit of one or two months. Furnished apartments are common in Panama City. See our housing abroad guide.

Taxes

Panama taxes residents and citizens on income from Panamanian sources only. Foreign income, including US Social Security, pensions, and investment income, is generally outside Panamanian income tax. Tax residence is based on being physically present and earning income in Panama for more than 183 days in the tax year.

The US doesn't have an income tax treaty with Panama. That matters less than it sounds, since Panama doesn't tax your foreign income. You'll still file a US return every year, report foreign accounts, and pay US tax on worldwide income. If you earn money from Panamanian sources, such as renting out a local property, Panamanian tax applies. Start with US taxes abroad and Social Security abroad.

Where expats live

• Panama City. Modern high-rises, the best hospitals, international schools, and the main airport. Hot and humid all year.
• Boquete. A mountain town in Chiriquí with cooler temperatures, coffee farms, and a long-established retiree community.
• Coronado and the Pacific beaches. About an hour or so from the capital, with beach condos, golf, and easy access to city services.
• David. Chiriquí's capital: practical, cheaper, with regional hospitals and an airport. Hot, but close to Boquete and the beaches.
• Bocas del Toro. Caribbean islands with a laid-back feel. Medical care and infrastructure are limited.

Honest challenges

Heat and rain. The lowlands are hot and humid year-round, with a long rainy season that brings flooding to some roads.

Bureaucracy runs through lawyers. Expect to pay legal fees, wait several months, and provide apostilled documents. See our apostilles and background checks guide.

Property disputes are a recurring problem flagged by the US Embassy. Do thorough due diligence.

Driving and infrastructure. Traffic in Panama City is heavy, and some rural roads are poor. A foreign license is valid for 90 days.

Safety. The State Department rates Panama Level 2, "Exercise increased caution" (issued August 19, 2026), mainly for crime such as theft and break-ins. Parts of the Darién region near Colombia and the Mosquito Gulf are Level 4, "Do not travel." Those areas are far from where expats live.

First steps

1. Confirm your route. If you have a $1,000+ lifetime pension, start with the Pensionado visa. If not, look at Friendly Nations.
2. Visit in both seasons. Try the city, the beaches, and Boquete. See our scouting trip guide.
3. Hire a licensed Panamanian immigration attorney. Get fees and timelines in writing.
4. Order documents early: your pension letter, FBI background check, marriage certificate if applicable, all apostilled.
5. Arrange health coverage before you go.
6. Rent before you buy. Give yourself at least six months.
7. Plan your US side: mail, banking, and state domicile. Use our moving abroad checklist.

Last reviewed October 18, 2026. General information only, not legal, immigration, or tax advice. Requirements change, so confirm with official sources before you apply. See our disclaimer.