Perhaps you have been dreaming of retiring to a warmer country for years? Or you may be moving to Panama for a business opportunity that has presented itself.
Whatever your reasons for relocating to Panama, here are ten questions that you should ask before you move here:
#1 What is your primary reason for moving to Panama?
If you are being transferred to Panama for work, then you know why you are moving to Panama and how long you intend to stay. Irrespective, you should sit down and clarify your intentions and reasons for moving.
Before you decide that you are moving to Panama because you read somewhere that Panama is the happiest country on earth, consider the following questions:
- Are you ready to be immersed in a different culture and language?
- What do you expect to get out of the experience of living internationally?
- How will you broaden your network of friends, acquaintances, and business associates in Panama?
- Are your values and goals met by Panama and the community that you will be living in here?
- Are the people that you will be living among like-minded and supportive?
- What opportunities are you looking for?
- How hard will it be to build a favorable environment for success?
#2 What do I expect to get out of living in Panama?
This is closely related to question #1 – When you imagine living in Panama, what do you expect your life to be about?
Are you ready to live in the tropics with warm weather all year round? Have you experienced the weather in Panama all year round – including the humidity and heat of April-May? Can you live indoors with air-conditioning when it’s simply too hot and humid outside?
If you are planning to move to Panama, because you want to spend more time traveling in Latin America – have you checked the prices for flying to other parts of Central or South America? How do these prices compare with the costs from Medellin or Quito?
Make sure that you prepare a complete list of your expectations for living in Panama.
And now, do a reality check!
Go through every item on your list and ask yourself, “will living in Panama actually help me accomplish X?”.
Finally, carefully consider what you are leaving behind (family & friends). How will your new lifestyle and life replace what you are leaving? Have you considered deeply whether what you are moving towards in Panama is worth the cost of what you will have left behind?
#3 Have I done adequate financial planning for moving to Panama?
One of the biggest mistakes I see people make when they move to Panama is inadequate financial planning. They overestimate income. They underestimate the costs. And they certainly fail to factor in how long it might take to get something done “on island time” when it comes to building anything.
If you are moving to Panama, hired by an international company, one question to ask your employer is how secure your new position is. Will your work permit be tied to that particular position – or can you get another job when this position terminates? Will you lose your right to live & work in Panama if you lose your job?
Other questions to consider: What is the culture like in your new company? What about your soon-to-be coworkers? If you do not enjoy the culture or the people you work with, you will be miserable.
If you plan to move to Panama without a secured job, assess your finances and determine the additional cash flow you expect to have coming in.
Do you have a backup plan in place if things do not go as planned in Panama? What will you fall back to if, at first, you find obstacles you never expected?
No matter where you live, bills must be paid and obligations on your time will still exist. If you have never done this before, you should know that expats invest a lot of time, money and energy when they move. Moving overseas is expensive. The costs include hiring international movers, getting insurance, securing a new residence, and more. Be sure to meticulously plan your budget and have savings in the bank to cover any gaps.
What is the cost of living in Panama?
The cost of living is a critical factor to consider when deciding whether or not living in Panama will be successful. Whether you’re working abroad, traveling or using your savings to live here for a while, you need to determine how much daily life will cost. Can you afford it?
Find out what you can about how much you will spend on groceries, utility bills, purchasing a car, petrol, public transport, and the like. Do your research carefully so you know what to expect.
#4 What are the application taxation rules for my particular income and situation?
One of the finer points to consider is tax treatment. Twenty years ago, any income you earned internationally paid no income tax in Panama. While the tax rules still state the internationally earned income is not subject to taxation in Panama, the definition of what is income earned in Panama has changed.
It specifically changed to include income earned from Panama. So, if you are sitting in Panama 365 days of the year (actually more than 180 days) and working here to earn internationally, Panama now considers that income to be earned “from Panama” and therefore subject to taxation here.
Will you have tax reporting requirements for Panama and another country? Each country has a different tax system and countries like the USA will tax their citizens no matter where in the world they live.
#5 Where can I live comfortably in Panama?
As I have already touched on in previous blog posts, this is probably one of the most critical questions to ask yourself besides financial stability. Where you live will determine how successful your move will be, the potential for building long-term job and personal prospects, and whether you’ll be able to adapt to the cultural change you’ll encounter.
#6 How will I build a new support network for myself in Panama?
This is particularly important as Spanish is the first language in Panama. How will you create for yourself a new support network and connections in Panama?
If you fail to establish a network, you may find yourself alone for the days and weeks after arriving here. A job can provide the perfect opportunity to meet other expats or locals, making new connections. Additionally, consider places you could visit, clubs you could join and social events that will have people with interest similar to yours.
One of the biggest challenges you face is the support that you take for granted.
For example, who looks after your pets when you are out of town for the weekend? Who do you call to drop by the pharmacy to pick up some pain medicine if you pull a muscle in your back? How will you find a new babysitter for date nights?
Moving to a new country means rebuilding your support network from scratch.
#7 How will I embrace this experience and adjust to the culture shock?
While it’s true that moving overseas is the best way to learn a new language, by full immersion, it’s also a stressful way to learn. If you don’t speak Spanish, how will you learn it?
You will encounter cultural differences no matter where you relocate. In the planning process, be sure to research what those differences are to give you time to adapt your ways. How well do you cope with change in your life? Do you enjoy doing new things? Do you crave new experiences?
Building a good support network can be essential in transitioning through the culture shock.
#8 How many times will I visit before making a final decision about moving to Panama?
There is no better way to figure out if your dream location is a good fit than to spend some time getting to know the area. Of course, if you are transferred here for work, that may not be possible. But if you intend to retire to Panama, or move permanently, you should consider visiting more than once before making the final decision to relocate to Panama.
While there is a cost with visiting – the cost of not doing the groundwork could be much higher.
#9 Have I based my expectations on realistic information?
Just like buying property, location is the key factor in planning a move. Are your expectations about the area where you plan to live accurate and reasonable? Have you researched living in Panama thoroughly?
Make sure that you are talking to many expats and locals, in different communities, to get a more complete image of life in Panama.
#10 How long am I prepared to live in Panama?
This is a question to ask yourself early in the process. You need to know this to help with financial planning, as well as managing your expectations. Are you planning and prepared to never move back or are you prepared to pay all the costs of moving but only stay a short time? If you are here short term, the culture shock will be less.
Also, deciding where to live and whether or not you will purchase a house in Panama will be impacted by this decision.
Panama immigration lawyers: for more information regarding the relocation options and Panama residency requirements, please contact our office.