How to invest in real estate in Panama as a foreigner?

 How to invest in real estate in Panama as a foreigner?

It is no secret to anyone that Panama is a country that is very popular for foreign investment, thanks to its first-class financial center, dollarized economy, and enviable political stability in the region.


That is why many foreigners are attracted to investing in Panama, and an interesting way to do it is by investing in real estate.


Panama as a real estate center


Thanks to its strategic geographic and commercial position, Panama has positioned itself as a very attractive destination for workers, foreigners, and investors, which connects the world through the famous Panama Canal.


In the case of real estate, and despite the pandemic, the economy has shown that the Panamanian real estate market is experiencing a boom, as it has captured the attention of international buyers.


And it is that the value that Panama has as a real estate center is very interesting, especially because it offers unique benefits for foreigners, among which we can highlight:

  • Access to the Permanent Residence Program for Economic Reasons for Qualified Investors. Thanks to Executive Decree No. 722 of October 15, 2020, Panama offers foreigners who wish to invest in this permanent residence program in real estate. The only requirement is that foreign investors must invest in real estate for a minimum of $300,000 during the first 24 months of the decree's validity. After this time, the amount increases to $500,000.
  • Panama has an excellent market for the sale and rental of real estate. In addition to the current Panamanian economy, the country also has a strong tourism industry and a stable movement in the export and import of products. These are attractive factors for hundreds of foreigners who enter Panama with the intention of investing, and that logically are directly reflected in the real estate movement.
  • Retirement Incentives. Panama offers a retirement incentive for foreigners, which includes things like importing duty-free household items and many discounts on hotels, restaurants, movies, and other professional services.
  • Wide range of real estate companies. In Panama, there are many real estate companies dedicated to advising foreign investors to help them optimize their investment by choosing the right property. Also, language is no longer an obstacle, as most real estate companies are used to English-speaking investors.
  • Banks facilitate foreign investment. Unlike other countries, Panamanian banking policies offer mortgage loans for a balance greater than the cost of the property; and with really low-interest rates that are backed by a magnificent selection of banking entities that also offer a maximum term of 30 years with 80% Loan-to-Value financing for foreigners willing to invest.
  • Investing in Panama is a safe bet. And perhaps one of the most compelling reasons to invest in real estate in Panama has to do with the fact that buying a property in Panama is very safe. This security is reinforced by the large number of laws that exist and that have been established specifically to protect the investments of foreigners, not to mention that private property in Panama is protected by the Constitution of the Republic of Panama.


How do I invest in real estate in Panama as a foreigner?

The first thing you should know is the legal requirements to invest in real estate in Panama; which are very similar to those of a Panamanian. The process to acquire a property involves:

  • Identify a property you like and negotiate the price and terms of sale with the seller (or real estate agent in Panama).
  • You must have the support of a qualified attorney in Panama to handle the due diligence and title search of the property, by contacting your Panamanian attorney with the seller (or the Real Estate Agent) to obtain the copy of the title ownership of the property, as well as documents and studies (if available).
  • Sign a Reservation Agreement to guarantee the choice of property.
  • Along with the Promise to Purchase Agreement, a 10% down payment must be paid to the Seller. In the case of being a new project, it can reach up to 30%.
  • Submit the Promise to Pay approximately 30 days after signing the Promise to Purchase Agreement.
  • The seller will need to present the documents of the real property taxes, Condominium Association tax, and transfer of water and property tax.
  • The buyer's attorney will prepare and sign the purchase contract.
  • Register the title in the Public Registry, which may involve a cost from $500.00 to $2,500.00 depending on the cost of the property.
  • Finally, the previous title of the property is sealed in the Public Registry and takes about 10 business days to be delivered.


What if I want bank financing as a foreigner?

In the case of foreign investors, the vast majority of banks usually finance 70% of the cost of housing or the value of the property for 25 years and at an approximate annual rate of 6.5%.

The documents that banks usually request are:

  • Passport copy.
  • DNI or identity card from your country of origin.
  • Credit history report from your country of origin.
  • Verification of assets: savings accounts, current accounts, investment funds, time deposits, property registration, account statements, etc.
  • If you have bank accounts in your country of origin, submit updated account statements.
  • Two letters of bank references addressed to the entity.
  • Utility bills from your current residence.

Undoubtedly, investing in real estate in Panama is a safe bet, especially since it stands out as the fourth country in Latin America with the highest rating according to the World Bank's ranking of ease of doing business and first in Central America.

Knowing all this, what are you waiting for to invest in Panama? Contact us and we will help you with the legal procedures to invest in Panama.

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