Current State: Strengthening and Future of the real estate sector in Panama

Panama has always been an attraction for investment in the eyes of the world, a modern city, with large tourist projects and a series of benefits for both foreigners and local residents, there being reason enough to prevail in its market.

Our great economy has made that in recent years the real estate sector has positioned itself as a stable and safe investment, despite the pandemic by COVID-19, which originated a significant impact on this sector caused by the economic situation, uncertainty, and social distancing. Before many other blows that the region has faced, but we are one of the few countries that after such situations have positioned ourselves as the country with the lowest inflation in Latin America with 1.7% in October 2022, according to the article “The countries with the lowest and highest inflation in Latin America in 2022 (and what is expected for 2023)” published in BBC News Mundo by Cecilia Barria, on December 26, 2022.

Currently, the real estate sector is facing a time of transformation, as more and more companies choose to close their physical offices and work remotely, this has given way to “Digital Nomads” who have represented an important role in the sector, since they are a significant source of income in our economy, given that this type of workers have a higher consumption than a regular tourist and for longer periods of time. Due to this, many foreign investors are looking for a second home, with Panama being one of the main countries to establish themselves, adding to the number of people who immigrate from their countries of origin, creating a strong demand for rental properties.

The pandemic has blazed a trail in our way of living, working, and consuming goods, generating that preferences when searching for real estate have taken a turn. The preference when acquiring real estate is usually centrally located homes with various amenities, including coworking areas, beach properties or country houses, however, large business owners seeking to maintain physical offices explore the possibility of a reduction in space by carrying many developers to modify the sales style and ways of building.

Because of these factors, in addition to the warmth of its people, its natural resources and the greatness of its cities, we have become a highly attractive destination for foreigners, making the real estate industry one of the largest sources of investment.

Now, is it safe for a foreigner to buy property in Panama? What benefits are obtained and what are the requirements?

With complete certainty we can indicate that the political, economic and legal security that the Republic of Panama has provides protection for foreign investments and always generates a good opportunity, without failing to mention the benefits that the country grants such as “the Permit to Residency as an Investor” which was created under Executive Decree No. 722 of October 15, 2020, which aims to grant permanent residence in Panama to those people who acquire a property for a certain amount, which brings as benefit the granting of permanent residence in Panama for a period of no more than 30 days.

Among the most important requirements that we can mention are: (i) Prove that the funds come from a foreign source of income; (ii). The investment must be maintained in the country for a minimum of 5 years, this will be verified by each competent authority.

After obtaining permanent residence, you have the obligation to visit Panama within 2 years, since, if you do not do so, you will lose your residence and must begin a process to request the reactivation of your Permanent Residence and you must justify the reason why you did not do your visit to the country during that period.

The future of the real estate sector in Panama is in a recovery process, looking prosperous unlike other countries in Latin America.

If you would like to contact our Real Estate department, please email us at quijano@quijano.com