The past decade has brought significant changes to Canada's economic landscape. As advisors to wealth managers and high net worth investors, we're increasingly asked about international alternatives by clients seeking to preserve and grow their wealth while maintaining their desired quality of life. This memo examines Panama as one such alternative.
The Canadian Context
It's worth starting with why we're having this discussion. Canada's economic indicators have shown concerning trends:
Productivity growth has been declining since 2002
Per-person income has stagnated since 2016, now sitting 35% below US peers
Business investment per worker has fallen 20% since 2014
Major urban real estate markets remain among the world's most expensive relative to income
Vancouver remains one of the world's least affordable housing markets, with the average home price requiring over 14 times the median household income. A typical Vancouver family would need to save for over 30 years to afford a down payment on an average home. Toronto is not far behind.
These statistics represent real challenges to the Canadian economy – whether you own Canadian real estate or not, the truth is that by taking some value off the table will allow for large changes in lifestyle in other countries. When combined with high tax rates and increasingly complex regulatory requirements, they help explain why many of our most successful clients are exploring their options.
Why Panama Merits Consideration
We have spent considerable time analyzing various jurisdictions, and Panama stands out for several reasons that go beyond the usual offshore financial center attributes. Its strategic location, stable banking system, and dollar-based economy provide a foundation of stability. But what's particularly interesting is how it's evolved from a pure tax haven into a legitimate lifestyle destination.
InterNations' 2024 global expatriate survey ranked Panama #1 among 53 countries across various quality-of-life metrics. While such rankings should always be viewed critically, the 82% satisfaction rate among current residents is noteworthy. What's more telling is the diversity of the satisfied expatriate population - from active professionals to retirees, suggesting the jurisdiction's broad appeal isn't limited to tax benefits.
For other reports of jurisdictions Canadians can consider, click this link: www.greyriverinsights.com/canada
The Financial Case
The financial advantages are straightforward but worth examining:
A territorial tax system that doesn't tax foreign-source income
No capital gains tax on overseas investments
A stable banking system with strong ties to North America
Real estate values that remain reasonable by international standards
However, the real value proposition extends beyond tax efficiency. The combination of modern infrastructure, high-quality healthcare, and lower living expenses creates meaningful lifestyle arbitrage opportunities.
Client Experiences: A Reality Check
Through our network, we've observed three distinct groups finding success in Panama:
Remote professionals and business owners who maintain their income sources while optimizing their tax situation and quality of life
Families attracted by international schools, safety, and outdoor lifestyle - though the adjustment period tends to be longer and requires more planning
Retirees who appreciate the healthcare system (and low cost for those who need full-time assistance), climate, and cost advantages - particularly those who've grown tired of Canadian winters
Each group faces different challenges, but a common thread emerges: those who succeed approach Panama as a carefully considered option rather than a quick fix.
The Residency Process
The Friendly Nations Visa program provides a straightforward path to residency. The process typically converts from temporary to permanent status after two years, with minimal physical presence requirements. While a real estate purchase of US$200,000 is required in some cases, recent changes have made this optional in many cases. Contact the Grey River team to discuss your specific situation and se
Understanding Panama
Having worked with numerous clients who have moved to Panama over the past several years, we've observed its evolution from a strategic canal zone to a modern hub that retains its distinctive character. With a population of roughly 4.3 million, Panama City's skyline reflects its role as Central America's financial center, while the countryside preserves a slower pace of life that many expatriates find appealing.
Panama City’s skyline is impressive.
The country's economy, built around the Canal, banking, and services, has created an interesting dynamic. Unlike many of its neighbors, Panama uses the US dollar, eliminating currency risk while providing financial stability that attracts international business. The Canal continues to generate significant revenue ($3.3 billion in 2023), but it's the broader services sector – particularly banking, tourism, and increasingly technology – that drives modern Panama.
For those considering Panama, location is a crucial advantage. The main airport, Tocumen International, serves as Copa Airlines' hub with direct flights to major North American cities (Toronto: 6 hours, New York: 5 hours, Los Angeles: 7 hours, Miami: 3 hours). This connectivity extends throughout Latin America (Bogota: 1.5 hours, Mexico City: 4 hours, São Paulo: 7 hours, Buenos Aires: 7.5 hours), making Panama an effective base for both business and leisure travel.
The expatriate community has gravitated toward several distinct areas:
Panama City's upscale neighborhoods of Punta Pacifica and Costa del Este offer modern high-rises with ocean views ($300-500/sq ft). These areas feature international schools, high-end restaurants, and the amenities you'd expect in any global city.
The mountain town of Boquete, located in Panama's western region near the Costa Rican border, has attracted a substantial retiree community. Situated in volcanic mountains dotted with coffee farms, this highland retreat is accessible via a 1-hour flight from Panama City to David, followed by a 40-minute drive. With its eternal spring climate, Boquete offers both affordable land and housing options. Modern homes with mountain views typically range from $100-250/sq ft, while offering a more relaxed lifestyle centered around coffee culture, hiking, and golf. The area has become particularly popular with expat communities, drawn to its natural beauty, moderate climate, and lower cost of living compared to Panama City.
The Pacific beach areas, particularly Coronado and Buenaventura (2 hours West of Panama City), provide weekend homes for wealthy Panamanians and expatriates alike. Beachfront condos start around $300/sq ft, with luxury villas commanding premium prices.
What's particularly interesting is how different expatriate groups use these areas. Young professionals tend to cluster in Panama City, engaging in a lifestyle that combines work with regular escapes to the beach or mountains. Retirees often split time between Boquete's cool climate and beach areas, while families typically settle in Panama City's suburbs, drawn by international schools and community life.
Daily life here revolves around a mix of outdoor activities (golf is year-round, with green fees at quality courses ranging from $50-150), social gatherings (private club memberships run $10-30k initially plus monthly dues), and cultural events. The cost of household help ($500-800/month for full-time staff) makes entertaining and maintaining a larger home quite manageable.
Looking Ahead
Panama isn't for everyone, and it would be a mistake to present it as such. However, for certain clients, it represents a compelling option worth serious consideration. The combination of financial benefits, quality of life, and accessibility creates an interesting value proposition, particularly in the current Canadian context.
The key is approaching the decision methodically. We recommend:
A thorough analysis of current tax and wealth structure
Careful consideration of lifestyle requirements and preferences
An exploratory visit to understand the reality versus the marketing
Professional guidance on implementation if proceeding
Grey River can provide wealth managers and their HNW clients with the legal, financial, and tax advice required to successfully move jurisdictions, including to Panama.
Final Thoughts
What makes Panama interesting isn't just its individual attributes, but how they combine to create a viable alternative for wealth preservation and lifestyle enhancement. While no jurisdiction is perfect, Panama's evolution from a pure tax haven to a legitimate living destination merits attention from those seeking international options.
The decision to relocate, even partially, is significant. It requires careful consideration of financial, practical, and personal factors. However, for those who fit the profile and approach it thoughtfully, Panama can be a valuable addition to their international planning toolkit.
This memo reflects Grey River's current observations and analysis, with input from Panama Legal Business, a leading Panama law firm specialized in immigration, investment and private wealth services in Panama. Specific situations require individual evaluation with appropriate professional advisors.
About Panama Legal Business, Inc.
Panama Legal Business ("PanLeb") is a leading Panama law firm specializing in legal services for high net worth investors and corporates. Their expertise spans immigration, investment, and corporate matters. Through their prime services division, PanLeb delivers comprehensive private wealth solutions including trusts, foundations, corporate structuring, and residency services.
Want to get in touch with PanLeb? Contact them at primeservices@panleb.com
About Grey River, LLC
Grey River is a leading global advisory firm with nearly a decade of experience serving the complex financial needs of wealth managers with who serve high net worth clients' complex financial needs in Canada, the United Kingdom and the United States. Leveraging a decade of experience and an extensive network of specialists, we provide bespoke advice on global residency options, tax optimization strategies, business and investment guidance, and estate planning insights. Our offerings empower wealth managers to deliver holistic, best-in-class solutions tailored to the most discerning clientele, helping them navigate the intricacies of global finance with exceptional results and peace of mind.
Want to get in touch with Grey River? E-mail us at info@grey-river.com
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