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Foreign investors generally find Panama to be a favorable destination for buying property due to its relatively flexible and welcoming regulations, coupled with various incentives. Here are some of the notable regulations and steps associated with purchasing property in Panama as a foreign investor:

Property Ownership Regulations:

  1. Equal Rights: Foreigners enjoy the same rights as Panamanian citizens in terms of property ownership, with the exception of owning property within 10 kilometers of the country’s borders.
  2. Title Deed: It is crucial to verify that the property has a clear title deed. Title insurance is also available and recommended.
  3. Land Types: Land can be Right of Possession (ROP) or Titled. Titled land has a higher degree of security, while ROP land has some risks and complications.

Investment Incentives:

  1. Tax Incentives: Panama offers various tax incentives, including tax exemptions on the importation of materials and equipment.
  2. Friendly Nations Visa: Citizens of select countries may apply for a Friendly Nations Visa, which can facilitate residency and work permits.

Property Buying Process:

  1. Legal Representation: Employ a reputable attorney to navigate through legal processes, conduct due diligence, and draft contracts.
  2. Purchase Agreement: Once a property is selected, a Promise to Purchase Agreement is drafted, outlining the terms, conditions, and price agreed upon.
  3. Deposit: Typically, a deposit of 10% of the purchase price is made.
  4. Due Diligence: The buyer’s attorney conducts due diligence to ensure the property is free from liens, encumbrances, and has a clear title.
  5. Final Sale Deed: Upon successful due diligence, the Final Sale Deed (Escritura de Compraventa) is signed before a Public Notary.
  6. Registration: The property must be registered with the Public Registry after the sale.

Fees and Taxes:

  1. Transfer Tax: The buyer is typically responsible for the payment of the transfer tax, which is around 2% of the updated registered value of the property.
  2. Notary Fees: Notary fees are usually 1-2% of the purchase price.
  3. Legal Fees: Legal fees can range between 1-3% of the purchase price.

Financial Considerations:

  1. Financing: Obtaining financing can be challenging for non-residents. Many choose to finance the purchase from their home country.
  2. Property Taxes: Some properties can be exempt from property taxes for up to 20 years, depending on the value and area.
  3. Insurance: It is advisable to get property insurance due to Panama’s susceptibility to natural disasters like floods and landslides.

Additional Considerations:

  • Real Estate Agent: While not a legal requirement, hiring a real estate agent familiar with local markets can be beneficial.
  • Spanish Language Contracts: Legal contracts are in Spanish. It is crucial to have a reliable translation to avoid misunderstandings.
  • Visa Options: Property ownership can support applications for various visa options, including the Pensionado (Retiree) Visa, which offers several benefits and discounts.


Panama offers a conducive environment for foreign investors looking to buy property, with favorable laws, tax incentives, and potential for high returns on investment. However, meticulous due diligence, legal representation, and an understanding of local laws and processes are critical to navigate potential risks and ensure a smooth property acquisition process.