Panama Fast Facts
History: Explored and settled by the Spanish in the 16th century, Panama broke with Spain in 1821 and joined a union of Colombia, Ecuador, and Venezuelaânamed the Republic of Gran Colombia. When the latter dissolved in 1830, Panama remained part of Colombia. With U.S. backing, Panama seceded from Colombia in 1903 and promptly signed a treaty with the U.S. allowing for the construction of a canal and U.S. sovereignty over a strip of land on either side of the structure (the Panama Canal Zone).
The Panama Canal was built by the U.S. Army Corps of Engineers between 1904 and 1914. In 1977, an agreement was signed for the complete transfer of the Canal from the U.S. to Panama by the end of the century. Certain portions of the Zone and increasing responsibility over the Canal were turned over in the subsequent decades. With U.S. help, dictator Manuel Noriega was deposed in 1989. The entire Panama Canal, the area supporting the Canal, and remaining U.S. military bases were transferred to Panama by the end of 1999.
In October 2006, Panamanians approved an ambitious plan to expand the Canal. The project, which began in 2007 and could double the Canalâs capacity, is expected to be completed in 2014-15.
Location: Central America, bordering both the Caribbean Sea and the North Pacific Ocean, between Colombia and Costa Rica.
Area: 30,193 square miles (78,200 square kilometers)
Population: 3,360,474 (July 2009, est.)
Capital: Panama City
Geography: Panama is located on the narrowest and lowest part of the Isthmus of Panama that links North America and South America. Panamaâs two coastlines are referred to as the Caribbean (or Atlantic) and Pacific, rather than the north and south coasts.
To the east is Colombia and to the west Costa Rica. Because of the location and contour of the country, directions expressed in terms of the compass are often surprising. For example, a transit of the Panama Canal from the Pacific to the Caribbean involves travel not to the east but to the northwest, and in Panama City the sunrise is to the east over the Pacific.
The Caribbean coastline is marked by several good natural harbors. However, Cristóbal, at the Caribbean terminus of the canal, had the only important port facilities in the late 1980s. The numerous islands of the Archipiélago de Bocas del Toro, near the Costa Rican border, provide an extensive natural roadstead and shield the banana port of Almirante. The over 350 San Blas Islands, near Colombia, are strung out for more than 160 kilometers (100 miles) along the sheltered Caribbean coastline.
The major port on the Pacific coastline is Balboa. The principal islands are those of the ArchipiĂ©lago de las Perlas in the middle of the Gulf of Panama, the penal colony on the Isla de Coiba in the Golfo de ChiriquĂ, and the decorative island of Taboga, a tourist attraction that can be seen from Panama City. In all, there are some 1,000 islands off the Pacific coast.
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Climate: Panama has a tropical climate. Temperatures are uniformly highâas is the relative humidityâand there is little seasonal variation. Diurnal ranges are low; on a typical dry-season day in the capital city, the early morning minimum may be 75° F and the afternoon maximum 84° F. The temperature seldom exceeds 90° F for more than a short time. Temperatures on the Pacific side of the isthmus are somewhat lower than on the Caribbean, and breezes tend to rise after dusk in most parts of the country. Temperatures are markedly cooler in the higher parts of the mountain ranges, and frosts occur in the Cordillera de Talamanca in western Panama.
Climatic regions are determined less on the basis of temperature than on rainfall, which varies regionally from less than 4-10 feet per year. Almost all of the rain falls during the rainy season, which is usually from April to December, but varies in length from seven to nine months. In general, rainfall is much heavier on the Caribbean than on the Pacific side of the continental divide. The annual average in Panama City is little more than half of that in ColĂłn. Although rainy-season thunderstorms are common, the country is outside the hurricane belt.
Government: Constitutional democracy.
Head of State & Government: President Ricardo Martinelli since July 1, 2009.
Language: Spanish (official), English 14%; Many Panamanians are bilingual.
Religion: Roman Catholic 85%; Protestant 15%
Time Zone: GMT-5 (same time as Washington, DC during Standard Time).
Electricity: 120 volts AC, 60Hz. Plugs are the flat two-pin American type.
Currency and exchange: PanamĂĄ adopted the U.S. dollar as its currency in 1904, and has not printed any paper currency since. Dollars are referred to interchangeably as dĂłlares or balboas. Panama does mint its own coinage: 1, 5, 10, 25 and 50 centavo pieces, which are the same shape and size asâand are used alongsideâU.S. coins.
Police: If you are robbed or otherwise become the victim of a crime, you should report it immediately to the local police station, particularly if you will later be making an insurance claim. If treated respectfully, Panamanian police are generally honest and helpful. In PanamĂĄ City the tourist police (policia de turismo) are better prepared to deal with foreign travelers and more likely to speak English â they wear white armbands and are often mounted on bicycles.
Emergency numbers: Police 104; Fire 103; Tourist Police 226 7000 ext. 280 or 269 8011
Tipping: 10 to 15 per cent is customary in hotels (where it is not added automatically) and restaurants. Taxi drivers do not expect tips, and rates should be arranged before the trip.
Smoking: There are non-smoking rooms in hotels, and non-smoking areas in restaurants.
Pets: Have your veterinarian prepare a standard International Health Certificate preferably no more than 10 days before travel to Panama which means you may have to use an express delivery service to complete the following…The certificate needs to indicate the pet’s name, breed, ownerâs name and current country of residency. It should state that the pet is healthy and free of parasites. It must contain a list of inoculations including type, manufacturer and batch number.
Panama Health Care
Panama offers high quality medical care and modern hospitals in the metropolitan areas. For example, the Johns Hopkins-affiliated Punta Pacifica Hospital is the most technologically advanced medical center in Latin America.
In the city of David, in the ChiriquĂ Province in the western region of Panama, there are two medical centers with modern facilities, and growing towns like Boquete, Chiriqui and Coronado, and Province of Panama have new medical centers scheduled to open in the next year. Many Panamanian doctors are U.S.-trained, and the standards at the top city hospitals compare very favorably with those in the U.S., Canada, and Europe.
Private health insurance is available and much less expensive than insurance in the U.S. (because doctorâs fees and hospital visits are much cheaper). Two more reasons why health insurance here is so affordable: 1) malpractice insurance is very low because the laws do not allow for frivolous lawsuits; and 2) the average income is around $300 a month, and many Panamanians, particularly those employed in informal sectors, pay for health care out-of-pocket (salaried employees have access to a wide network of social security hospitals).
Prices for prescription drugs are low as well, because manufacturers price them for the market. Plus, some drugs that require a prescription elsewhere are available over the counter in Panama.
Communications
Telephone system: Domestic and international facilities are well developed. Considering the Panama Canal, and its significance to the international business community, it is no wonder that the phone system, as well as the public telephones themselves, is easy to use and readily available. The Panamanian phone system ranks high compared with many of its neighborsâ. Both coin- and card-operated telephones exist throughout Panama for public use. Coin-operated telephones accept 5, 10 and 25 centavos coins.
International country code: +507
For directory assistance: Dial 102
Cell phones users: 3.805 million (2008)
Internet users: 934,500 (2008)
Internet country code: .pa
Internet/e-mail: Internet cafes are very common and inexpensive, normally less than $1 per hour. Some restaurants and coffee shops are now providing wireless hot spots.
Press: CrĂtica Libre, La Estrella de PanamĂĄ, El Matutino, El PanamĂĄ AmĂ©rica, La Prensa, La RepĂșblica, El Siglo and El Universal (all in Spanish) are the largest daily newspapers.
Mail: Mail to North America takes up to one week. Airmail to Western Europe takes five to 10 days. Main post offices have Poste Restante and EMS (Express Mail Services) facilities. Post office hours: Mon-Fri 8:00 a.m. – 4:00 p.m., Sat 8:00 a.m. – 1:00 p.m.
The Economy
Panamaâs dollarized economy rests primarily on a well-developed services sector that accounts for 80% of GDP. Services include operating the Panama Canal, banking, the Colon Free Zone, insurance, container ports, flagship registry, and tourism. Economic growth will be bolstered by the Panama Canal expansion project that began in 2007 and is scheduled to be completed by 2014 at a cost of $5.3 billionâabout 25% of current GDP. The expansion project will more than double the Canalâs capacity, enabling it to accommodate ships that are now too large to transverse the transoceanic crossway, and should help to reduce the high unemployment rate.
The United States and China are the top users of the Canal, and while a lower volume of cargo is expected to transit the Canal with the global economic slowdown, higher transit fees will result in a net increase in revenues.
Strong economic performance has not translated into broadly shared prosperity as Panama has the second worst income distribution in Latin America. About 30% of the population lives in poverty, however, during Torrijoâs term poverty was reduced from 40% to 30% and unemployment dropped from 12% to 6%.
In 2009, the world recession reduced the amount of revenues Panama earned through global shipping that transits the Canal. Not a CAFTA signatory, Panama in December 2006 independently negotiated a free trade agreement with the US, which, when implemented, will help promote the country’s economic growth.
Labor force: 1.423 million.
Labor force by occupation: agriculture: 15%, industry: 18%, services: 67%. (2006 est.)
Exports: $11.41 billion (2009 est.)
Export commodities: Bananas, shrimp, sugar, coffee, clothing.
Imports: $15.18 billion. Note: includes the Colon Free Zone (2009 est.)
Import commodities: Capital goods, foodstuffs, consumer goods, chemicals.
The Panama Canal: The Panama Canal project began in 1904. It was completed in 1914 and used 61 million pounds of dynamite, a âgreater amount of explosive energy than had been expended in all the nationsâ wars,â according to historian David McCullough in his book, The Path Between the Seas. This nine-mile waterway is one of the man-made wonders of the world, and the primary reason for the strategic importance of Panama in world trade.
In October 2006, the people of Panama approved the Panama Canal expansion mega-project via referendum. The immense undertaking is easily the nationâs biggest project since the canal was completed in 1914. The $5 billion modernizationâalready underwayâis adding a third lane and set of locks to the canal. The project will open the waterway to a host of new vessels that have been dubbed âPost-Panamaxâ size because they are too large to fit through the current canal system. The inauguration of the project took place on Monday, September 3, 2007 and is set for completion by 2014 (the 100th anniversary of the original Panama Canalâs completion).
The Colon Free Zone: For those who have ever considered starting up an export business, Panama has what may be the best place to operate fromâthe Colon Free Zone. In this special zone, you can reap tax and financial benefits that are unrivalled anywhere else on the planet. Plus, you can gain easy, cost-effective access to a market of more than 500 million consumers in Latin America and the Caribbean.
The Colon Free Zone, located in the City of Colon, near the Atlantic entrance to the Panama Canal, is the second-largest duty-free zone in the worldâsecond only to Hong Kong.
Since its inception in 1948, it has grown from a mere 120 acres to over 1,000 acres, is home to more than 1,600 companies from across the globe, and employs over 14,000 people. In the past five years, the zone has averaged annual sales of $12 billion.
A Tax Haven
If you are thinking of taking your money offshore, then Panama offers some incredible offshore advantages. Panama is ideally suited for the offshore investor who wants to enjoy the increasingly rare privilege of strong, legally guaranteed financial privacy and no taxesâcorporate or personal.
According to Canadaâs Fraser Institute, Panama is near the top of the list of the worldâs freest economies. Panama has adopted more than 40 laws protecting foreignersâ financial and investment rights, including the Investments Stability Law (Law No. 54), which guarantees foreign and local investors equal rights.
Visa Requirements
Tourist visa: If you are from the U.S. or Canada you may enter Panama by purchasing a $5 tourist card from your airline or at Panamaâs Tocumen International Airport. Citizens of countries with visa waiver programs may continue to enter Panama as tourists free of charge. Tourists may stay for up to 90 days and, in general, extensions are not available unless you can prove you need more time because you are changing your status from that of touristâŠfor example, if you entered Panama as a tourist and then decided to apply for residency.
Person of Means visa: This visa is designed for those who wish to live in Panama and not seek employment, but live off their own means or private investments. To qualify, among other things, you must invest $300,000 in one of three ways: by buying property here; by placing $300,000 in a fixed-term deposit; or by applying with a âmixed useâ split between a property purchase and fixed-term deposit, provided the total investment adds up to at least $300,000.
The worldâs best pensionado program:
The most popular option for people relocating to Panama is the Pensionerâs or Pensionado Residency Permit. It has always drawn expats to Panama because, in addition to allowing you to stay in Panama indefinitely, it also entitles pensioners to discounts including:
· 30% off local transportation
· 25% off airline tickets
· 30% to 50% off hotel stays
· 20% off medical consultations
· 15% off hospital bills (when insurance is not applied)
· an exemption every two years from duties for the local purchase of a car
· and much moreâŠ
To qualify you must draw a minimum pension of $750 and invest at least $100,000 in property in Panama or you must have a pension of at least $1,000 per month (no real estate requirement).
Buying Real Estate
Anyone can own property in Panama. Because foreigners have the same property rights as Panamanians, capitalizing on the opportunities here is easy.
Purchasing procedure
Step 1: Confirm the title. Prospective buyers should always confirm title first. Once you have found the property for you, ask the owner for two documentsâthe public deed containing the title (Escritura) and the Ownership and Encumbrances Certificate (Certificado de Registro PĂșblico) from the Public Registry. If these documents are not available, ask the seller for a property (finca) number. With this information, your lawyer will be able to search for the title at the Public Registry.
Step 2: Enter into a Promise to Buy-Sell Agreement. Once you have verified title, the next step is to sign a Promise to Buy-Sell Agreement. This usually entails giving the seller a down payment (often 10% of the agreed-upon purchase price) and setting a date for the transfer of title. Normally there is a penalty if either party backs out.
Step 3: Transfer the title. Once the Promise to Buy-Sell Agreement is completed, your lawyer will draft the final purchase and sale contract. All parties will then need to go to a notary public to sign the deed.
Step 4: Transfer the funds. The safest way to pay the balance of the purchase price is through an irrevocable letter of payment from a local bank in Panama. Your lawyer should be able to assist you in obtaining this document in which the bank irrevocably promises the seller to pay the balance of the sale price upon the transfer of the title to the buyer.
Step 5: Record your purchase at the public registry. Finally, your lawyer or real estate agent can help you record your purchase at the public registry (the sale isnât final until you do this.) This process normally takes a few weeks, but it can be done in about 10 days by having your attorney file the documents directly at the main office of the public registry in Panama City.
Buying restrictions:
Panamanian law allows for both nationals and foreigners to purchase titled property in Panama. However, the law does prevent foreign persons or Panama corporations with foreign ownership from purchasing islands or property located less than 6.2 miles from the borders. This does not apply to beach property but to physical borders with Costa Rica and Colombia. On January 7, 2006, the government of Panama modified Article 121 of the Fiscal Code, and eliminated the phrase which forbade foreign ownership of island territory. Want to buy an island? Go ahead…itâs your right.
Where to buy in Panama
Panama City:
If youâre looking for inexpensive cosmopolitan livingâbut with the conveniences youâd expect in New York, Chicago, Miami, or any other major First-World cityâyou need to take a serious look at Panama City.
Panama City boasts a skyline of skyscrapers…modern office buildings and hotels of shining glass and steel with world-class views of the Bay of Panama. The city is a major international commerce and banking hub, home of more than 80 of the worldâs largest banks and other giant multi-national corporations such as Federal Express, DHL, and Price Costco. Thereâs a reason itâs called the âhub of the Americas,â and you can thank the Panama Canal for that. For more than 100 years, itâs been the conduit between east and west, north and south. The influence of many different nationalities is vast. Walk the streets of Panama City and you will hear dozens of different languagesâŠincluding English.
You can dine in five-star restaurants. Attend plays, symphonies, and the ballet and shop at the many unique boutiques. And in Panama City, you can enjoy these First-World luxuries at about half the price youâd pay in any U.S. city.
You donât have to be in Panama City long to see that it wasnât built overnight. The city is an enticing blend of colonial and modern architecture. A place where old meets new, and where it is an everyday experience to see a Kuna Indian dressed in a traditional colorful, beaded costume walking side by side with a businessman (or woman) carrying a briefcase and conducting business via their cell phone.
Property samples in Panama City
- A 775-square-foot apartment in the Hato Pintado sector of Pueblo Nuevo is on offer. It has three bedrooms and two bathrooms, and is on the second floor of a high-rise (the building has one elevator). The apartment is just two years old, so it has another 18 years on its 20-year property tax exemption. Price: $61,000.
- In an upper-class area, right in the financial district, is a spacious one-bedroom apartment. Itâs nearly 950 square feet and comes with one parking space and central air conditioning. The buildingâs social area has a pool and a party room. Price: $95,000.
The Azuero Peninsula:
From the colonial square of Las Tablas to the tawny shores of Pedasi, la Peninsula de Azuero is a land that lifts the soul and touches the heart. Its sons and daughters are beautiful and proud, and its beaches are flat, wide expanses rimmed by the waters of the vast blue Pacific.
Located on the Pacific Coast of Panama, the Azuero Peninsula juts out into the Pacific Ocean. About a five-hour drive from Panama City, it is often compared to the Guanacaste region in the north west of Costa Rica, due to its flat land and very lush open areas. Azuero consists of the provinces of Los Santos and Herrera, plus the southern tip of Veraguasâthe only province in Panama that boasts both Caribbean and Pacific coasts. Several national parks are located here, and this highly arid coastal region has its own unique wildlife and boasts archeological sites dating back centuries.
The Azuero Peninsula is one of the latest parts of Panama to be âdiscovered.â A small roster of celebrities, including Hollywood movie stars and Americaâs rich and famous, are buying large tracts of land as nature preserves, investments, and for exclusive getaways. Although this peninsula is often described as being âoff the beaten trackâ by travel guides, Panamanians think differently. The region is frequently referred to as the heartland of Panama and the cradle of the nationâs folkloric traditions.
Old country lifestyle in the Azueran countryside is largely unchanged since the turn of the century. Visitors enjoy the way life slows down as if one were traveling back in time.
Property samples in the Azuero Peninsula:
- In Las Tablas, a typical Panamanian-style home is available. The house features three bedrooms and two bathrooms. Price: $30,000.
- A flat lot with 200 feet of ocean front, near the Pedasi main road. Access to the quarter-acre lot is through rough terrain. Price: $57,000.
- A three-bedroom, two-bathroom home in Chitre is on offer. The home is about 1,400 square feet and sits on a lot of over 5,000 square feet. Price: $91,000.