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Requirements to Obtain Retiree Status
o Power of attorney
o Good health medical certificate, HIV Test
o Good standing report from police or municipal authorities
o Complete copy of passport
o Letter certifying applicant condition as a retiree and amount earned per month. If it is a private entity, proof of its existence must be supplied.
o Photographs, carnet size
o Marriage certificate
Note: Except for the retiree certification, the same documents must be supplied by the spouse. All documents must be apostil led or certified before a Panama consulate at the place of issuance.
Panamanian law also grants retirees a very good tax exemption package including:
o Tax exemption to import a car every 2 years
o Import tax exemption for households up to US$10,000
o Multiple tax exemptions and discounts on services in Panama
The Panama Pensionado Visa Program, as it is called, offers retirees excellent tax holidays and dozens of money-saving discounts, such as:
o Tax exemption to import a car every 2 years
o Import tax exemption for furniture, appliances and fixtures up to US$10,000
o 50% discount in movie theaters, and cultural and sporting events
o 30% discount on train, bus, and boat transportation
o 15% discount on loans made in your name
o 1% reduction on home mortgages for personal use
o 25% reduction on your water, telephone, and electricity bills
o 20% discount on doctor visits...and much, much, more.
Plus, in Panama, there is little red tape involved in taking up residence, buying real estate, or starting a business. And the U.S. dollar has been Panama's official paper currency since 1904
12th Annual Global Retirement Index
--Laura Sheridan
Where the Numbers Come From
Real estate. Countries where real estate prices are low and the purchase of real estate is relatively easy receive the highest scores. We use reports from our contributing editors and real estate contacts around the world to rate each country. Weight: 15%
Special benefits. This category considers government provisions that make moving to and living in each country easier and more affordable for foreigners. Taken into account are property rights for foreign residents, property tax rates, duty-free imports on personal belongings, currency controls, employment restrictions, voting rights, and transportation discounts for seniors. Weight: 20%
Cost of living. This score is based on statistics from the Indexes of Living Costs Abroad, Quarter Allowances, and Hardship Differentials, published by the United States Department of State, and on data published by Business International. We also use our firsthand experiences living and traveling in these countries. The lower the score, the higher the cost of living. Weight: 20%
Culture. This category considers the number of newspapers per 1,000 citizens, the number of museums and cinemas per capita, the number of university students, the literacy rate, and the variety of cultural and recreational offerings. Weight: 10%
Health. Considered in this category are the cost of a typical visit to a general practitioner and the cost and coverage particulars of health insurance. Weight: 20%
Infrastructure. This section considers the number of automobiles and telephones per 1,000 residents, the length of railroad track in usable condition, the number of airports, the quality of the country's road and highway network, and the availability of telecommunications. Weight: 5%
Safety. This measure of unrest in each country is based primarily on Interpol data and State Department statistics. It also takes into account the civil liberties and political rights granted by each government. Our own experiences and reports from expatriates living in these countries also influence the safety scores. Weight: 5%
Climate. Countries with temperate weather throughout the year, moderate rainfall, and little risk of natural disaster come out on top in this category. We use data representing each country as a whole instead of favoring one region over another. Weight: 5%
Panama is the best place in the world to retire. For the third year running, this country has taken top honors in our Annual Global Retirement Index. If you re looking for a place outside U.S. borders to retire, Panama should be at the top of your list, as it is ours.
This country has a lot going for it. Here, you can enjoy spring-like weather year-round a low cost of living safety security peace of mind beautiful landscapes--mountainsides covered with flowers and planted with coffee cascading waterfalls not to mention the best pensionado program in the world.
In every category in this index, Panama scores well. It has a stable economy (the U.S. dollar is its currency), favorable offshore banking laws, good infrastructure, diverse geography, cheap real estate--and still it s a relatively undiscovered paradise. Panama City is our number-one choice the globe over if you re looking for inexpensive cosmopolitan living. You ll find world-class restaurants, five-star hotels, international banks, hundreds of multinational businesses, a Manhattan-type skyline, every imaginable luxury all at about half the price you d pay in Miami, or any other U.S. city for that matter.
And the energy here and the warmth of the people is overwhelming. Most people are surprised to learn that Panama City has just about everything that you ll find in all of the world s major cities
Panama City is really three cities in one: Old Panama, Colonial Panama, and Modern Panama. In Old Panama, you can explore the ruins of the old city, which was ransacked and destroyed by the pirate Henry Morgan in 1671. Colonial Panama, with its narrow streets and decorative balconies, is being rebuilt. The San Jose Church s Golden Altar, the Flat Arch, the National Theater, the cathedrals, and Las Bovedas promenade are all worth a visit.
Luxury downtown apartment for $60,000
Property, both for sale and for rental, is extremely affordable. Since the U.S. military and Panama Canal personnel pulled out (in 1999), thousands of houses and apartments have flooded the market. Abundant supply limited demand. Prices are cheap.
You can find a three-bedroom, luxury apartment downtown--with a deck, private parking, a pool the works, for about $80,000. Here s another bonus: Walk just about anywhere in Panama City, and you have an ocean view.
You can invest in a smaller apartment, away from the prime areas, for as little as $40,000. The real bargains will require renovation. But labor is cheap and plentiful. Workmanship is adequate to good. If you re interested in a renovation project here, it would be helpful to know a little about construction and to speak at least passable Spanish.
Prices for reconstructed apartments average around $100 per square foot.
Pacific coast properties
Beachfront also can be a tremendous bargain. At Gorgona, a Pacific coast resort area, for example, you can purchase beachfront apartments right now for as little as $60,000. At Lagomar you can buy a large house on the lakeshore with a swimming pool for around $150,000. At El Valle, a little town up in the hills about an hour and a half drive from Panama City, you might pay as little as $60,000.
Here is a sample of properties on offer along the Pacific coast right now:
Gorgona: 650-square-foot beachfront apartment with two bedrooms and two bathrooms, $65,000.
Gorgona: A new 1,100-square-foot beachfront apartment, $97,000.
El Valle: 1,500-square-foot house with three bedrooms and two bathrooms, plus a wonderful view, $60,000.
El Valle: four-bedroom, three-bathroom house, with terrace and gardens, $145,000.
Lagomar: large three-bedroom, two-bathroom house on 6.6 acres with a swimming pool and a gazebo on the lakeshore, $160,000.
Where the rich and famous vacation
Panama also hides some of the world s most appealing--and least discovered--island property. Though foreigners typically cannot purchase on an island there is an important exception: the island of Contadora.
As long-time readers of International Living know, this is one of our favorite spots in this country (in fact, we have invested here ourselves). Turquoise waters, 13 white-sand beaches, secluded coves, bright red and yellow fishing boats, swaying palm and cashew trees, giant coral reefs, coconuts, mangoes, parrots, pelicans, sea turtles this is the place where Panama s rich and famous come to vacation.
From the latter half of the 16th century until the latter half of the 20th century, Contadora was sparsely inhabited. Then a Panamanian named Gabriel Lewis Galindo bought the island and established the basic infrastructure--water, electricity, an airstrip, a marina, and a property division.
Now habitable, the island attracted the attention of Panama s elite--because of its sheer natural beauty and, most importantly, because of the privacy it afforded. Even today, few in the world know that this little island, part of the Pearl Island archipelago in the Bay of Panama, just 15 minutes from Panama City, even exists.
This is changing in a dramatic way.
Survivor, America s popular reality TV show, with 20-million viewers per episode, has announced that its next series is to be filmed here. Production crews are already in place, and the teaser footage they re showing is giving America a glimpse of what these islands have to offer. When the series airs this fall, we predict a boom in real estate prices.
Remember what happened after Temptation Island aired its series filmed on Ambergris Cay, Belize? Real estate values rose 100% and more in six months. Real estate agents there couldn t field the inquiries.
The real estate market on Contadora is small and limited. Not a lot of inventory. The spike in values here could be even greater than it was on Ambergris in the wake of Temptation Island.
Consider this fair warning: It s not too late for you to get in.
A little more than a year ago, International Living purchased a group of Villas overlooking the island s best beach.
If you re interested, five of the Villas at Contadora, overlooking Galleon Beach, remain available for sale. And we haven t raised the prices. At least not yet. For more information, go to: http://www.internationalliving.com/contadora/
Is Panama safe?
To set the record straight, General Manuel Noriega and his kidnapping, corrupt government have been out of power for more than a decade now. Furthermore, despite what you may read in the mainstream press, Panama s economic performance is, almost every year, better than that of just about every other country in Latin America. In fact, over the past 40 years, the country s inflation has averaged less than 2% per year that s simply unheard of south of the United States.
It s a very affordable place to live (a full-time, live-in maid costs $150 a month first-run movies cost $3.75). It s the safest place in Central and South America (the Pinkerton Global Intelligence Agency recently gave Panama its highest rating for tourist safety). And it s the most developed place south of the United States (home to some of the top companies in the world, including 80 of the world s biggest banks, and other giants such as Federal Express, DHL, Price Costco, and BellSouth).
In short, Panama has its act together. Still, very few foreigners, particularly Americans, consider Panama as a travel destination and even fewer think of it as a place worth considering for retirement. Therein lies your opportunity.
For more information on living and retiring in Panama, contact Greg Geurin who runs our local office in this country, tel. (507)264-2204 or e-mail: Panama@Internationalliving.com.
The little (unknown) Mediterranean islands
Not interested in Central America? Think retirement to Europe might suit you better? The top choice on that side of the Pond, according to our 2003 Global Retirement Index, is Malta, which takes this year s runner-up spot, ranking as the world s second best retirement haven.
Although Malta receives full marks in but one category (Safety and Stability), it scores high marks across the board. The island of Malta and its sister island of Gozo aren t mainstream destinations for North Americans, but these little isles in the Mediterranean have a lot to offer--a tranquil way of life and virtually non-existent crime year-round sunshine the opportunity to benefit from a considerable reduction in your tax burden and a population that speaks English. Plus, resident retirees are entitled to certain benefits, including the tax-free importation of your personal goods.
Anyone can rent or buy a home on these islands with certain restrictions to foreigners:
* Unless in specially designated areas, foreign buyers can purchase only one home on the islands.
* The value of the property must amount to at least $71,500 for an apartment and $119,000 for a house (at current exchange rates). However, the minimum price can include restoration costs and furnishings.
* If renting, the annual rent must be at least $4,280.
Residency requirements
For most foreign nationals, North Americans included, a valid passport is sufficient for stays up to three months. Visas are not required. The Republic of Malta recognizes three levels of residency for non-Maltese nationals. Incidentally, unless you have been married to a Maltese national for five years, or are the child of Maltese parents, there is no provision to acquire Maltese citizenship, no matter how long you are a resident of the islands.
Foreigners can be classified as follows: non-resident, permanent resident, or temporary resident. For more information on the best option for you, contact the Embassy of Malta, 2017 Connecticut Ave. N.W., Washington, DC 20008; tel. (202)462-3611; fax (202)387-5470.
Outdoor living--at a price
Interested in a retirement haven that s even more remote?
Australia comes out in the top five for the second year running, despite the fact that foreign residency is not an easy thing to obtain. This country is trying to control the number of foreign retirees and residents within its borders.
To be granted a retirement residency visa (extended temporary residence), you must be 55 or older (your spouse may be younger than 55). Plus, you must have at least $360,000 in capital that, critically, you are willing to transfer to Australia or $110,000 in capital plus a pension or investments that would provide you with an income of at least $25,000 a year.
The capital that must be transferred to the country can be used for personal investment in Australia, including the purchase of property.
You must also meet certain health and character requirements, and take out comprehensive health insurance with an Australian insurer. With this visa, working is not permitted.
The retirement visa is a temporary visa issued for an initial period of four years. However, extensions are possible--the immigration department has introduced provisions to enable self-supporting retirees to convert to permanent residence after 10 years in Australia. When you achieve this, you are eligible for many special senior discounts. For example, as a resident of Western Australia and are 60 or over, you re entitled to everything from a 50% discount on recreational fishing license fees to free public transport on Sundays and public holidays.
A long way from home
Another drawback is the distance from the States--it s a 14-hour flight from L.A. to Sydney.
On the other hand, this country offers a relatively low cost of living, good weather, cheap real estate, and a great (outdoor) quality of life.
Part-time living
While we re in this part of the world, it s worth noting another appealing retirement option: New Zealand. If you ve seen The Lord of the Rings, you re familiar with this country s incredible landscapes. And if you like the great out-of-doors, you ll never be bored here. The cost of living is low, and real estate can be a bargain. But (there s always a but remember, this is all a question of priorities) it s extremely difficult to obtain residency. Your chances are improved if you re young and highly qualified in a field that the government has targeted for growth.
Or avoid the residency issue altogether by residing on this side of the world only part of the year (up to six months at a time).
Elsewhere in Europe
La belle France seems to have more than its fair share of good things--not least of which are food, wine, and haute couture. If you re looking to retire to Europe, France should also be on your list of possibilities (it takes fourth-place honors in our Index this year).
This country has all the ingredients we look for: a good climate unspoiled countryside top-notch culture excellent healthcare colorful traditions and history and, of course, the glitter and sophistication of Paris--arguably the world s most bewitching capital. It s not surprising France is the world s favorite destination, receiving in excess of 70 million overseas visitors each year.
If you re contemplating a new life in Europe, you ll find that few European countries can match what France has to offer especially when considering property prices--the choice of properties selling for less than $50,000 is incredible--and we re not just talking about ruins or renovation projects.
The downsides? Taxes are high, and the bureaucracy can be frustrating. Our woman in Paris speaks firsthand on how to navigate the red tape of life in France in her article this month.
Closer to home
Canada scores high marks across the board in our Index this year. Right now, US$1 buys you $1.40 Canadian (giving the country high scores for cost of living) and real estate is cheap even cheaper when you factor in the buying power of the Greenback.
Close to home for North Americans, Canada is not only an affordable, but also a convenient option--although some are put off by the high taxes and the long, cold winters.
If accessibility to the U.S. is a key factor for you, Mexico may be an even better choice. No cold winters South of the Border and no serious tax concerns either.
We re so taken with all that Mexico has to offer that we this year have opened our fourth local office in this country. Dan Prescher and Suzan Haskins took up full-time residence in lakeside Ajijic and hung out an International Living shingle last February.
Mexico--now closer than ever
Dan and Suzan spent three months touring this country from coast to coast before deciding on the best place to settle. They chose Ajijic (for details on why see The country on your doorstep) but continue to scout the country on your behalf to find the best up-and-coming property markets and retirement havens.
Dan and Suzan can t say enough good things about their new adopted homeland. Asked to comment on the advantages for this year s Index, Suzan cited the excellent healthcare, diverse geography and climates, cheap real estate, low cost of living, and the culture:
It s funny, but once you cross that US/Mexico border, you truly are in another world. (Nothing like crossing from the US into Canada, which is almost seamlessly Anglo.) The Mexicans are proud of their culture and traditions, and they celebrate them with gusto. Everything here is colorful and boisterous. You can always find a fiesta or celebration. Spanish is spoken, which adds to the cultural mystique, but Mexicans are patient with gringos who don t speak the language. Mexicans love to share their culture with foreigners, so retirees needn t worry about feeling like outsiders.
NAFTA is making it much easier to move here. NAFTA (North American Free Trade Agreement) increased US/Mexico trade from US$81.5 billion in 1993, the year before NAFTA took effect, to US$232.3 billion in 2002. Highways and communication systems have been upgraded, manufacturing and distribution facilities have been built. And for individuals, it is easier than ever to drive back and forth across the border with a car or truck full of stuff. In 2004, as NAFTA implementations proceed, you will be able to import a new car into Mexico duty-free.
This is not a litigious society. If someone slips and falls on your sidewalk or they burn themselves with the hot coffee you have served them, they won t...can t really...sue you. People here believe you are accountable for your own actions. One caveat to that--honor is a huge consideration here. You can sue someone for libeling or slandering you. That makes for a polite society.
And then there s the tequila. Need I say more? Dan and Suzan are happy to help any subscriber interested in learning more about Mexico. E-mail any query you may have to them at: Mexico@internationalliving.com.
Get in before it's too late
Our other favorite Spanish-speaking retirement haven is Nicaragua.
In recent years, U.S. News and World Report cited Nicaragua as an affordable retirement destination, and The New York Times wrote that this is the place people are heading, tired of Costa Rica s high prices. We (and many dozens of readers we ve spoken with) heartily concur. Indeed, we ve know personally innumerable retirees to Costa Rica who, frustrated and fed up with the bureaucracy and high prices in that country, are moving again this time to Nicaragua.
Nicaragua comes in ninth overall in our Index this year.
The Pacific coast of this still very misunderstood and little discovered country is as dramatic as that of California, but today land along this coast continues to sell for a fraction of the cost of land up north in California or, more to the point, even just across the border in Costa Rica. You can secure a foothold on Nicaragua s coast for one-fourth the cost of the same thing in its neighbor to the south.
Nicaragua s foreign retiree laws grant you attractive benefits, including the opportunity to import your household goods duty-free and an exemption on taxes on your foreign-source income.
We began reporting on the opportunities in Nicaragua nearly a decade ago. Since then, we ve visited several times each year and, each time, have been impressed by the progress this country is making. On our most recent visit, just last month, though, the changes were dramatic. Construction crews and scaffolding everywhere in Managua and Granada new hotels, restaurants, and night spots. Granada, in particular, the country s premier colonial city, is moving up-market fast. The backpackers are being replaced by families and couples, from North America but also Europe. Norome Resort (www.internationalliving.com/norome) on Lake Apoyo, a half-hour outside Granada, where we spent a week with our children, was full to capacity.
Same story at Rancho Santana (www.internationalliving.com/ranchosantana), on the country s south Pacific coast, where International Living has been working for six years to build a private community for readers and friends. A steady flow of visitors during our recent stay, many looking not only to vacation, but also to own.
If you ve already invested in this country, you re sitting pretty. If you re not, this is your wake-up call.
Set to boom
In South America, Argentina, Brazil, and Chile are worth mentioning, as all three get top marks in the Real Estate category of this year s Index. We ve reported on these countries, especially Argentina, which is just beginning to recover from its most recent economic crisis, recently in these pages, and continue to believe that these countries offer tremendous opportunity.
You ll find extraordinary values in Chile right now. In Santiago s beautiful, clean, tree-lined Providencia neighborhood, for example, you can buy a brand-new luxury apartment--three bedrooms, two bathrooms, a terrace with great city views, and a park nearby--for $93,000. On the shores of Lake Villarrica in Chile s glorious Lake District, a one-bedroom apartment with expansive water and forest views lists for just $38,000.
If you re looking for a country with all the comforts of home, the ambience of Europe, and a Latino panache consider Chile.
Although Brazil gets top scores in the Real Estate category this year, it comes fourth last in the Safety and Stability category. This is an important consideration but there are safe places to live in this country, and property prices can be outrageously appealing.
As International Living has been reporting for the last year, Argentina has weathered the worst economic crisis in its history. But now, as the nation s economy begins to improve, you ll find tremendous opportunity and value...the chance to ride the tide of recovery...and profit...
The property values are excellent not only relative to what you might have paid in the past...but in comparison to what you ll pay right now in other, similar markets worldwide. In Buenos Aires, an elegant, cosmopolitan capital, you can pick up a 1,550-square-foot loft with a rooftop terrace in one of the city s chicest neighborhoods for $63,000. In Paris, a renovated loft in the 16th, about half the size, lists for a whopping $697,000.
Asked to comment on the safety of this country, our representatives and real estate contacts here, Paul and Maria Reynolds, has this to say: The current government appears to be placing major emphasis on security. And we had a new president elected in April, who has a generally good backing, so that has brought some sense of stability to the political and economical situation. For more information on real estate in Argentina, contact: Reynolds Propiedades & Relocation (Paul and Marķa Reynolds), tel. (54)11-4794-4100; e-mail: info@realestate.com.ar; website: www.homes.com.ar.
Life in the Emerald Isle
What about International Living s adopted homeland Ireland? It comes third last and gets zero points for Real Estate and Cost of Living. Property prices have been rising in this country for the past 10 years, in recent years, in some regions, by as much as 50% to 100% a year, year on year. Few bargains to be found, but if that s what you re after, look to the wild and undeveloped northwest.
The cost of living has also been rising steady for the past several years, and, since the euro changeover, has taken another big leap. Indeed, Ireland is the most expensive country in the Eurozone and one of the most expensive in the world right now. Hard to believe, but true.
What in the world, then, are we doing here? Ireland s greatest assets can t be measured with a calculator. This is a beautiful country, peaceful and safe, one of the world s few remaining outposts. Current-day troubles are far away. It s an ideal place to come home to.
It also offers a number of special benefits for retirees, including free healthcare and public transportation.
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