This is an e-mail from a member asking for my opinion about Costa Rica versus Panama as a retirement destination.
Hi Roberto,
I was thrilled to find a Picton guy and his wife writing about retirement destinatiions. I'm planning to head down to check out CR this winter....my 21 year old is going in three weeks....I had picked up the book Retirement Without Borders and it lists Panama as best and Costa Rica a little lower on the scale. I'm torn between the above mentioned....but a friend from here in the beaches is selling and moving her restaurant business to Panama City....wants me to follow. Would love to chat with you both Take care, Sharon W., Toronto Canada
Dear Sharon,
I love Costa Rica. I almost bought property there six years ago. I had a beautiful oceanfront property all picked out, hired a lawyer and an accountant that knew real estate, and then I found out about CR's "squatter's rights".
If someone squats on your land for six months, they have a legal claim to it - so you have to hire a security guard to keep people off, but you have to fire the security guard every five months, because he will let his cousins squat and then claim it.
The benefits to retirees in Panama was modeled after CR's. It is the best on the planet. However CR has now cancelled almost every provision they had — they have virtually no benefits at all now, whereas Panama has all of them.
The final turn-offs about CR for me were:
A) The reaction of CR Tico's when I said I wanted to buy property there — they love tourists, and want our money, but no so much affection for immigrants. They stopped being friendly to us after we told them we wanted to move there.
B) The import tax — at the time (six years ago), If you brought a $40,000 vehicle into CR you paid 100% tax on it.
In Panama, as a Pensionado, you can bring in or buy a new vehicle tax free every two years. There is also excellent, Englsih-speaking medical and dental care, modern infrastructure, direct 5 1/2 hour flights, no taxes on foreign income, no taxes on bank interest (which as of Nov 2009 was at 3.75% for a chequing account) very easy immigration procedures and the fact that Panamanians genuinly want you here.
Panama has not had much of a recession — the canal expansion is a huge economic stimulus project. The banks here are 60% liquid — very stable. There is Scotiabank, HSBC, Citi Bank, and eighty others. They use the US Dollar as currency.
Panama has never had a hurricane in recorded history and few of the damaging earthquakes CR frequently has.
Add to that the 10% — 50% discount Pensionadas get off everything in Panama - groceries, airlines, car rentals, hotels, restaurants, prescriptions, medical visits and more - and it is a convincing argument for Panama over Costa Rica.
I bought in the Pacific beaches area of Panama. I like Panama City, but if I am going to move to the tropics, I want:
A) a warm ocean, and
B) a tropical garden
I drive the one hour and fifteen minute trip to The City at least two or three times a month. I love to go shopping (you can get everything and anything in Panama City - Panama has the second largest Free Trade Zone in the world next to Hong Kong), excellent restaurants, and great bar hopping, but I would never live there — it is 1.3 million people jammed into a small area, huge traffic problems, polluted, dirty, dangerous in some areas, is NOT a walking city, and it is hot and muggy MOST of the time - it is at sea level, and only 7 degrees from the equator. (Did I mention I LIKE Panama City? I really do)
It is always great to have friends around, especially in a new country, and we can always use another great restaurant in Panama. (Buy the Rsetta Stone Spanish course - you need to learn basic phrass in Spanish in Panama, don't believe the tourism/real estate hype)
However, as I always say, everyone's needs are different — investigate the places that meet YOUR needs. Take your time - it is a big decision. Go for at least a month, go more than one time if you can, and rent - don't buy until you have been in the country for at least six months.
I hope this helps.
Roberto Chocolaté
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