It has been my experience that while Panama is a popular retirement destination for ExPats, most of us still need to earn a living while we live here. Before you read any further, and this may disappoint you, but this article doesn’t include any amazing secret tips or get rich quick schemes to help you become a millionaire in Panama. You will have to look elsewhere for those magic beans. What this article intends to do is to describe the basic ways that ExPats are able to earn a living in Panama. Before I get into those, I want to start by talking about the one thing you SHOULD NOT do.
Come to Panama and Try To Figure It Out Later
If you want to discover a quick path to financial failure, then show up in Panama, sign a lease on an apartment, and then try to figure out how you are going to deal with that pesky issue of paying for your lifestyle. As I’ve mentioned before, Panama is not America’s 51st state. Panama is its own country, which means you don’t get authorization to work here simply by virtue of showing up here and saying you want a job. In order to work in Panama, you must get a work permit. If you are not getting a work permit through a company which has made you an offer before you decided to move here, then you can get one either through the Friendly Nation Visa or marrying a Panamanian. However, these take both time and money. Even if you are able to get one, you may end up very disappointed when you go and look for a job.
There’s a reason why things are generally cheaper in Panama. People are paid less, usually significantly less, than they are in the United States or another western country. Here are a few examples from recent job posts on Konzerta, a local Panamanian job board.
Office Assistant – $488 per month – 6 days a week.
Security Supervisor – $550 per month
Bi-Lingual Call Center Worker – $700 per month – 6 days a week
Bi-Lingual Accountant – $1200 per month
As you can see, those are not salaries that most ExPats can afford to to live on. So even if you an figure out how to get work authorization, it is not realistic to come down here without a plan. I am sure someone will read this article and tell a story about how they did exactly what I said not to, and how it worked out great for them. But they will be the exception, not the rule.
However, do not despair. If you have a plan, there are several ways you can move to Panama and still earn a good living. Here are the three main ways that you can do that.
1. Secure a Work Offer Before You Move
Working in Panama for an international company at an international (Western) salary is not impossible. There are a lot of multi-national companies that maintain significant offices in Panama. Dell, Hewlett Packard, Caterpillar, Nestle, Proctor & Gamble, and General Electric are just a few. The company you are currently working for may have an office here. Going through your existing company would be the easiest way to work in Panama under a work permit. I know several people who are living here now under these circumstances. Multinational’s are always transferring experienced people to Panama to work in their operations here. Make sure to keep the lookout for internal job postings within your company that offer relocation to Panama. If there are none posted, but your company has a presence here, see if you can convince your higher ups of a good reason of why it’s beneficial to the company to send you to Panama. If you can make a good enough case, it might even work.
If you don’t work for a company that has an office in Panama, you can still get hired here if you can convince a multi-national that you are of a specific value to them that makes it worth it for the business to hire you and relocate you here on an international salary. This is more difficult, but not impossible. However, in order to do this, you need to have specific, hard to find skill sets. Have “a good attitude” and being “detail oriented” won’t cut it. If they can find someone local who can do close to as good a job as you for about a third of the price, they will go with the local every time. But if you have a compelling enough case, you can get hired. I’d recommend researching companies with large offices in Panama and reaching out to them to see about available positions.
There is one way to get a work visa here that is utilized by enough ExPats that it’s almost worthy of it’s own category: becoming a pilot for Copa Airlines. Copa is the national airline of Panama, and serves as the regional airline for pretty much all of Latin America. It flies to many cities in the United States, so for many travelers, it is the only way to get from South America to the US with only one layover. They are rapidly growing, and hiring predominately foreign pilots. I know a significant number of ExPats who are here working for Copa. So if you are a pilot and looking for change in scenery, definitely check out the job opportunities Copa has to offer. Chances are they’re looking for you too.
NOTE: Working for an international company will pretty much lock you into living in Panama City as opposed to the rest of the country, as pretty much all the multi-nationals are based in the city and the immediate surrounding areas like Panama Pacifico.
2. Start a Business
It is actually easier to move to Panama and start a business and work for yourself than it is to get a job working for someone else. Foreigners can own and operate most types of businesses in Panama, and getting one started, while usually requiring the help of lawyer, isn’t too difficult. In fact, if you have a service you would like to provide here, it’s easier and more profitable to create a business and work as a contractor than as an employee. Starting a business is actually one of the quickest ways for Americans to get permanent residency in Panama, through the Friendly Nations Visa. You’ll want to contact a lawyer for more information on getting the Friendly Nations Visa (and not just listen to a guy on a blog), but the whole process can lead to permanent residency in a matter of months, and costs about $5k-7k, including legal fees (you’ll also be required to keep at least $5k in a Panamanian bank account).
ExPats seem to excel at starting and running successful businesses in Panama. My wife, who grew up here, has always said that ExPats can move here with “just okay business ideas, and people will go crazy for them.” You may have heard about the big economic gains that Panama has made in the last five years, including several years of double digit growth. The truth is a lot of those gains have been at the top, and have led to increased profits and opportunities for business owners, both locals and ExPats. There is always a risk with starting a business, and no idea is foolproof. But if you have a good idea and a little bit of capital, starting your own business may be the best way to earn a living in Panama.
Just one word of warning. If your business relies heavily on billing your own personal labor (for example, you want to open an auto shop where you’re the chief mechanic, or a hair salon where you’re the chief stylist), you will have to adjust your prices and income expectations to fall in line with those here in Panama. You will be competing against locals who will do the same service for a lot cheaper. You may be able to charge a premium for speaking English/extraordinary service, but you will still find that billing your own labor will earn you less than back home.
3. Keeping your old job and working from home.
If you currently have a job that is conducive to working from home, this is probably the simplest way to live in Panama while earning a good living. As technology continues to advance, more and more jobs can basically be done from anywhere with a computer and an internet connection. Some of you may already work from home in your country, or be self employed in a home based business. If so, it’s very easy to relocate yourself to Panama. The vast majority of ExPats who do continue working their old job do so in Panama without worrying about getting any new legal status.
For many countries, including the United States, Panama has very generous tourist visa terms. Calling it a visa is even sort of a misnomer, because you do not need to apply for one. All you need to do is show up in Panama with your US (or other friendly nation) Passport, and you can stay in the country for up to 180 consecutive days. All you have to provide is proof of a return ticket. As long as you leave within the 180 days, you can come back as often as you like. All you have to do is leave the country. Whether that is flying home for a week or even taking a bus to do a day trip across the Costa Rican boarder, when you come back in the country, your 180 days will start anew. There are quite a large number of ExPats who have lived here for years doing these “border hops.” The Panamanian Government appears to either have a completely blind eye towards them or be tacitly encouraging them. So people choosing to work their old job from homes just keep themselves as a permanent resident of their home country, while living in Panama on a “vacation” status.
A few words of warning: some people have reported having to show financial viability sometimes at customs during border hops, particularly at the Costa Rican border. If you are planning on staying in Panama on this status, please seek advice from those who are experienced in doing these before you make your first trip to renew your visa. Also, even though you can stay in the country for 180 straight days as a tourist, your international drivers license is only good for the first 90 days of each trip. So if you are planning on owning a car, you will need to leave the country every 90 days or risk driving without a valid license. Lastly, just because the government has been tolerant of this kind of semi-legal living in Panama, does not mean it will always continue to be. You will technically be in a legal grey area, and that could be an issue if the government ever changes their mind.
If you have a good, well thought out plan on how you are going to earn a living in Panama, there are several ways you can do so while still earning close to what you were accustomed to back home. However, the one thing I strongly caution against doing is moving here with no plan on how you are going to pay your bills, and just hoping to figure it out later. While that may work occasionally, it is a very risky move, and can cause you to blow through your savings rapidly.