Is Guatemala the Next Panama or Costa Rica ?

Is Guatemala the Next Panama or Costa Rica ? - This is the subject we will explore. I have been getting requests for more information on Guatemala so here it comes.

Why Guatemala? – Because Guatemala has not yet caught on with those seeking retirement tax havens. This means it is still a bargain, a sleeper if you will. Once the word gets out the prices will soar and the crowds will come. We are seeing the word get out now. Offshore havens start out inexpensive and then the real estate prices rise and keep rising. Soon things get too expensive and out of price necessity another new haven pops up with lower prices for those that can not afford the existing havens that have been built up and priced up. Of course those that bought into the market early on stay in the country enjoying the positive equity in their home and the luxurious lifestyle.The early bird catches the worm. Welcome to Guatemala, early bird.

Is Guatemala Going to be the Next Panama or Costa Rica? – Well Panama started to light up in 2005 and by 2007 was booming. Panama came up as Costa Rica was winding down. See what I mean. One comes up and and then becomes too expensive and another country pops up. So what happened with Panama. First of all they had a real estate boom driven by property flippers. The government and developers did not understand the problem of real estate flippers. Many developers had an option on a lot only. They put up a website and billboards and pre-sold condos. Condos were the rage, not houses. Many of these projects never completed. This did not stop the flippers from selling the unfinished project at a profit early on. Then the developers stopped the flippers. Well then along comes the recession. Now people cannot sell their real estate at home and buy a Panama home. Then the pre-sell projects started folding and being revealed as frauds in some cases. Prices dropped. Lawsuits mounted. People stopped coming so demand dropped. The government made immigration extremely hard. Panama has the worst immigration laws in Central and South America. They have bad privacy laws. They have awful civil laws. They signed a tax treaty with the USA and other nations. They are ending their corporate secrecy. In a word they had something, they tried to run up the prices too much but could not hold onto it. So now the world needs a new Panama. It needs to be close to the USA and Canada so people can fly home to visit. It needs to be affordable due to the recession. The privacy, gun and immigration laws need to be favorable for expats. Wages need to be cheap for domestic help. Food needs to be cheap. So along comes Guatemala, potentially the next Panama.

Why Would Guatemala Be the Next Panama or Costa Rica ? - We will list some reasons below.

Weather – Many areas in Guatemala are elevated. Figure about 5000 ft high. Guatemala City is 4900 ft. high as is Antigua. The weather becomes very comfortable. The temperature stays between 55 and 75 degrees year round. This means the houses have no air conditioning and heat. They do have ceiling fans. Yes utility bills can be quite low.

Houses – Except for some condo projects in Guatemala City, the housing is mostly single family houses. The houses are built as patio homes. They have walls surrounding the house. The houses tend to open up and flow into the patio which has fountains and gardens. Much of the home security and privacy is the wall. Many of the houses are inside of gated communities with armed guards. This keeps you secure and free of peddlers and other nuisances. The houses are mostly built out of concrete block filled with concrete and rebar inside. The floors are normally nice looking decorative tile. So the houses do not burn. The homes are solid and insulate well.

Housing Prices – Well five star homes are going to run about $1000 a sq. meter. A sq. meter has 10.75 sq. ft. There are a few homes and condos that sell for more but this is the exception not the rule. You can also get beachfront unobstructed houses on the pacific ocean beaches for about $140,000. The weather there will be in high eighties and humid. You can also get farms relatively cheap. The prices will be all over the place depending on location, size, crop, buildings and a number of other factors. We do have a real estate section.

Food Prices – You can get free range beef which is almost organic delivered to the house, custom cut for $3.25 a pound. Vegetable and fruits are abundant and about $15% of the USA price. We have a 12 month growing season. Chicken is so cheap we feed it to our dogs with rice and veggies instead of dog food. Open air markets are great for fruit and vegetables. We have no GMO food that I know of in the fresh air markets. Just stay away from any imported foods. You can go to Price Mart and get garbage GMO junk imported from the USA. Just go after local produce and domestic meats. They also have Argentine meat which is clean too, but I think the Guatemala meat is better and clean also. We get fresh goat milk right out of the goat, it is even warm. The guy brings the goats to the house and milks them in front. No FDA to arrest him for selling unpasteurized milk. For cow milk the same way is available but you need to go to the cows if you want it that fresh. People that move to Guatemala from the USA will often drop 20 pounds without going on a diet. This is from eating foods without the bad additives and chemicals.

Immigration – Residencies are very fast and easy to arrange. No need to put money in banks like in Panama. Show a $1000 a month income and qualify for a pensionado retirement visa good for life. Can be done in one or two weeks. Cost is $7500 for one or a couple. Citizenship possible in two years. Want just a regular residency $2500 for a couple, done in 7-10 days. Renewable in two years.

Domestic Help – A live in maid is about $150 a month. They work 5 and a half days. They do not steal as a general rule. A gardner with be about twice that for a good one that also does repairs around the house. A driver will ruin about $400 a month.

Taxes – No tax on offshore derived income. There is a 12% VAT tax which runs the country. It does not apply to food.

Banking – You can bank in the local currency as well as in USD.

Bank Secrecy – Yes we have it.

Tax Information Exchange Agreement with USA, Canada and EU – Do not have it.

Mutual Legal Assistance Treaty with USA – Do not have one.

Anonymous Corporations – Yes we have them.

Roads – Very good and not in disrepair. Usually two lanes each direction divided like a state highway in the USA. No lights at night.

Cars – You can buy american cars at about the same price as in the USA due to a treaty. They usually do a three year warranty. Three year old used cars run about 40% to 50% of the new car price.

Pharmacies – Most prescription drugs available without a prescription. Cost is about 35% of USA price.

Doctors – They do house calls for $25.

Vets – House calls for $25 plus cost of medicines.

Importing Pets and Household Goods – Easy. Dogs and cats clear airport in 2 hours. Can bring in a container of household goods. Taxes are modest. You can import cars and motorcycles, some taxes apply. If car is over three years old will be modest taxes.

Guns – Residents and Citizens can get pistols, rifles and shotguns. They can get licenses to carry them concealed. No country is going to let you import your 60 piece gun collection. Maximum of maybe two guns could be imported after you have a license and status in the country. Inquire.

Tourist Attractions – Antigua, Guatemala as a tourist attraction is also a prime expat destination. Lake Atitlan is another tourist destination. Then there are numerous Mayan Ruins, Volcanoes, Beaches, Rain forests etc. Major Hotels are Westin and Intercontinental plus great independent hotels. There are hundred of great restaurants at bargain prices. You can get any kind of food you want including vegetarian and organic in restaurants.

Air Travel – Southern Florida in 2.5 hours. Houston in 3.5 hours. New York and Los Angeles in 5.5 hours. Non stops to Spain, Buenos Aires, Santiago, Mexico City, San Jose, Managua, Panama, and many other major cities.

What if Guatemala is the Next Panama – Well the first thing is the real estate will go up a lot over two or three years. The $1000 a sq. meter properties will go up significantly in value. They will not triple or anything like that due to the worldwide recession/depression. Seeing a jump of 50% to 75% in value would be realistic. So you could have a property for $150,000 and then see it sell fast for $225,000 or even $250,000. Not so bad. There will be a lot of new homes being build as well as condos. New businesses oriented towards the ex pat will boom. Hotels and bed and breakfasts will do well as people come here to “check it out”. You don't need a license to sell real estate here. So a cottage industry selling real estate to expats will pop up. Opportunities for people able to get offshore funds to finance mortgages here will abound. Banking will expand. Restaurants, bars, clubs catering to expats will do well. Travel agencies catering to expats will open up. Expat english bookstores serving coffee will open up. People wishing to live off the grid can easily go a few minutes out of town and get a house with land for animals and gardens. Eco housing is easy to get built and approved. Solar works well due to altitude and weather. When Guatemala goes it will go big. All the ingredients are in place. Obama is an excellent motivator. The break up of the EU which we are seeing in its earlier stages is another great motivator. The big reason is Guatemala is nice and affordable. People can move here and live very well in a great climate for very little.

Summary – The country is primed to be the next Panama or Costa Rica. All it needs is a little time to take hold.

Where is Guatemala? - Don’t be shy this is a common question. Please see the map below. Guatemala is a short flight from most destinations in the USA (2.5 hours approx.). Check out COPA and TACA airlines.

Guatemala Weather – Guatemala has spring weather 12 months a year with temperatures ranging between 55 degrees at night and 75 degrees during the day. It can occasionally get up to 80 degrees on a hot day. Generally the houses have no air conditioning and no heat but many do have a fireplace and one can add in a space heater if cold. Guatemala has a rainy season lasting several months like most Central American countries. The dry season is typically December through April, with slight variances. Guatemala is a tropical climate. The capital, Guatemala City and the old capital city Antigua now a popular retirement haven, is located at an elevation of some 4850 feet, which accounts for the cool weather. The elevation while slightly less than Denver, Colorado is not enough to bother anyone or make you really notice it.

Guatemala Population – 14,000,000. The capital city Guatemala City has almost one million people. Antigua Guatemala has about 50,000 people. Antigua is forty minutes form Guatemala City. Same travel time for the Guatemala International Airport.

Guatemala Culture and Language – The country is a very modern civilized country but does have rural areas that are not developed. Guatemala City has everything you would find in North American cities. Prices are low for many things like food, alcohol, entertainment, maids, gardeners, drivers, workers etc. There are a lot of Mayan Indians in the country and they have many different dialects of language but Spanish is the dominant language. English will work only at the better hotels, shops, restaurants, banks, lawyers’ offices and so forth. The average Guatemalan does not go around speaking English. The people are very family oriented. There are numerous Catholic and Evangelical Christian Churches. In Antigua one can get around fine with only English.

Guatemala Holidays –

• January 1st – New Year
• March/April – Easter (Wednesday, Thursday & Friday)
• May 1st – Labor Day
• June 30th – Army Day
• August 15th –Guatemala City only holiday
• September 15th – Independence Day
• October 20th - Celebration of the Revolution of 1944
• November 1st - All Saints Day
• December 24th – Christmas Eve (starts at Noon)
• December 25th – Christmas
• December 31st – New Year’s Eve (starts at Noon)

Guatemala Electricity – Same as in North America. Appliances use same plugs.

Guatemala Currency – The national currency is the Quetzal. The country is not dollarized like Panama, Ecuador and El Salvador. It currently coverts at a rate of about 7.5 Quetzal to one USD. Foreign denominated credit cards are accepted widely. You can exchange money at the airport on arrival or at any bank. Banks are open on Saturday and Sunday too. Businesses tend to go seven days a week in Guatemala. Credit cards and debit cards will work in a lot of ATM machines and give you local currency.

Guatemala Entertainment – In Guatemala City or Antigua there is an abundant supply of things to keep one joyfully occupied. The theater is present, as in ballet and opera. There are numerous spa type gyms to be found around town that have the latest equipment and classes. Soccer is a popular sport as is bicycle racing. You can go into the countryside and hike, ride bikes, go to the beach, swim, dive and even surf.

Crime and Safety – Guatemala is very safe in some places and is not so safe in other sections. This is fairly typical today in any country. Many expats and retirees reside in Antigua, which is a suburb of Guatemala City located some 40 minutes away by car. Antigua has a special tourist oriented police force that keeps it extremely safe, better than many USA and Canada Cities. People drive vespas, ride horses, take three wheeled motorcycle/taxis (TukTuk), horse drawn carts and of course walk. Ladies Antigua has cobblestone streets so the high heels can be hard to walk in. Antigua is a very artistically oriented community with many artisans selling their wares on the street and in shops. Goods are cheap. Guatemala City has numerous numbered zones. Some zones are safe and some are not. This is typical of large cities anywhere. One would probably have little or no need to go to the unsafe zones so in this way it is easily managed. We do have drug gangs present in the country mostly near the Mexican border. Guatemala sadly is a transit point for drugs to go through into Mexico and then onto the USA. The gangs occasionally get into fights for whatever reasons and kill each other. This tends to drive up our crime statistics. If you know where to go and when to go there you should be fine. We prefer to relocate people to Antigua or the surrounding suburbs of Antigua. It is extremely safe there and a lot of english is spoken there. Real estate is most reasonable as well.

The police do not go around bothering people minding their own business. They do not waste their time with scores of victimless crimes. Guatemala has not criminalized business like many countries and one can plan on being left alone by the government. The government is concerned with people laying hands on others violently, pointing guns at people and robbing them. If you are looking for a place to be left alone as long as you don’t bother others Guatemala is a good place.

Guatemala Guns and Firearms - You can get a permit to purchase and carry concealed weapons (pistols) and own shotguns, rifles, etc even as a resident. Guatemala wants people owning and carrying firearms to have a permit and to have the guns registered. I would say it is a very reasonable policy considering what the world is like today. Expect to pay high prices for firearms, perhaps double the USA price. Ammunition is not cheap either. Gourmet ammo is very hard to come by, so it is mostly ball with some hollow points available but let us not forget it is all about bullet placement not design of the projectile. No ammo designed to be armor piercing is allowed. Magtech ammo is now being sold even in +P format. Not all brands are available new. Glocks are abundant, Berettas can easily be found, some H & K pistols, even Sig Sauers. There are also a lot of less expensive firearms available. They have no restrictions on high capacity magazines in handguns. Silencers and full auto are not allowed to be owned by civilians. Folding knives of under 4” can be carried as long as they are not automatic or double edged. Workers can often be seen carrying (not brandishing) machetes. When carrying weapons in a foreign country do sit down with a knowledgeable attorney for a nice long instructional lecture as to how the local judicial system works in that country with an emphasis on self-defense. Things are reasonable in Guatemala but some things are different and you should know this information before, not after an incident.

National Tourist Board (INGUAT) – This government agency is designed to help tourists with problems they have with merchants. They will try to take your side if at all realistic. They can be contacted by phone as follows:

Guatemala City –

7 days, 8AM – 4PM – Tel. 33 130 75
Night 4PM – 9PM – Tel. 33 142 56
Weekends and Holidays: Tel. 33 142 56
Their Faxes are as follows: 3318893 and 3322881

Other Offices -

Antigua: 8320763
Quetzaltenango: 7614931
Panajachel: 7621392
Flores Petén: 9260533

Cost of Living – You can get a very nice condo or townhouse in the city for $150,000 with three bedrooms, pool, balcony, security, enclosed parking and a view. The condos are not built one on top of the other so there are no people looking into your windows. Your electric bill per month should be under $100.00, water bill will be about $20.00, garbage about $10.00, land line phone is about $20.00 per month for fixed cost, internet will run $25.00 to $50.00 per month depending on what type and speed of connection, a live in maid will run about $150.00 per month, and you can rent a place that is nice for $600.00 to much higher depending on size, location etc. Living on $1500 a month as a renter would be a little challenging but possible, $2000 a month would be easy and provide a lifestyle with a live in maid, evenings out in restaurants, clubs, trips in the country etc. If you wish to become a homeowner in Guatemala figure on annual property taxes of 0.9% (9/10 of 1%).

Beaches - Guatemala has beaches but they are generally black sand and at sea level so they get hot. What is hot ? Well temperatures going into the high eighties or low nineties. There is also a brown or tan sand beach as well. If you have never been on a black sand beach it is worth seeing one. The minerals in the sand sparkle and glisten as you are walking from sunlight reflections. The sand being black can absorb heat and get hot. I know you Canadians reading this are going to get excited by this since you think there is no such thing as a beach that is too hot. My advice is you are probably right for a few years anyway and then you might want a change to a cooler region. You will find beach prices to be lower than most countries in Guatemala. Guatemala has a 12% VAT tax on goods so retail prices will be higher than other countries on some taxed goods. Guatemala does not tax offshore-derived income, so it is a true tax haven.

Guatemala Property Rights – As a tourist, resident or citizen of Guatemala you are entitled to buy property and have clear title to the real estate. As a tourist or resident you have all the property rights of a citizen in Guatemala. You will have a freehold title registered in the government registry in the name of you personally, your corporation or your foundation. A foreign corporation or foundation can own property in Guatemala as well. You would be free to live in the property, rent it out, finance it, sell it etc.

Real Estate Financing – This can be a little difficult but not that bad. The banks usually wish to see one have a lawful residency in Guatemala. Then they wish to see proof of income. They will not bother with home country tax returns and home country credit reports so more privacy is possible. Loans for real property can be in USD or the local currency. If the loan is in USD you need to make the payments in USD and they will often peg the interest rate at US bank prime as a variable. 25 year fully amortized terms are available with 20% down payment and they do not require life insurance. If you can not qualify or do not wish to go through the process we can arrange a more private type of arrangement which generally requires 30% down payment and this will keep your name off of all bank records, escrows and titles if you wish. If you have the 30% down based on a fair independent appraisal on a quality piece of real estate we could arrange such terms.

Guatemala Military – Guatemala maintains a small military and navy forces, 19,000 in size. They have no military draft. Guatemala would be most unlikely to engage in any international aggressive military ventures. The military does watch the borders guarding against illegal entrances.

Guatemala Food – The food in Guatemala is excellent and inexpensive. A steak dinner for $12 is easy to find and a gourmet high-class steak dinner is perhaps $20 a person. Inexpensive wines are readily available and that would be extra but a good bottle can be as little as $7.00. The food tastes like Central American food with a strong Mexican influence but they do not favor very hot spicy seasoning at all but it is available if you prefer. Beans, rice and tortillas are usually served. Lots of fresh tropical fruits, great veggies, their breads and pastries are superb; meats and seafood are very good too. You should find the food to be most enjoyable. You find restaurants offering all sorts of ethnic foods (Chinese, French, Italian, Thai, etc) as well. Guatemala is loaded with fine restaurants and Antigua even more so.

Guatemala Shopping – Just about anything you can get in North America you can get in Guatemala. There are numerous malls (19) with stores selling the popular designer labels. Guatemala malls look like North American malls. The malls have movie theaters with multiple theaters. Movies are generally in English with Spanish subtitles. There is even an IMax theater in Guatemala City and the Disney large screen equivalent. There is Price Smart in Guatemala and Wal-Mart (mega stores).

Guatemala Medical – There are numerous modern hospitals in Guatemala. Medical care costs about 25% of the USA prices. Figure on a root canal and a porcelain crown complete for $250.00. Plastic Surgery costs are very low in Guatemala perhaps below 25% of the USA prices for competent work. Prescriptions are generally not needed in the Pharmacies and drug prices are about 33% of the USA prices. Most drugs are available but you do need to know the names in Spanish or the name of the equivalent drug in Spanish. Generic drugs are popular. There are Chiropractors, Acupuncturists, Herbalists, Homeopaths, Physical Therapists, and Massage Therapists for those of you interested in alternative health care. They have no controls over supplements, herbs, minerals etc.

Guatemala Cars – The people drive reasonably well compared to other Latin America countries. Many of the cars are Japanese and Korean smaller cars. Gas is about the same price as the USA. You can easily get a Guatemalan driving license if a resident. Local buses are not recommended for foreigners but there is an ample supply of taxis. There is a marked absence of any radar or laser guns. Police do not have tasers. There is no point system for tickets. Insurance companied only get notified of accidents, no tickets.

Guatemala Communications – Cell phones can be prepaid or with a plan. Coverage is like it is in North America. We have 3G and 4G networks. Internet with high-speed connectivity is readily available. They offer 5 meg speeds, but might come through as about 2 megs. In any event it is high speed enough for just about all. You can get anonymous internet with a USB modem by paying cash. It is relatively fast using 3G network. You might get three meg connectivity with this if in right area. Cable TV and Satellite is available. Cable gives one about 40 english stations including several major networks. Newspapers are in Spanish. Start one in English for the expats moving here if this is what you do. Antigua and Guatemala City have tourist magazines in English. You know lots of adds for local businesses.

Summary – There is a lot of bad press about Guatemala. One country in particular does not want to see another Panama or Costa Rica emerge. Take this with a grain of salt. Much of it is designed to discourage people from expatriating. Please remember there is never going to be a perfect country to expatriate to. It is always going to involve compromises.