Panama Facts – The ones they do not tell you about!

What you are going to read sounds outlandish. Check it out and you will see we are right. This stuff is too hard to make up.

Panama Permanent Residency – Many people get confused about the residencies in Panama. They call them “permanent” but this only means they do not need renewal. They do not come with any of the rights of say a green card holder in the USA. They will not give you an ounce of protection regarding extradition. Another country wants you Panama will just throw you to them. Forget any court hearings. The residency ID cards be they a carnet or a cedulla (including pensionado, residency of any sort) will not let you open a bank account in Panama at any bank. You will need to show your passport from your home country to get a bank account. The pensionado and permanent residency is just an extended visa and no real rights associated with it like a bona fide permanent residency in the USA. To make it worse if you qualify for the residency say based on real estate investment ($300,000) you cannot sell the real estate. If you sell it you are eligible to lose your residency. So if you have a residency based on this for 15 years you need to keep the real estate all 15 years. If you were married to a Panamanian citizen and by reason of this marriage got a permanent residency you must stay married to keep the residency. If the spouse divorces you or vice versa no more residency. If the spouse dies same thing could happen, as we understand the law. There is no security with a Panama Residency. They should call it a no expiration date visa.

Panama Citizenship – The law reads that after having a permanent residency for five years one is eligible to apply for citizenship. It does not say you are going to get a citizenship as if this is the only requirement. You need to get the President of Panama to approve your application. When we took a look we saw an average of 2.5 people a year were granted these citizenships in the years we looked and their last names were the same as those holding political office. So yes after five years you can apply but statistically don’t hold your breath.

Panama Banking – The banks operate in Spanish. Some banks have some English speakers at some branches. Most of the critical banking is done in person. You drive down there in the traffic, sit in the lobby and wait your turn patiently. Yes it will get done providing the person speaks English or you speak Spanish. Many of the banks have online banking. Only some are in English. Only some allow one to send wires out online. The banks have grueling due diligence requirements including bank reference letters, which can be construed as a suspicious transaction in many jurisdictions. You are basically only going to be banking in USD. You can receive Euros at some banks and then pay high fees to convert to USD. If you hold Euros don’t expect to earn any interest. Corporation and foundation bank accounts cannot receive any debit or Visa cards. For cards you need a personal account and then the cards have your name on them.

Assets Not So Safe in Panama – There is a way to get a court order in Panama from a Panama Court to garnish, lien or levy a Panama Bank account. If you do not know where the person’s bank is you can have the court send a Fax to all the banks in Panama asking them to seize, lien, levy any bank account associated with the name of the person as a beneficiary owner or signatory. This is called a Sequestro. Will this include foundation or corporate accounts too? It might, depends on the case, the judge and the court. The plaintiff will have to post a 10% deposit on the amount to be attached. If the defendant prevails in court this deposit can go to the defendant. It may also take months or years to get your money back. This could destroy your business and your personal finances and even bankrupt you, all based on just allegations.

Civil Law Suit Games in Panama – If you are in a civil fight in Panama the adversary can post a bond of say 10% of the cash value of an asset and have it seized. This is called an Embargo. It goes to storage until the case is decided in court. Time frame is usually three years or longer. This has been used to take the personal contents out of a persons home including the beds, furniture, TV, computers, linen, towels, dishes, firearms, jewelry etc. There are no exempt items except medicine and some necessary medical equipment as a possible exemption. So think if they take all your furniture, refrigerator, clothes, beds, car etc and also lien your bank accounts what are you going to do? They could also garnish a car, a plane or a boat this way and put it into storage. What a nice court system! Asset protection in Panama has a lot of problems. If you do not live or operate a business in Panama the risks are much lower. Panama has a bad reputation for corruption.

Preventive Detention – If you are charged with a crime in Panama you can be arrested and held in preventive detention until the trial, figure three years. If you are a foreigner unlikely to return if allowed to leave, you will not be able to post a bond. Having a pensionado or residency status does not mean you are not foreigner. A Panamanian citizen is not a foreigner, and pensionado or residency status is a foreigner. If you are a Panamanian with roots and family in Panama you can generally post a bond to avoid preventive detention if in fact they even get to considering preventive detention. It is guilty until proven innocent over there. Preventive detention has better conditions than regular jail but it is still jail. They do not give you health care coverage in jail. Think about your health if your money runs out and you are still in jail.

Search Warrants – The police in Panama do not need a search warrant for any reason to search anything. This can include your home, your person, your car, your vault box, your business etc. This is fine if you trust the government, I guess.

Crime of Passion – If you catch your spouse with another person being intimate you can kill one or both of them as a crime of passion and not be prosecuted. The crime must happen as soon as you catch them. You cannot like go to a friend’s house, get a gun and return in that this would be premeditative. You could do this with a girlfriend or boyfriend but could be more risky than with a spouse. So you can get away with murder in Panama.

Gun Rights – You can get permission to own and or carry a gun in Panama as a permanent resident or pensionado. Now they want an Interpol records check and the wait for that could be well unlimited. It takes most people three to five years to get a permanent residency so what do you do for the first few years? Panama has a high crime rate. To get a gun you need to supply DNA from your blood. There is also a urine test (drugs) and fingerprints. Then the gun goes in for ballistic sampling. Process can take several months. Who do they share your DNA with? There have been some close calls regarding people losing many of their gun rights. Something that can happen at any time completely or in a diminishing capacity. They are making it harder and harder to get guns and a license. Foreigners are getting discriminated against more and more.

Crime in Panama – Panama used to be a safe country. This changed by 2008. It is not a safe country anymore. You hear of ATM robberies, kidnappings, home invasions, burglaries, and street crime. You wake up in the morning and read all about the drug busts, which seem to be never ending. Then you read of people caught at the airport with a few million dollars in the luggage, undeclared of course. The drug traffickers kill each other with regularity. They are found dead in their palatial condos with a bullet in the head. They get shot in the street. Once on via Espana near the big church in 2008 across the street from the Crowne Plaza there was a typical drug execution. A drug type walked out to his car and two guys came up on a motorcycle and sprayed about forty rounds at him in broad daylight. Bullets hit the buildings. Women standing there were traumatized as they saw the body dancing from the impact of the bullets. The shooters then drove away on the motorcycle blowing kisses at the crowd like an opera singer. They were never caught, as far as I know. There were several different drug related shootings in front of a big El Cangrejo hotel in a period of two or three months. People get home invaded in private homes and sometimes in new condos with security. Suspects are usually the security guards. They tie the people up, beat them, force them to open safes, rape is optional. Women are afraid to go to the malls due to people jumping in the car with them and doing who knows what. Panama crime is now up there with any third world country.

Police in Panama – Well they are present. You will soon be annoyed at their roadblocks. They look in car and check papers. It soon becomes a real pain. They go to restaurant and tourist districts at night and check people’s papers. Used to be a foreigner could stay in Panama for years with an expired visa, but now off to immigration jail. Fines and then you leave. If they see a crime being committed they will engage the perpetrators. They will not turn a blind eye. If they do not see the crime being committed it is a safe bet they will never catch anyone. Their investigative resources leave a lot to be desired and they move slowly. They do not have sophisticated labs or crime scene analysis. If you are experiencing a break in and call, well I think one way or the other it will be over before they arrive, if they ever arrive. Forget calling if you do not speak Spanish. Always make sure you know who you are opening the door for even in a condo with security. They corrupt someone’s maid to buzz them into a building and then try to get into several homes. Home invasions are traumatizing to say the least. Make sure your maid does not set you up by leaving the back door open, losing her key etc. A home invasion usually means a major beating, probably rapes, being forced to open any safes, beaten hard to make sure you are not concealing any valuables. They may take your car keys and drive away with your car. They may call you up the next day and for a price tell you where they parked your car. They will leave you tied up and maybe gagged. You might be like this a long time. We suggest one live in a modern high rise with a lot of security guards, cameras, etc.

Fire Department – Their fire department has no equipment to do anything about a fire in a big high rise. They may be able to get up maybe 15 or 18 floors but higher than that you better have your own way out. They are not going to come in and get you if you are up 35 floors. What if you are 50 or 80 floors up? How about a power failure and you need to get out from a big high rise?

Ambulance – If you are not a citizen you are not entitled to use their ambulances. Take a cab, drive yourself or walk. If you happen to be bleeding out try direct pressure. If you cannot walk, not sure what to tell you. You could get a private ambulance service, not cheap and you pay by the month not by the call. So if you think you may need it subscribe to a private ambulance service.

Hospitals – They probably are not going to take your health care insurance if from a foreign country. You may be able to get reimbursed but it probably will not work for payment to the health care provider. If you go to the ER to see a doctor you pay before you go in for the ER visit. Then the doctor evaluates you and orders tests etc and then you pay a second time before the work is done. Same thing if you are there with two broken legs. No credit card or cash, no treatment. They do not have to take you in and do not expect them to. If you are a citizen then you go to a public hospital for free. Please note all the funeral parlors and hearses across the street from the public hospitals.

Maids – A large (understatement in reality) amount of the maids are dishonest. They steal. They steal bulk foods, makeup, clothes, jewelry, lots of things. You have it, they steal it. There is a maid shortage so their wages are up. They get one-month vacation after 11 months of work. Nice. They get about 18 or 19 holidays in addition each year. When was the last time you had six or seven weeks paid vacation a year? Does this tell you why there is almost no manufacturing work in Panama? They get sick days. If you fire them or they quit, expect it to cost you some money. They almost automatically take you to the labor department. You will lose; only thing you can do is control damages. You need to take the employment agreement to them for approval when hiring. If approved this gets filed with the labor department. Think legal fees. When you fire them, you go back to labor board and get them to approve settlement pay. Guaranteed to make you pull your hair out. Legal fees. Many phone rooms came to panama and got busted out by the insane socialist labor laws. The owners get sick and tired of getting dragged to the labor board by bad and dishonest workers. Maids will rob from you and then take you to the labor board. Report this police. Do not go to labor board hearing. Tell labor board police are looking for the maid and to call them if she shows up, and they will. It is an unbelievable mess. The latest administration is talking about modifying these labor laws but so far nothing.

Gringo Pricing – If you are obviously not a local they will raise prices on you. If you speak Spanish this will not help. If you use your driver or other person to help you they will tell the store clerk they want 10% or they will tell their client to shop elsewhere. ESTO ES PANAMA! This is Panama. Panama has been dealing with foreigners since 1913 and they are extremely good at fleecing them. Many of them have been trained since childhood in gringo fleecing. Panamanians have an unspoken code and stick together against foreigners, always. They are never really your friends, you just think they are. That is how it works. Don’t believe me carry a voice activated tape recorder with you and record your driver negotiating with shopkeepers or even workers coming to the home to bid on jobs. Get the tape translated and there you have it in black and white. They are there to fleece you and they will work together to do so.

Drug Use in Panama – Drugs are there and maybe 1/10 the price in North America and EU. They have drug tourists who come there, rent a house, buy bulk quantities of drugs and then invite their friends down for extended drug binges. They are in Bocas del Toro and other places. They risk big jail sentences but since they are just users they will probably just get thrown out of country after they say where they got the drugs. These are people Panama does not need.

Prostitutes - Prostitution is a legal activity in Panama. You will see prostitutes on the streets. You will see mens clubs and so forth. If you are a married couple make sure the wife knows about this before coming. A lot of the street walking prostitutes are female impersonators so prepare your family for this.

Outside Panama City – This is full blown third world. Only the city is modern.

Summary – Panama used to be safe, no more. Panama used to be cheap, no more. Panama used to have easy immigration, no more. Panama used to leave people alone and let them do what they want especially in business, no more. Labor used to be cheap in Panama, not as cheap as it used to be. There are a lot of central and South American Countries where you can do better.

Tip – When you are in Panama sooner or later someone will say to you “You are a guest in their country”. Never ever immigrate to a country where you hear this. Your response should be correct and since they are never going to respect me enough to give me any status as a citizen I will take my money elsewhere. If a country does not give you a clear path to citizenship in 3 or at most five years pass and find one that does. Go find one where they have enough respect for you and your purchasing power to give you a citizenship after a few years. Then you can get a second passport for travel and banking. In all of Central and South America Panama has the hardest immigration laws. Don’t go to any country that taxes offshore-derived income. Panama does not do this. Brazil and Argentina does even for residents. You do not need a second Revenue Canada, Inland Revenue or IRSA in your life so do not even give this a second thought. If you think we can help you in your quest for a country to live in give us a call.