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Comparing Panama And Colombia: Living, Retiring, And Investing

02 Jun
Panama City, Panama to the right and Medellin, Colombia to the left, comparison

Comparing Panama And Colombia: Living, Retiring, And Investing

Which Is A Better Plan B Plan—Panama Or Colombia?

Where’s the better choice for planting Plan B flags—Panama or Colombia?

The answer depends on your goals and the flag you’d like to plant.

Are you looking to open an offshore bank account or to establish backup residency?

Do you want to make a real estate investment or start a business?

Here’s a comparison of these two jurisdictions, both top options but for different reasons, to help you decide…


A view of Panama City skyline
Adobe Stock/Mariana Ianovska

Panama Pros

  • World’s top offshore haven
  • Bona fide tax haven, taxing income on a jurisdictional basis
  • Uses U.S. dollar, meaning no currency exchange risk
  • Specific countries visa program (which can mean a work permit)
  • Best infrastructure in Central America
  • Strong economy
  • Quality, affordable health care
  • Diverse lifestyle options, including Pacific and Caribbean coasts, islands, mountains, and Panama City
  • Top choice for entrepreneurs
  • Super accessible, with many direct flights daily to and from North America and Europe

Panama Cons

  • Hot and humid in Panama City and on coasts
  • Traffic congestion in Panama City
  • Poor service standards
  • Panama City not suitable for walking
  • Strong mañana attitude


Cityscape, Cartagena de Indias, Colombia.
Adobe Stock/elnavegante

Colombia Pros

  • Top investment haven with enormous upside
  • Best health care in Latin America at a cost that can be 90% less than U.S. costs for comparable care
  • Strong economy
  • Welcoming locals
  • First-world, even luxury lifestyle options
  • Working hard to compete for foreign attention
  • Easiest and cheapest residency option in the world today; pensioner option requires income of only US$800 per month at today’s exchange rate… and you can process the application yourself
  • Many lifestyle options on offer, including sophisticated, Euro-chic city living, Caribbean beach, world-class colonial towns, rural landscapes, and the finca lifestyle
  • South America rather than Central America… and there is a difference

Colombia Cons

  • Necessary to learn some Spanish
  • Less existing expat infrastructure
  • Not a low-tax jurisdiction
  • Air pollution in Medellín and Bogotá

In the context of the issues most important to the would-be investor or retiree, here’s how these two countries stack up against each other…

Comparing Colombia And Panama

In the context of the issues most important to the would-be investor or retiree, here’s how these two countries stack up against each other…

Cost Of Living

Remember the exchange rate. Right now, thanks to the U.S. dollar’s continued strength versus the Colombian peso, Colombia can be the greater bargain by far.

Cost Of Real Estate

Again, thanks to the exchange rate, real estate in Colombia can be 60%+ cheaper, apples to apples.

Also note that, while it’s possible to own luxury in both Medellín and Panama City, Panama City luxury now comes at a much higher cost.


Way more comfortable in Medellín than Panama City, for example, but both countries offer many different climates.

Quality Of Life

What are you looking for? Both countries offer city, coastal, mountain, and rural choices.

Ease Of Residency

Colombia is perhaps the world’s easiest place to establish residency right now. No lawyer is required, you don’t need to produce a background check, and we’ve known people to go through the process in one hour.

On the other hand, Panama’s residency process requires using an attorney and at least two trips to the country unless you’re actually living there after you submit your initial application (you get a temporary stamp in your passport upon submittal of your application).

Banking And Doing Business

Panama is the clear winner, thanks to:

  • Banking infrastructure
  • Lack of exchange controls
  • No currency risk
  • Much more English spoken
  • Available labor pool and possibility to acquire work permits for non-local labor


A tie.


Panama is the screaming champion on this score, a true tax haven, while Colombia qualifies as a high-tax jurisdiction, with, for example, a corporate tax rate as high as 35%.

However, if you’re a retiree making a move with retirement income, you probably don’t have to worry about this. For the retiree, a move to a new country should be a tax-neutral event (except for Roth IRA distributions which may be taxed in some countries).

Health Care

Top-quality, international-standard care is available in Panama City. Outside the capital, the standard of care in this country falls.

Eight of the top 35 hospitals in all Latin America are in Medellín. Other cities in Colombia have similarly top-standard facilities.

Ease Of Settling In

Panama City is a kind of halfway house for expats, a very easy and comfortable first step overseas. Medellín is an emerging expat destination, though more discovered and therefore easier to navigate as an expat or foreign retiree all the time.

Bottom line, though, Colombia is more challenging in this regard unless you speak Spanish.

Which Is Right For You?

Depends on your circumstances, personal preferences, and agendas…

I say: Why choose?

Spread your life around a little. Live or invest in both!

Lief Simon