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Comparing Panama And Colombia: Living, Retiring, And Investing

11 Apr
Panama and Colombia split image. Medellin Botero sculpture garden and Bay of Panama

Comparing Panama And Colombia: Living, Retiring, And Investing

Time To Double Down In Medellín, Colombia

While both have so much to offer right now, Panama and Colombia couldn’t be more different.

I’ve been alerting you to the opportunities on offer in these countries for years. I first recommended Panama for retirement and investment 20 years ago, and I began heartily endorsing Colombia, specifically Medellín, a decade ago.

How do these heavy-hitting overseas havens stack up against each other?

Here’s how I’d lay this out…

Panama Pros

  • World’s top offshore haven
  • Bona fide tax haven, taxing income on a jurisdictional basis
  • Uses U.S. dollar
  • 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

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
  • Politically stable
  • Strong economy
  • Welcoming locals
  • First-world, even luxury lifestyles
  • Working hard to compete for foreign attention
  • Some of the easiest and cheapest residency options in the world today; the pensioner option requires income of only US$820 per month at today’s exchange rate… and, unlike in Panama, where an attorney is required by law, 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

Colombia Cons

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

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, 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.

Climate

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

Again, Colombia today is one of the world’s easiest places to establish residency. No lawyer is required, and I’ve known people to go through the process in one hour.

On the other hand, Panama’s Specific Countries visa program is the best option in the world today if you want to work.

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

Infrastructure

A tie.

Taxes

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 33%.

However, if you’re a retiree making a move with retirement income, you probably don’t have to care about this.

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. Spend money and time in both… like I do.

Lief Simon