Moving to Panama as an American
The US-citizen's guide to Panama — the residency route that fits (Pensionado, Friendly Nations, or investor), why your foreign income is tax-free, the famous retiree discounts, and how far your dollars go.
Build your Plan B for Panama
A personalized plan for your situation: which visa you qualify for, your US-citizen tax outlook, a budget in dollars, and a 90-day move timeline.
Cost of living vs the US
Bottom linePanama runs about 33% cheaper than the US, with rent roughly 41% lower (Numbeo, May 2026). And because Panama uses the US dollar, there's no exchange-rate risk on your savings or income. Panama City is the priciest spot; mountain towns like Boquete and beach areas cost less. Retirees also get Pensionado discounts on top.
| Category | Panama vs the US |
|---|---|
| Overall cost of living | ≈ 33% cheaper (Numbeo, May 2026) |
| Rent | ≈ 41% cheaper on average |
| Currency | The US dollar — no FX risk |
| Retiree extra | Pensionado discounts of 15–50% (Law 6) |
Residency options for US citizens
Key for AmericansKey insightRetirees have it easiest: the Pensionado grants permanent residency on a $1,000/month pension and unlocks Panama's famous discounts. Working-age Americans use the Friendly Nations Visa (the US is on the list) — which since 2021 needs a real economic tie — or the Qualified Investor route for a fast track.
| Visa | Best for (Americans) | Requirement | Note |
|---|---|---|---|
| Pensionado | Retirees | $1,000/mo lifetime pension (incl. Social Security) | Permanent residency + discounts |
| Friendly Nations | Working-age movers | $200k property or deposit, or a Panama job | Temporary → PR after ~2 yrs |
| Qualified Investor | Investors | $300k real estate (or $500k securities) | Direct permanent residency (~30 days) |
Pensionado perksPanama's Pensionado is the gold standard of retiree visas: under Law 6 it grants discounts of roughly 15–50% on healthcare, restaurants, entertainment, domestic flights, and more — for life. US Social Security counts as the qualifying pension.
- Pensionado requires keeping a presence — spend at least 30 days a year in Panama
- Friendly Nations tightened in 2021: a $200k property/deposit or a Panamanian employment contract is now required
- Citizenship is possible after 5 years of permanent residency
What it means for your US taxes
Key for AmericansRead this firstPanama has one of the cleanest territorial tax systems in the world: if you earn your money outside Panama — a US pension, Social Security, dividends, or a remote salary — Panama doesn't tax it at all. There's no US–Panama tax treaty, but with nothing taxed locally there's nothing to double-tax. You still file with the IRS every year, in US dollars (Panama's currency).
- No treaty means no Social Security exemption and no tie-breaker rules — you rely on the FEIE and Foreign Tax Credit
- Because Panama won't tax your US income, retirees generally owe US tax on pensions as normal (the FEIE doesn't cover pensions)
- You still file FBAR and FATCA on foreign accounts over $10k — use a US-expat-specialized preparer
Healthcare vs the US
Key insightPanama City and David have high-quality private hospitals — some affiliated with US institutions — at a fraction of US prices, with many English-speaking, US-trained doctors. There's a public system (CSS) too, and Pensionado retirees get Law 6 discounts (typically 15–20%) on medical care on top.
Getting there & first steps
Key insightPanama is close and easy — direct flights run about 3 hours from Miami and 5 from the East Coast, into Tocumen (PTY), Copa Airlines' hub. Everything is priced in US dollars. Once your residency is approved you'll get a Panamanian ID (cédula E) and open a local bank account.
Panama for Americans: pros & cons
Pros
- Uses the US dollar — no exchange-rate risk on your savings or income
- Territorial tax — foreign income (pension, Social Security, remote salary) isn't taxed
- The Pensionado grants permanent residency on a $1,000/mo pension, plus lifelong discounts
- High-quality, affordable private healthcare with English-speaking doctors
- 3–5 hour flights and a major hub airport (Copa/Tocumen)
Cons
- No US–Panama tax treaty or totalization agreement
- The Friendly Nations Visa now needs $200k (property/deposit) or a local job
- Panama City is hot and humid year-round, and car-oriented
- Outside the city and expat hubs, English and infrastructure thin out
- You still file US taxes every year on worldwide income
Where Americans settle
Detailed, data-backed guides for the destinations Americans choose most.
Ready to make Panama your Plan B?
Turn this into a personalized plan: your eligible visa, US-tax outlook, a dollar budget, and a step-by-step 90-day timeline.
Verified against official sources. Every figure on this page is checked against primary US (IRS, State Dept., SSA) and Portuguese (AIMA, Autoridade Tributária) government sources and dated. Maintained by the Plan B Atlas editorial team.
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