Panama City is an exciting place with a lot to offer. Like any city, it has advantages and disadvantages.
Whether you are looking to move to Panama City as an expat to work or do business or are considering retiring here, our top 14 pros and cons of living in Panama City are a perfect place to start.
The pros of living in Panama City
1. The cost of living is relatively low
The cost of living in Panama City is much lower than in many other big cities in North America or Europe.
Housing and utilities are much more affordable, making it easier for expats living on a limited budget to enjoy all that Panama City offers.
Dining out or grocery shopping can be much less costly than you are used to, especially if you shop at the local markets and eat some local food.
You can rent a two-bedroom condo with ocean or city views starting at $1,200 a month. Compare that to Miami, New York, Toronto, London, Amsterdam, Madrid, or Sydney.
Aside from rent, food is usually your next most significant expense.
You will find great restaurants all over the city for you foodies out there for a price that will not break the bank. Panama typical restaurants are an excellent place for a quick lunch and cost you as little as $5.
If you are not brand specific when shopping for groceries, you will find it much cheaper here.
If you must have the brand you have used for years, and it is an imported product, you will likely pay more than you did at home.
Stick to buying your fruits and veggies from local vendors and outside markets, and you will save a ton.
Factor in $32 a month for unlimited data cell service, $40 a month for 200 meg internet, $5 for a tank of propane (used for cooking and hot water in many places), 35 cents to jump on the metro, of $2 for an uber almost anywhere downtown.
2. There is a large expat community in Panama City
One of the best things about living in Panama City is its vibrant, multicultural atmosphere. With people from all over the world living in the city, there is always something to do and see here.
Whether you want to check out local festivals, explore the local art scene, or enjoy a variety of international cuisines, you will have no shortage of options in Panama City.
This international atmosphere makes for a very diverse and exciting city. You can experience new cultures, try different foods, and make lasting connections with people worldwide.
When I lived in Panama City, I had a condo in the city's center, just off Calle 50. There were people from the USA, Canada, Great Britain, Venezuela, New Zealand, Spain, and Germany in my building. And we all intermixed well with the local Panamanians who lived there.
3. The weather is great year-round
The weather in Panama City is one of its biggest draws for expats living here.
Panama City is known for its warm weather and tropical climate. Daytime highs are in the low 30's C., and nighttime lows are in the low 20's C. Throughout the year, you can expect to experience plenty of sunshine and moderate rainfall.
The weather in Panama City tends to vary depending on the time of year, with the summer months (Mid-December – Mid April) being hotter and dryer than the rainy season (May to November).
However, you can expect to enjoy lots of clear skies and comfortable weather all year round in this beautiful coastal city.
Typically, the day starts with sunshine in the rainy season, and you may get a heavy late afternoon shower.
If you are looking for constant sunshine and warm temperatures all year long, Panama City is the place.
4. There are many things to do and see in Panama City
Panama City is the capital of Panama and its largest city, with a population of over 1.8 million people. The city is a major financial center and a hub for international trade.
The city is home to several iconic landmarks, including the Panama Canal and the Panama Canal Museum.
You can also explore the Old Town district, Casco Viejo, full of colonial-era buildings and traditions.
For a taste of Panama's natural beauty, head to the nearby rainforest or take a boat ride through the Panama Canal.
You will enjoy Panama City's vibrant nightlife, with various bars and clubs to choose from.
Whether you're looking to experience the city's culture or simply want to relax on its beautiful beaches, Panama City has something for everyone.
5. Public transportation is efficient and inexpensive
One of the most popular forms of public transportation in Panama City is the metro system. The city's metro is fast, efficient, and reliable, with multiple lines crisscrossing the city from north to south and east to west.
Additionally, Panama City's metro stations are well-connected to major bus routes, making it easy for commuters to connect between different types of transportation.
The buses offer more flexible routes than the metro system, making them suitable for local trips or shorter journeys.
Many people also prefer riding on these buses due to their lower cost than other forms of transit like taxis or ride-sharing apps. The price of the metro or bus in Panama City starts at 35 cents.
6. The food is excellent
The food and restaurants in Panama City are a true delight for foodies and residents alike.
With a wide variety of restaurants serving everything from local to classic South American specialties to International cuisine, there is something to satisfy every palate.
Some of the most popular restaurants in Panama City include El Trapiche, which has served up delicious Panamanian cuisine since 1983.
Restaurante El Caribe is the best Afro-Caribbean cuisine you can get.
Mercado de Mariscos, the city's fish market, has over a dozen restaurants serving up the day's fresh catch.
My favorite restaurant, open for breakfast and lunch, is Michael's in Costa del Este. You will not be disappointed.
You'll find it all in Panama City, whether you're in the mood for tasty tacos, decadent desserts, fresh seafood, or a spicy curry.
7. There is no income tax on foreign earned income in Panama
Panama is one of about a dozen countries globally with a “territorial tax” system. This is especially great news for those who are moving here from a “taxation by residency” tax country.
In simple terms, Panama only charges income tax to its citizens or permanent residents on Panama sourced income. What does this mean to you?
If your current passport country is a “taxation by residency” country, like Canada, UK, Spain, Germany, Australia, in fact, most counties, and you move to Panama and work remotely, or an online business that sells a product or service outside of Panama, that income you are earning will not be taxed by Panama.
If you are no longer a resident in your home country, you may have no tax obligations.
You must set this up correctly and file the proper paperwork in your home country to declare no residency for tax purposes there. Each country is different, and I am certainly not a tax accountant and can provide no advice on how to do this.
Sorry US citizens, you are out of luck, as the United States and Eritrea are currently the only countries that tax their citizens wherever they live. You may want to look at the US foreign resident tax exemption for US citizens, which could give you a break up to about $110,000.
8. Panamanians are generally friendly and welcoming to foreigners
The people of Panama are known for being friendly and welcoming to foreigners. Panama City is often touted as one of the most bustling and exciting cities in Latin America.
Whether you are living and working in Panama City or have retired here, it is easy to feel at home due to the warm hospitality typical of Panamanians.
Whether you're dining at one of Panama's famous restaurants, exploring historic colonial neighborhoods, or admiring the scenic mountain vistas, you can always receive a friendly greeting from locals who are eager to welcome foreigners into their country.
The cons of living in Panama City
9. The traffic can be congested
Panama City is known for its traffic congestion and crowded streets. Whether you are driving on the highway or navigating downtown, traffic in this city moves at a frustratingly slow pace.
One of the main reasons is the high traffic volume and not enough roadways.
This city is home to a growing population, which means more cars, trucks, and buses on the road than ever before.
Additionally, traffic patterns have become more unpredictable due to ongoing construction projects in different city areas.
And while traffic lights and stop signs seem like standard measures to regulate traffic flow, these are often poorly timed or constructed, contributing to delays and bottlenecks.
10. For some, the climate is too hot and humid
As we have already mentioned, Panama City has a hot and humid climate. The average daily temperature is around 32 degrees Celcius, and humidity levels can reach 90%. This climate is perfect for growing tropical plants and fruits, but it can be uncomfortable for people who are not used to it.
Panama City experiences a wet season from May to November, during which rains can bring relief from the heat.
However, the humidity levels can still be relatively high during this time.
If you're planning to live in Panama City, be sure you understand the climate and that the heat and humidity are acceptable to you. It is a personal preference. Some like it hot, some do not.
11. Most locals speak only Spanish
The official language of Panama is Spanish.
In the healthcare system, most doctors will speak some English.
Be prepared to be served in Spanish, legal documents will be in Spanish, and most news and radio are in Spanish.
I would estimate about 5% of the Panamanian population speaks English at a conversation level, and about 5% know some English.
You do not have to be fluent in Spanish to live here. Just learn the basic greetings, be polite, learn a lot of words, know what things are when you are shopping, and keep Google translate open on your phone.
12. The city can be very crowded
Panama City is a bustling and crowded metropolis, with people from all walks of life jostling for space on the overcrowded streets and sidewalks.
Being one of the major economic hubs in Central America, Panama City attracts a large number of workers from all over the region.
In addition, its tropical location near the equator means that there are plenty of tourists coming through every year, eager to experience its vibrant culture and stunning natural beauty.
13. The infrastructure is not the best
With so many people living and working here, the infrastructure in the city must be adequate to meet the needs of residents and businesses alike. Unfortunately, many people would argue that this is not the case, as infrastructure in Panama City tends to be poor and unreliable.
Whether we are talking about streets and sidewalks, utilities, or other essential services, most people would agree that the infrastructure in Panama City leaves a lot to be desired. But certainly, it is better than most cities in Central America.
However, over the last 10 years that I have been here, I have seen vast improvements in infrastructure in Panama City and around the country, so progress is being made.
14. Panama loves to party
Panama City is known for its lively party culture, and many locals flock to its bars, nightclubs, and festivals to let loose and have a good time. Or, they just stay at home and invite 20 or so people over and make their party.
While some people enjoy this aspect of Panama City's culture, others are not as enthusiastic about it. These individuals often point out that Panama City's nightlife can be noisy and chaotic, with loud music, crowds of people, and lots of drinking throughout the city.
They also argue that Panama City's popular club scene creates public intoxication, crime, and traffic problems.
Despite these downsides, Panama City's reputation as a great place to party shows no signs of slowing down soon. After all, Panamanians love to dance the night away! Regardless of what others may think, Panama City truly is an incredible place to celebrate life.
Final thoughts on living in Panama City
These pros and cons of living in Panama City can offer great insight for someone looking to move there.
Whether you're looking for a lower cost of living, an expat community, or a place to retire with all the amenities you could want, Panama City may be your place. So if you're considering living in Panama City as an expat, go for it! You won't be disappointed.