I want to be the first to say to the huddled masses who want to leave the United States after the Obama victory that you are welcome to join us in Boquete Panama. It might be helpful to understand some differences between the United States and Panama. Since I have no interest in selling you anything, you might find my perspective a contrast to the many people hustling Panama online. This post is intentionally negative, but it is also intentionally a contrast.

Panama is not part of the United States. I feel compelled to say that because I have read so many comments and questions on various Yahoo groups from people who are looking to immigrate here with families and find work in Panama. You will need a passport to enter Panama. Although English is widely spoken among educated Panamanians, the official language here is Spanish and you will need to speak Spanish to get a job or function efficiently almost anyplace outside of immigrant enclaves like Boquete.

As an American passport holder you can enter Panama as a tourist for six months and recycle that entry in one day by visiting Costa Rica. That policy can be changed and has been as little as 30 days in the past for tourists. Tourists cannot legally work in Panama. If you work as a tourist and are caught you will be fined and possibly deported. Tourists and retirees cannot work here without a work permit from the government and tourists and people with retirement visas cannot legally get work permits.

The laws are different here,  the government can create or change laws in days and they are in force as soon as recorded. Recent events have shown, when a law is very unpopular the people attempt to shut the country down until the law is repealed, they have succeeded several times recently.

Immigrants often learn the legal system is of no value to them, there are many corrupt lawyers and forget a malpractice suit, a lawyer will not sue another lawyer. Even if you can find one to file a lawsuit, he with the most wealth or best political connections will likely prevail in the lawsuit.

Many people buy property here. Too often people buy Right of Possession (ROP) property, only to discover others have claims on the land. The buyers might discover they own nothing but a document after a legal battle. You need a lawyer to make an intelligent purchase and need to hope the lawyer is honest. Just because the lawyer speaks English does not make them honest. You can buy titled property safely, most of the time but need to check on liens, tax liabilities etc before buying. There are no escrow services here and although I have heard of people selling title insurance I have never actually seen anyone benefit from Panama title insurance.

We have many English-speaking carpetbaggers here. Some of these people fled their criminal past in other countries and came to Panama because the laws on White Collar crimes like fraud are weak at best. You can buy a house from the honest Gringo and find out he never owned it. You will have little recourse and may have lost your investment.

If you are from the USA you will find your money is good here. The currency of Panama is the Balboa, but the Balboa only exists as coins, the paper currency here is the US dollar. That is convenient,  but if you believe the dollar is doomed, so is the Balboa. Unless the government decides to really upset the economy and change the currency; which they could do.

Domestic and farm labor is available and appears to be very inexpensive. However the labor laws in Panama are 99% skewed to the worker. An employee has Social Security of which you must pay a percentage. Employees are legally entitled to a month vacation each year and you need to pay decimo, a 13th month of wages each year. In essence an employee works eleven months and is paid for thirteen. You also need to pay severance after ninety days of employment, terminating an employee can be expensive . If you hire someone for $2 an hour, the real cost is closer to $2.80 without factoring in severance.

If you are fleeing socialism, it is here already. In Panama the government owns the canal, a couple of banks, half of Cable & Wireless, a telephone company, a part of the electric utility, the Colon Free Trade Zone, part of the coast to coast oil pipeline and probably a lot more. Social Security provides not only a meager retirement income but medical care also. Your medicare, medicaid and with some exceptions your health insurance will not work here. If you have Tricare you can get reimbursed, but most US health insurance does not work here in Panama.

Despite any rumors to the contrary we have taxes in Panama. There is a 7% VAT on most purchases other than food, medicine and agricultural goods. There are import duties on almost everything and transporting goods from overseas is expensive. There are property taxes and although there are some exonerations, you need to be sure you actually have them or your tax bills will grow with penalties and interest. The liability might first be discovered when you try to sell your property. If you do work, there are also income taxes and Social Security taxes.

You can start a business and as long as you do not work in your own business unless you get a work permit. You can profit from your enterprise as a shareholder but if government inspectors find you working expect a hefty fine.

With all of the negative said, if you are careful and do not check your brains at the airport Panama is wonderful. Panama is a great place to live. I have been here more than six years and love it but it does require a reset of expectations and not everyone is willing to make the necessary changes. Too many people come and leave within two years, some with less than they had when they arrived, that is my reason for the splash of ice water.  This was a counterbalance to the sales pitches that are on most internet sites about Panama. Consider the changes you need to make to adjust to a new country, visit, rent and see if it for you before you sell your assets and buy your family a one way ticket.