Panama vs Costa Rica is the big question for people considering Central America. These are two of the most popular countries in the world. Costa Rica is a long-established expat resort. However, Panama is rapidly catching up. Let’s take a look at both countries strengths and weaknesses.
Which offers the best choice for expats? As neighboring countries, they share a lot in common. But they have more differences than you might imagine.
Panama Vs Costa Rica: Retirement
Panama’s pensionado visa is an attractive option for expats. You can qualify for this retirement visa by proving a guaranteed income. This has to beat least US$1,000 per month. Additionally, you need to show another US$250 for your spouse and each dependent.
Panama is working hard to attract foreigners. The country offers generous benefits with the pensionado visa. You’re eligible for a one-off exemption on import duties for household goods. This is good for up to the US$10,000. Retirees are eligible for special discounts. 50% off entertainment, 25% off airline tickets, 25% off at restaurants, 10% off prescription medicines, and 25% off utility bills.
Like Panama, Costa Rica has a retirement visa requiring a monthly income of at least US$1,000 per month. One of the major benefits of the Costa Rican pensionado visa is for drivers. You’re allowed to import a new vehicle every 5 years with no import duties. While this may not sound like much, import duties in Costa Rica are high. They can cost up to 89% of the total value of a vehicle.
A pensionado visa in Costa Rica only requires you to spend one day per year in the country. This makes it ideal for snowbirds. Furthermore, ou can apply for permanent residency. You only need to hold the pensionado visa for three years.
Comparing The Cost Of Living
First of all, the cost of living in Panama has increased in recent years. However, it remains a bargain compared with the States. You can find plenty of local produce, which will save you money and help you to eat more healthily. It’s not uncommon for people moving to Panama to lose weight. Certainly if they don’t eat too much arroz con pollo.
Public transport is cheap: Tickets for Panama City’s modern metro cost 35 cents per journey. Buses are 25 cents per journey. Traveling longer distances by bus is cheap and Panama has an extensive bus network. Taxis are inexpensive. But be warned. Taxi drivers sometimes charge tourists extra. Also Uber is becoming a popular alternative.
Utility bills and gasoline prices are lower than in the States. You’ll need to budget for the air conditioning, which can be expensive to run. Find a more detailed breakdown on cost of living in Panama here.
Costa Rica
Bear in mind, in Costa Rica imported goods are eye-wateringly expensive. The high import duties make everything that isn’t local expensive. If you’re looking to live on a budget in Costa Rica, you’ll have to embrace Costa Rican living. Luckily, the fresh, local fruits and vegetables are cheap.
Costa Rica produces a range of organic food and drink to feast on. Public transport and taxis are cheap, as is entertainment. Restaurants cover all price ranges and styles. While cheaper than the United States, you’ll still pay high prices for fine dining.
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Panama Vs Costa Rica Access
Panama is the “Hub of the Americas” due to its many international travel connections. Tocumen International Airport has flights across the world. There are lots of daily flights to many cities Stateside. It’s possible to drive across the border to Costa Rica but the border with Colombia is impassable by car.
Flights to Costa Rica are more limited than Panama. You can find daily flights from there to both the United States and Europe. There are just two major airports.
Panama Vs Costa Rica Banking
Opening a bank account in Panama is fairly easy. It helps if you speak Spanish or have someone who can speak Spanish on your behalf. In general, you will need to provide different proofs of ID and proof of a job or income such as a pension. Banks regularly ask this from foreigners. Provide all the documentation can get everything setup in one visit.
FATCA regulations mean banking is more difficult for U.S. citizens than anyone else. If one bank refuses you just try another, you will get an account eventually. No banks stand out for having excellent customer service.
Foreigners can open a bank account in Costa Rica, too. All banks will require a passport. Most will need a recommendation letter from your bank in the States. Additionally, you will need a recommendation letter from someone in Costa Rica. Again, banks know how to deal with expats and will be able to assist you.
How Do The Two Countries Compare For Health Care?
Panama has some of the best and most modern hospitals in Central and South America. Many hospitals in Panama City are at the cutting edge of medical technology.
Prices are far lower than you would pay in the States and most doctors speak English. In fact, many doctors went to school and trained in the Canada or the United States.
One drawback to health care in Panama is the lack of options in rural areas. Panama City and David (close to the Costa Rica border) have the monopoly on modern hospitals. If you are someone who may need emergency treatment from time to time, this needs to taken into account.
Costa Rica Health Care
Costa Rica has universal health care available to all citizens and residents. However most expats opt for private health care. This is some of the best in the world and a real bargain by U.S. standards. Costa Rica also excels in private dental treatments.
Dental tourism is a big-money industry. People arrive just to take advantage of the cutting-edge procedures at discount prices.
How much cheaper are medical and dental treatments in Costa Rica?
Some U.S. companies provide first-class flights to Costa Rica. This includes treatment with recovery in a five-star hotel. This still works out cheaper than having the treatment in the States. A private medical plan in Costa Rica costs between US$75 and US$200 per month.
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Panama Vs Costa Rica Beaches
Panama has miles and miles of excellent beaches on both its Pacific and Caribbean coasts. The tropical waters are warm all year. On the Caribbean side the water is crystal clear. You can watch colorful tropical fish swimming about your feet. Bocas del Toro and Guna Yala are famous locations but you can find plenty of other, less crowded beaches.
The Pacific coast beaches are a mixture of golden yellow and black volcanic sand. The beach town of Coronado is where Panama City residents go for their weekends out of the city. It has many idyllic beaches but can get crowded, especially on major holidays. Further down the coast you can find miles of nearly empty beaches. Beaches on both coasts provide options for world-class surfing and scuba diving. There is also a chance for swimming, windsurfing, and sailing.
Costa Rica has some of the most stunning beaches in the world. The beach lifestyle is a huge part of Costa Rica’s appeal, and one of the reasons it has attracted so many tourists. Costa Rica has miles of white sand beaches and turquoise waters. Reliable surf breaks can stretch along both coasts. There are more sheltered bays for swimming and snorkeling.
A Guide To City Living In Both Countries
Panama City is a modern, cosmopolitan city that’s growing at a terrific pace. Panama City has access to modern health care facilities, restaurants, and shopping malls. Besides, there is a modern metro system to get around town.
Close to the city you have the Gamboa Rainforest Resort. The thick jungle feels like a world away from the busy capital. Panama City has real estate options for every budget and enough going on for you to never get bored.
In the west of Panama you have David. While not as big as Panama City, David has quality health care options at its hospital. There are also as plenty of local businesses. These cater to the needs of the regions many expats. Another possible benefit is the weather. Temperatures are slightly cooler than Panama City if you live in the nearby mountains.
Costa Rica
Costa Rica doesn’t have a big city to compare with Panama City, but it has a better selection of mountain towns to live in. The capital, San José, is at an elevation of 1,172 meters. Therefore perfect for those who prefer a cooler, springlike climate.
The traffic in San José is legendary. As a result, most expats like to live in near Avenida Central. Here, you can find things to do within walking distance. San José has museums, theaters, and fine dining and offers a style of living not available in Panama.
Cost Rica has a range of beach towns and small colonial towns that are better preserved than in Panama. Consequently, most expats looking for historical living by the sea choose Costa Rica.
Comparing The Expat Communities
Panama has expat communities dotted throughout the country. Panama City and nearby Coronado are popular. You will also find expats situated in Las Tablas, David, and Boquete. Many foreigners have opened small businesses. These often serve as informal meeting points for the local expats.
Costa Rica has been a popular expat destination for at least 50 years. As a result, the expat groups are well established. It’s not only American citizens who come to Costa Rica.
The expat community here represents many different countries. The main expat locations are Arenal, which is the lake town by the Arenal Volcano. Finally, the Southern Zone, near to Panama, on the Pacific coast is also popular.
What About Safety?
Panama is generally a safe place to live. Like everywhere, it has places that are best avoided. However most areas are fine. The popular expat locations have low crime rates. As a result, in day-to-day living you’re unlikely to feel in any danger. Panama has a strong police presence. Asa result, it’s not unusual to see police checkpoints on the side of the road. In tourist areas, take the usual precautions to avoid pickpockets or muggers.
Costa Rica is not as safe as Panama, but if you live in the expat areas you’re unlikely to run into much crime. Public transport is safe and the big cities are well policed. Like anywhere, bag snatchings and other petty crimes do occur. Costa Rican roads are not good for driving at night; hijackings are not unheard of along remote roads. Therefore, it’s unwise to drive on unfamiliar roads after dark.
Panama Vs Costa Rica Weather
Panama has a tropical climate and the weather is hot all year. On low-lying ground the temperature is reliable. Almost every day will be above 73 degrees Fahrenheit. Panama is close to the equator, meaning the weather does not change much.
Panama has two seasons. The dry season lasts from December to April and the rest of the year is the rainy season. The rainy season peaks in October and November. During this time you can expect heavy downpours every day. In the mountain regions, the temperature is cooler. You can live comfortably without air conditioning. Panama is not affected by extreme weather, and hurricanes are almost unheard of.
Costa Rica’s is a subtropical climate, meaning year-round hot weather. The dry season lasts between December and April and the rest of the year is the rainy season. During this time you can expect a downpour most days. Mountain living is more accesible in Costa Rica. People looking to live in a cooler climate have more options here. The temperatures closer to sea level are warm to hot all year. Generally, the average heights are around 80 degrees.
Panama Vs Costa Rica Economy and Taxes
Panama is one of the world’s most famous tax havens. The country is beloved by big corporations and savvy investors alike. A major benefit for expats is foreign residents only pay tax on money earned in Panama. Your pension or Social Security is tax-free.
Panama has a range of incentives aimed at attracting overseas investment. These include tax breaks for opening a tourism business. You can also find tax-free offerings for retirees.
Foreign earnings are tax-free in Costa Rica. However, the range of tax breaks and incentives is not as good as in Panama. You’ll generally pay more in Costa Rica on a day-to-day basis. This is especially true if you’re looking to open a business.
Where Is Best For Starting A Business?
Panama is one of the best places in the world to start a business. Income made outside of Panama is not taxed and income-tax rates are low. The banking industry is solid and the government is stable. English is more widely spoken in Panama than in a lot of Central and South America. Foreigners cannot open a retail business. Foreigners must wait ten years before they can sell real estate or insurance.
Costa Rica is popular with digital nomads. They are usually attracted by the beach lifestyle on offer. Costa Rica is one of the world’s top eco-tourism hot spots. However, import/export businesses are difficult in Costa Rica. This is a result of the high import taxes. Costa Rica has a fair amount of bureaucracy and red tape. Certainly the country isn’t the easiest place to do business. Also, remember you won’t actually be able to work in your business. This would be taking a job way from a Costa Rican.
Infrastructure And Internet Speeds
Panama is investing a huge amount into infrastructure. A visit to Panama City will leave you battling against roadworks. Tocumen International Airport was expanded. The city-wide metro network is being expanded. Plus, new housing and apartments are going up across town. Panama City has low-cost high-speed internet available. Power and internet are reliable throughout the country.
The infrastructure in Costa Rica is in dire need of upgrading. As a result, many of the roads are in dreadful condition. If you’re looking to drive long distances or live in the countryside, an SUV is a must. Costa Rica has high-speed internet available in the big cities. In the countryside the internet is slow and unreliable. Worse, power outages occur most weeks.
Which Country Has The Best Education System?
Public schooling in Panama is poor considering the country’s resources. Public schools are free, and education is compulsory until 14 years of age. Panama benefits from some quality schools. These schools are only in and around Panama City. While cheaper than private schools in the States, they’re still expensive. Furthermore, some schools require early enrolment.
Education in Costa Rica is some of the best in Central America. The government has invested in the public system and it shows. As a country, Costa Rica has a progressive outlook and its education system reflects this. Hence children learning the importance of looking after the environment. There are classes on future-oriented skills. Generally this includes computer coding and programming. As a result of the quality education lots of young people now speak English. English speaking schools are reachable throughout the country. San José has the majority of these schools but there are some near most of the major expat spots.
Choose What’s Right For You
Panama vs Costa Rica is an interesting battle. Both Panama and Costa Rica have their strengths and weaknesses. Consequently, which country is best for you will depend on your situation. As with any move overseas, take time to sit down and figure out what’s important to you.
Above all, make sure you are clear about exactly what you want. An evening spent working out exactly what you want will pay dividends.
