How to Buy Real Estate in Panama

Are escrow companies commonly used for property transactions?
Is it safe to buy shares of a Panamanian corporation which holds title to property in Panama?
If I am a US citizen, can I use my IRA or 401K money to buy property in Panama?
Is it legal to buy options on property in Panama?
Are options available on property in Panama?
Do many sellers in Panama offer owner-financing options or leases with purchase options?
What is the liability for real estate investors that "flip" (buy & immediately sell) properties?

Are escrow companies commonly used for property transactions?
In Panama, normally the down payments are NOT placed in escrow.  This is why it is important to have an attorney represent you to be sure you are dealing with the rightful owner.   The final payment can be placed in escrow through a bank.  No other type of escrow companies are regulated in Panama.

Is it safe to buy shares of a Panamanian corporation which holds title to property in Panama?
As long as proper due diligence is done on the corporation and a proper title search is done on the property held by the corporation, then it is generally safe to buy property this way in Panama. It is important to enlist a qualified attorney to handle the due diligence and ensure that the corporation does not have any pending debt or liability (other than that established in the contract) and indemnify the buyer from that liability. The attorney will ensure that the seller is responsible for any liability for previous actions of the corporation and/or its directors, and that you, the buyer, is purchasing 100% of the corporation’s shares as well as 100% of the property title.

If I am a US citizen, can I use my IRA or 401K money to buy property in Panama?
Yes. There are several financial companies in the United States who offer services that facilitate the use of your IRA or 401K funds, which you can then use to invest in property anywhere in the world.

Learn More: You can find more information about buying property with IRA funds in our Panama: The Owner’s Manual and in our Special Reports section at www.PanamaInsider.com.

Is it legal to buy options on property in Panama?
Yes, but it is an uncommon practice and most sellers in Panama do not understand the concept.

Are options available on property in Panama?
Yes, but because most sellers in Panama do not understand the concept, it requires that you educate them so that they agree to offer you an option to purchase their property.

Do many sellers in Panama offer owner-financing options or leases with purchase options?
Leases with purchase options are common in Panama, although most sellers are more interested in selling altogether. If you go the lease-option route, please note that rental or lease contracts must be registered with the MIVI (Ministerio de Vivienda), which is the "Ministry of Housing" in order for the contract to be legal in Panama.

What is the liability for real estate investors that "flip" (buy & immediately sell) properties?
In truth, the liability for real estate investors in Panama is limited. The primary liability is capital gains taxes, which some people avoid through the use of Panamanian corporations. As long as you deliver what is promised, according to the terms of the buy/sell contract, buying and selling property in Panama is virtually liability free.