Why Live In Boquete?

By Joseph Denham, Nov 2006

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Boquete is located in Panama’s mountainous Chiriqui region, It’s quiet, unspoiled, uncrowded. with plenty of mountains, rivers and waterfalls. The name of Boquete comes from a physical configuration on the entrance of the district formed by a great opening existing between mountains which sets the place to the “Valley of Flowers and Eternal Spring”. The climate in Boquete is ideal, springlike weather all year-round with reasonable daytime temperatures, cool breezes, and chilly nights. In Boquete you will see almost on a daily basis a precipitation phenomenon called “Bajareque” which is a slight mist along with north winds that barely gets you wet because of the fine and delicate singular drops which becomes the author of the marvelous rainbows that forms decorating Boquete’s skies every afternoon. Lush green hills and great masses of red and purple flowers. This is a coffee country, set in cloud forest surroundings at an altitude of some 4,000 feet (1,200 meters) above sea level and it’s territory occupies a surface of 484.34 km2. Boquete has proved ideal for the production of the high grade Arabic coffee that has just ranked No.! in the world and always had a great prestige internationally..

The scramble for property around the coffee town began in 2001, when Panama was designated one of the "world's top retirement havens". Typically, foreigners come here and buy up a finca of 20 hectares or so to turn it into lots that they then sell on by the square meter at a profit, Boquete real estate land prices have risen up to $80 a square meter today from $5 a square meter years ago.

Countries like these are rolling out the welcome mat to Americans with a variety of financial incentives. Several Americans retired here in Panama are on a pensionado visa which lets them live there after proving they have $500 a month a piece in income. In fact, anyone over the age of 18 may apply and can qualify as a pensionado in Panama. It must be a pension from a government agency (e.g. Social Security, disability, armed forces, etc.) or a defined-benefit pension from a private company. Sorry, but an immediate, fixed annuity doesn’t qualify. Once you become a resident “pensioner” of Panama under the Tourist Pensionado Visa, you are eligible for the most appealing program of benefits for retirees available anywhere in the world right now.

As a qualified pensioner in Panama, you would be entitled to:
· 30% off bus, boat, and train fares
· 50% off hotel stays Monday through Thursday, 30% off Friday through Sunday
· 25% off restaurant meals
· 15% off hospital bills (if no insurance applies)
· 10% off prescription medicines
· 20% off doctors' consultations
· 20% off professional and technical services
· 50% off Airport taxes
· 25% off airline tickets
· 25% off electricity, water & phone bills.
· 15% off at fast-food restaurants
· 50% off entertainment anywhere in the country (movies, theaters, concerts, sporting events, etc.)
· 50% off closing costs for personal and commercial loans
15% off dental and eye exams

Panama also lets retirees import a car tax-free every two years; import $10,000 of household items tax-free; buy property tax-free for 20 years if it is the owner's only home nor will you pay taxes on foreign-earned income. Personal income tax is based on a sliding scale from a minimum of 4% to a maximum of 30%. VAT is charged on most products and services from 5% to 10%. Transfer taxes on real estate are paid by the seller, and there is no inheritance tax or gift tax. Also, you can obtain your permanent Panamanian citizenship by engaging in commercial, financial or industrial activities with a minimum investment of $150k and the applicants wife and children under age can obtain the same benefits as dependents. Tourism investments have 20-year exemptions from import duties, fees for construction materials and equipment, and income, real estate and other taxes. Panama uses the U.S. dollar as its legal tender, which insulates its economy from global shocks. During the Asian monetary crisis of 1998, Panama became one of the healthiest economies in Latin America. Furthermore, is an ideal offshore center. After the Port of Rotterdam, Panama has the second largest duty-free zone port of the world. The expansion of the Canal just ratified in a National referendum, surely to be very beneficial to the economy growth. Panama is an important banking center with more than 85 international banks.

A retiree can live on nothing more than their Social Security benefits -- or live lavishly on a bit more money. Panama has one of the lowest costs of living in all Central and South America: A U.S.-style home can be built for about $40 per square foot; unskilled labor costs $6.40 per day; a full-time live-in maid costs $120 to $160 a month; a beer at a bar costs, 35 cents; a cup of coffee, 30 cents; a haircut and shave can cost as little as $1; an afternoon at a beauty salon is $8; electricity is about 10 cents per kilowatt-hour; water bills are $18 per year; telephone service costs roughly $30 a month; Internet access is $24 a month; wireless is available for a bit more; cellular telephone service costs about $30 a month plus a per-minute charge of around 22 cents; cable TV will cost you about $30 a month.

As a by-product of the 90 year presence of the United States, Panama has numbered English speaking, American trained doctors and hospitals and medical care is a par with the United States. In Boquete there are private and public clinics, one clinic and a laboratory with 24 hour service and four pharmacies at the moment. Although a hospital in Boquete is under project, there are two excellent private hospitals and two public hospitals located in a nearby city called David, which they are fully equipped for any kind of urgency and attending 35 different medical specialties. Health insurance could go for $880.00 a year for a couple with coverage of 70% in just about all services. Car insurance could cost around $600.00 a year fully covered and basic home insurance for $350.00 a year.

In Boquete children have access to private bilingual schools with high academic standards at a cost per month of $70.00. Extracurricular activities like sports, ballet, piano, guitar and others are also available.

If you like to cook, finding some ingredients at the markets is no trouble in Boquete as shopping for groceries is easy with 3 supermarkets and even a Price Costco. Also a mall is under construction right on main street and another smaller one near the fair grounds.

Panama is close to the United States with direct flights to and from Panama to 7 major cities. From Panama city there are two domestic airlines which fly to David in 50 minutes, the closest city to Boquete. Regarding taking luggage in domestic flights is allowed 35 pounds/passenger plus 0.58 cents for every additional pound. Also you are allowed 10 pounds/passenger as hand luggage.

Entertainment and adventure in Boquete is everywhere, whether you want horse back ride, hiking the majestic Volcan Baru which is the higgest peak in the country, or a days hike through the Ketzales trails where you can enjoy bird watching, 3 kms. canopy with the most amazing views you can think of, natural thermal wells great for treatment of various illnesses, near the beaches of the Atlantic (31/2 hrs.) and Pacific (11/2hrs) coasts, take a tour to the coffee plantations where you can observe the Guaymies Indians whom are dressed with colorful clothing and are the one’s who harvest the coffee, river rafting, night life with live concerts and events and much more…

Only by walking through the picturesque streets, stall to drink a hot chocolate, admire the beautiful craftsmanship of the artisans, observe the great variety of flowers and breathing the fresh air makes Boquete the perfect place to live.

By comparison, the amount of actual tourist dollars spent now in this area is under $10,000,000.00 a year. This estimate is based on the number for hotel rooms and occupancy rates posted by IPAT on their website.

To put this into further perspective we need to go no further than Costa Rica to see the effects of the retiree investing in that country. About 30 years ago Costa Rica opened its doors to immigration by foreigners who wanted to come and live there. Today over 30,000 North Americans live and invest in Costa Rica. They were the backbone of Costa Rica’s early tourism and built most of the small hotels and restaurant infrastructure that attracted further tourists and investors. It is only in the past 10 years that the large hotel resorts such as Marriott and Barcelo have ventured into that market. It took Costa Rica 30 years to reach their level of tourism but it could take Panama less than 10 years to accomplish the same success in this market. This is due to the large number of people now retiring (13,000 every day in North America alone) and the Internet, which is an incredibly successful way to reach them and it’s the tool that Panama needs to use to let the 70 million baby boomers that will retire in the next five years find out about the country.

For those who may think this many foreigners in this small country would be detrimental, I would point out that 30,000 couples represent only 2% of the current Panamanian population of 3 million. If we use the 30,000 number as a goal to achieve in 10 years and apply the same numbers as we are seeing in Boquete, Panama would receive about $7.5 billion dollars in initial investment and $180 million in maintenance dollars per year just from the retirees. This represents nearly one million construction jobs alone over this time period. Couple this with the additional investment in tourist infrastructure and you can see that the retiree is really the goose that lays the golden eggs. He comes here to visit, then to live and then to further invest.

By Joseph Denham, Nov 2006