How to buy land in Panama (guide)

Authored by the expert who managed and guided the team behind the Panama Property Pack

Everything you need to know before buying real estate is included in our Panama Property Pack

Who is the author of this content?

THELATINVESTOR

A team specialized in real estate investing in Latin America (Panama, Costa Rica, Mexico, Colombia, etc.).

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Panama. If you'd like to learn more about us, you can check our presentation page.

What types of land can foreigners legally purchase in Panama and which areas are restricted?

Foreigners can buy titled land in Panama with the same ownership rights as Panamanian citizens, including condos, houses, commercial buildings, and even islands with government approval.

You can purchase beachfront properties, rural land, agricultural plots, and urban lots throughout most of the country. The key requirement is that the land must have proper title registration in the Public Registry.

However, three important restrictions apply to foreign land ownership. First, you cannot buy property within 10 kilometers of Panama's borders with Costa Rica or Colombia. Second, the first 22 meters from the high tide line on beaches remain public domain and cannot be privately owned. Third, Right of Possession (ROP) land is technically government-owned and carries significant legal risks for foreign buyers.

Military zones and indigenous reservations are completely off-limits to foreign buyers. Island purchases sometimes require special government concessions rather than outright ownership.

As of mid-2025, titled land remains the safest investment option for foreigners seeking secure property ownership in Panama.

Which regions in Panama attract the most foreign land buyers and why?

Can purchasing land in Panama lead to permanent residency or citizenship?

Yes, buying land in Panama can qualify you for permanent residency through several investment visa programs available to foreign buyers.

The Friendly Nations Visa requires a minimum $200,000 investment in Panamanian real estate or a bank deposit, plus proof of economic ties to Panama. The Qualified Investor Visa, available until at least October 2026, requires a $300,000 real estate investment and offers faster processing times.

After maintaining legal residency for five consecutive years, you become eligible to apply for Panamanian citizenship. The citizenship process requires basic Spanish proficiency, knowledge of Panamanian history and culture, and a clean criminal record.

The Reforestation Visa offers another pathway, requiring a minimum $100,000 investment in government-approved reforestation projects. This option appeals to environmentally conscious investors seeking both residency and sustainable land use.

It's something we develop in our Panama property pack.

What are current land prices per square meter across different property types and regions?

How do foreigners typically use the land they purchase in Panama?

Foreign land buyers in Panama pursue five primary strategies for their property investments.

Building primary or vacation homes represents the most common use, with many expatriate retirees constructing custom residences in areas like Boquete, Coronado, and Bocas del Toro. These buyers often choose Panama for its year-round tropical climate and lower cost of living compared to North America or Europe.

Rental investment properties generate steady income streams, particularly in tourist-heavy regions. Short-term vacation rentals through platforms like Airbnb perform especially well near beaches and in mountain retreats, while long-term rentals serve the growing expatriate community.

Agricultural and agribusiness ventures attract investors interested in sustainable farming. Coffee plantations in Boquete, cattle ranching in interior provinces, and organic fruit farming provide both income potential and agricultural visa qualifications.

Eco-tourism development has gained popularity among environmentally conscious investors. Eco-lodges, nature reserves, and sustainable tourism projects align with Panama's growing green tourism sector while offering potential residency pathways through reforestation programs.

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What is the complete step-by-step process for foreigners to buy land in Panama?

The land purchase process in Panama follows eight distinct steps that typically require 30-60 days to complete with proper legal representation.

First, select your preferred area and specific property through research, site visits, or working with reputable real estate agents. Second, hire local professionals including a qualified attorney and registered real estate agent who understand foreign buyer requirements.

Third, make your offer and sign a Promise to Purchase agreement that outlines terms, price, and conditions while typically requiring a 10% deposit held in escrow. Fourth, conduct thorough due diligence where your attorney verifies clear title, checks for liens or encumbrances, and confirms the property's legal status.

Fifth, secure financing if needed through local banks or arrange seller financing terms. Sixth, sign the final public deed (escritura pública) before a notary public, which can be done via power of attorney if you're not physically present in Panama.

Seventh, transfer funds through secure wire transfer or cashier's check, ensuring proper documentation for tax purposes. Eighth, register the deed in the Public Registry to officially transfer ownership and establish your legal title to the property.

Each step requires careful attention to legal details and proper documentation to ensure a smooth transaction.

Which documents are mandatory versus optional when purchasing land in Panama?

Six documents are absolutely mandatory for any land purchase in Panama.

Your valid passport serves as primary identification throughout the process. The purchase contract details all terms, conditions, and obligations between buyer and seller. A title certificate proves the seller's legal ownership and right to transfer the property.

The certificate of no encumbrances confirms the property is free from liens, mortgages, or other legal claims. A fiscal appraisal certificate provides the government's official property valuation for tax purposes. Finally, the public deed (escritura pública) signed before a notary legally transfers ownership.

Optional but highly recommended documents include a power of attorney for remote buyers, allowing a trusted representative to handle the transaction. Property inspection reports identify potential structural or environmental issues before purchase.

Environmental impact studies are valuable for large rural properties or development projects. Survey and cadastral plans confirm exact property boundaries and prevent future disputes. Local utility and tax clearance certificates ensure no outstanding obligations, while life insurance may be required for mortgage approval.

It's something we develop in our Panama property pack.

Can foreigners buy Panama land remotely without visiting the country?

Yes, foreigners can complete entire land purchases in Panama without physically entering the country by granting power of attorney to a local representative.

The remote purchase process covers all major transaction steps including property search, offer negotiation, due diligence review, and final deed signing. Your designated attorney or trusted representative handles in-person requirements while keeping you informed throughout the process.

However, visiting the property before purchase is strongly recommended to avoid scams and ensure the land meets your expectations. Many fraudulent schemes target remote buyers who rely solely on photos and descriptions without personal inspection.

Remote buyers should verify their representative's credentials, establish clear communication protocols, and require regular photo and video updates during the transaction. Wire transfer funds only to verified escrow accounts or directly to sellers with proper documentation.

While remote purchases are legally valid and commonly executed, the additional verification steps help protect against the higher risks associated with buying property sight unseen.

We did some research and made this infographic to help you quickly compare rental yields of the major cities in Panama versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.

What taxes, fees, and closing costs should buyers expect when purchasing land?

Total closing costs for land purchases in Panama typically range from 4% to 8% of the property's sale price or cadastral value, whichever is higher.

Transfer tax represents the largest single cost at 2% of the sale price or cadastral value. Capital gains tax applies at 3% of the sale price or 10% of the profit, depending on the calculation method used.

Legal fees charged by attorneys typically range from 1% to 2% of the property value, covering due diligence, contract review, and transaction management. Notary fees for executing the public deed cost $200 to $300 regardless of property value.

Registration fees paid to the Public Registry equal 0.3% of the sale price for recording the new title. Real estate broker commissions of 3% to 5% are typically paid by the seller, not the buyer.

Can foreigners obtain mortgages for land purchases and what are the requirements?

Foreigners can obtain mortgages for land purchases in Panama, though terms differ from those available to Panamanian citizens.

Most banks require a minimum 30% down payment for foreign borrowers, with loan terms typically limited to 10-15 years rather than the 20-30 year terms available to locals. Interest rates for foreigners currently range from 8% to 9%, approximately 1-2 percentage points higher than rates for Panamanian citizens.

Required documentation includes a valid passport, proof of stable income for at least two years, bank references from your home country, property appraisal by a licensed Panamanian appraiser, and life insurance coverage for the loan amount.

Banks also require debt-to-income ratios below 30% and prefer borrowers with existing Panamanian residency status. Having a local bank account and established credit history in Panama significantly improves approval chances and may reduce interest rates.

Seller financing offers an alternative to traditional bank mortgages, with property owners sometimes accepting direct payments over 3-5 years at competitive interest rates. This option provides more flexibility but requires careful legal documentation to protect both parties.

What are the implications of paying cash for land versus financing the purchase?

Cash purchases represent the most common payment method for foreign land buyers in Panama, accounting for approximately 70% of international transactions.

Paying cash eliminates financing delays, reduces closing costs by avoiding bank fees and mortgage-related expenses, and strengthens your negotiating position with sellers. Cash buyers can often secure 5-10% discounts on the purchase price and complete transactions within 30 days.

Wire transfers from international banks require proper documentation including source of funds verification, currency exchange records, and tax clearance certificates from your home country. Cashier's checks are also acceptable but require bank verification and may involve currency conversion fees.

However, financing can preserve cash flow for other investments while building credit history in Panama. Mortgage interest may be tax-deductible depending on your home country's tax treaties with Panama.

Regardless of payment method, maintain detailed records of all financial transactions for tax reporting purposes in both Panama and your home country. Large cash transfers may trigger anti-money laundering reviews but are completely legal with proper documentation.

What are the most common scams and pitfalls targeting foreign land buyers?

Foreign land buyers in Panama face five primary categories of scams and pitfalls that can result in significant financial losses.

Title fraud represents the most serious risk, where sellers attempt to sell untitled ROP land as titled property or fraudulently sell the same titled property to multiple buyers. Always verify the Finca number in the Public Registry and ensure your attorney conducts independent title searches.

Price inflation scams involve sellers or agents drastically overcharging foreign buyers compared to local market rates. Research comparable sales and consider hiring independent appraisers to verify fair market value before making offers.

Unreliable or unlicensed real estate agents may misrepresent property details, legal restrictions, or market conditions. Verify agent credentials through Panama's real estate licensing authority and seek referrals from other foreign buyers.

Boundary disputes arise when property descriptions don't match actual land boundaries, leading to conflicts with neighbors or government agencies. Always obtain current surveys and GPS coordinates before purchase.

Documentation fraud includes forged titles, false encumbrance certificates, or backdated permits. Work only with licensed attorneys who conduct independent verification of all legal documents through official government channels.

It's something we develop in our Panama property pack.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

Sources

1. TheLatinvestor - Panama Real Estate for Foreigners
2. Taxes for Expats - Complete Guide for Expats
3. Certified Translator Panama - Foreign Property Ownership
4. TheLatinvestor - US Citizen Property Ownership
5. Inside Panama Real Estate - Buying Land Guide
6. Live and Invest Overseas - Panama Investment Guide
7. Living in Panama - 10K Border Rule
8. Pardini Law - Panama Property Purchasing
9. Red Frog Property - Land Buying Guide
10. Multilaw - Panama Real Estate Guide