Over the past eight years of living in Panama, Betsy and I have overwhelmingly heard mostly happy stories from other expats about their home and investment property purchases here.
However, the few sad stories that we have heard has mostly involved an inexperienced ex-pat investor signing a contract with another expat, an unscrupulous one, who had all of the negotiations shielded by his Panamanian corporation (Sociedad Anonima).
The Lawyer Takes Over
In other words, the person that the innocent party was negotiating with, the one they met, got to know, and shook hands with, was quickly replaced by a powerful Panamanian lawyer, as soon as the documents were signed.
This can be fine, as long as everything goes smoothly. However, if there are some disagreements down the road, or if the intent from the start was to defraud, the innocent expat will discover that he/she is at a tremendous disadvantage, as an individual, when facing off against a Panamanian corporation. The corporation created by the seller either before or after he bought the land.
Our advice to expats is simply this: Don’t ever sign any documents for purchase or for sale with an anonymous corporation, or with a buyer or seller who has plans to transfer documents to a corporation before all payments have been made, received, and signed by flesh and blood individual.
You do not ever (never, ever) want to find yourself in court, as an individual, facing charges, or trying to seek damages against a corporation.
The person you thought you were doing business with may disappear completely, or they may claim that they have never met you, don’t know what you are talking about, and that everything you are saying is untrue. They could even sue you for slander for accusing them of something that is absolutely true. Then you’d be involved in two separate lawsuits.