Then we dropped down to David to do some shopping before heading back home to Puerto Armuelles.
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Have you been zip lining before?
Your questions and concerns are likely the same as ours:
We had and have all the same concerns.
We moved down to Panama when my youngest (and only at that point) was 5 years old. At the time of this writing, she is now 11 years old and has a 6-year-old sister.
First, you should know that I am a very involved parent. I wholeheartedly practiced attachment parenting when my children were younger. My older child attended a co-op preschool in the States.
Skylar had completed 2 months of kindergarten in a Spanish/English language immersion school in the States before we went down to Panama. In addition, my husband Reyn has spoken to her in Spanish since she was a baby. Not all the time, but often. Also, Reyn is not a native Spanish speaker.
At that point, we weren't sure if we were going to move to Panama or not. We traveled for months in Panama before finding Puerto Armuelles. We liked it in Puerto and found a house to rent.
We decided to put our child into school and explore living here permanently. So after 2 months in Kindergarten in the USA and 4 months on the road, we put our 5-year old into 1st grade. The kindergarten, at least at the school she attended, seemed too babyish for her.
She attended a private 7th Day Adventist school in the Rio Mar neighborhood of Puerto Armuelles, Panama.
Except for one English class, it was all in Spanish.
Of course, Skylar has always been an outgoing child. She loves to make friends and embraces new experiences. She also had the advantage of knowing some Spanish. My husband, Reyn, has spoken Spanish to her since she was a baby.
Every child is different, so not every child will be comfortable with the immediate immersion approach. My youngest, who is now almost 7, could never have embraced school here as Skylar did at 5. In general, I think the younger the child starts school the easier the transition. I find the younger the child the faster they pick up the language.
I read a blog recently which had some good insights on introducing ex-pat children into local Panamanian schools. Go to Elizabeth Ballard Spagle's blog post for her experience with her American son going to local Panamanian schools in Boquete, Panama.
School here starts at 7 in the morning and ends around 12 or 1. This is so the kids aren't in school during the heat of the day. For the same reason, the school year here starts in late February/early March and goes through mid-December.
It is obvious that we were still very much in vacation mode when you read what we did with ourselves when our child was in school.
At 12:30 we would pick our child up from school.
We'd go home to eat the lunch our maid, Yolanis, had waiting for us.
It was a very good life.
Then our adoption papers came through unexpectedly. We had been waiting 2 years and were told it would be another year. But we got a call saying, "here is your child". You need to go to China and pick her up right away.
That call turned our world upside down in many ways. For instance, because of required post-adoption visits, we ended up staying in the states for one year. Skylar went to 1st grade (again) in the States in the same Spanish/English language immersion school that she attended for her 2 months of kindergarten. Most importantly, we received an adorable 10-month-old baby girl into our family.
It was a startling experience to go from that school experience to the one in the States.
The changes that had the biggest impact:
Panama had spoiled me. Compared to many, I had an easy life in the States. The school was walking distance from our house. A friend of mine shared drop off and pick up duties.
But still, somehow I always felt behind the 8-ball. There always seemed to be a pile of laundry and dishes to do. People and places to see. Often very pleasant things to do with friends, but it all seemed so rushed. I am sure suddenly having a 10-month-old baby made it more stressful and active than it would have been with just Skylar.
Once everything was said and done, we returned to Panama 1 year after we suddenly left to go pick up our wonderful daughter Blaise from China.
1st Day Of School for Sky (5th grade) & Blaise (1st grade)
The girls recently had another 1st day of school (see photo to the left) at Colegio de San Antonio, a private Catholic school located near downtown Puerto Armuelles, Panama.
Over those 5 years, we have mostly dabbled in school here.
We have never been able to replicate the great experience we had with school initially
Since our return to Panama, we have mostly homeschooled.
Skylar has returned to the 7th-day Adventist school twice. Neither time for a full school year.
Both children have also attended the local English school, Las Palmas. Again not for a full school year.
However, this last school year was different. I was determined that they would go to school for a full year.
I had 2 primary motivations:
The difference was huge. For one, if you take it seriously, they take you seriously.
For the first time, a school insisted I get approval from the Ministry of Education before Skylar could start school. We had to have stamped and notarized transcripts and more.
However, once again, Blaise at least has dropped out of school. She is much happier with a private tutor.
Skylar continues to go to school. She has mixed feelings about school, like all kids, but in general, she likes it.
Bring your children' transcripts from your current school with you to Panama. This will make the process much faster and easier for you. Also, try to have the transcript comply with the suggestions below.
Learn about my teenage daughter's experiences in Panamanian Schools.
You can find out some reasons to homeschool in Panama.
This impacts Panama property within 10K of both Costa Rica and Columbia.
(FYI - 10 kilometers is the same as 6.2 miles.)
The same restriction used to apply to all island property, but in 2006 that restriction was eliminated. So unless the island is less than 10K from Costa Rica or Columbia, a foreigner can buy land on an island, or the whole island, in Panama.
It seems like a very clear cut rule, but it isn't.
The rule says that a foreigner cannot own property within 10 kilometers of a border Panama shares with another country. The 10 kilometers is measured from a proposed property to the closest point on the border from that property.
However, many foreigners have purchased land within 10 kilometers of Panama's borders, especially the Costa Rica border.
Technically, the buyer of rights of possession (ROP) property is not the true property owner. The true owner is the Panama government because the government holds the title. (This also means that ROP land is also exempt from property taxes. Find out more about Panama property taxes and exemptions here. ) Therefore, it is perfectly legal for foreigners to buy ROP property in Panama less than 10 kilometers from Costa Rica or Columbia.
Such corporations designed to keep the owners of the property hidden. A Panamanian, often a lawyer, is the face of the corporation. The true owner(s) are kept anonymous.
Technically, even corporations cannot buy property inside the 10 kilometer line if a foreigner is part of the corporation, or if foreign money is used to buy the property. But given the nature of anonymous corporations in Panama, it is very hard to verify whether a foreigner is part of it or not.
At one time, it seemed that the existence of anonymous corporations in Panama were numbered. But each time the proposal was raised, it was also ultimately squashed. There are too many people in power who benefit from the opaque nature of these corporations. These days, it seems unlikely that anonymous corporations will be banned in the foreseeable future.
(Read how Panama proposed banning corporate anonymity and then a subsequent post on Panama suspends the proposal to ban anonymous corporations.
While we are on the subject, you may want to read about the dangers of buying property from an anonymous corporation in Panama.)
For instance, we own titled land, in our own names, in Panama within 10 kilometers of Costa Rica. Our property is recorded in the public registry of property. No one batted an eye. We know many people who have done the same. It is technically risky. However, it seems extremely unlikely that the government would claim the property from us.
However, everyone's risk tolerance is different. To be as safe as possible, you should buy at least 10 kilometers away from the border.
The 10 kilometer property rule is the only restriction on foreign ownership of property in Panama.
Panamanian law is very friendly to foreign investment in real estate.
If you want to buy land outside the 10K line in Puerto Armuelles, you need to buy land north of the San Bartolo bridge. This bridge is on the main road into Puerto Armuelles and goes over the San Barolo river.
This means Puerto Armuelles is situated such that it has some of it lands are more than 10K from the border with Costa Rica, and some are less than 10 kilometers from the border.
There is a surveyor's map below which gives distance from the border of various points in Puerto Armuelles. A good rule of thumb, as I say above, is whether a point is north of the San Bartolo bridge or not. If a property is north of the San Bartolo bridge than you are almost always more than 10 kilometers from the border of Costa Rica, per the 10k rule.
For instance, these Puerto Armuelles neighborhoods are more than 10 kilometers from the border with Costa Rica. There are more neighborhood outside the 10k line, but the ones below are the primary ones.
Here is the map of the Puerto Armuelles area with distances from border as done by a certified surveyor.
April 13, 2013
How Will This Effect Panama's Financial Sector?Proposed Bill 568 did just that.
Then, 3 days ago, on April 10th, President Martinelli froze debate on Bill 568 in the legislature.
Was it because of the recent leak of 1000s of bank accounts owners in tax havens, such as Panama? Most likely. The publication of these names was probably the straw that broke the camel's back.
This bearer share bill was controversial from the get go. Many lawyers and business people are against it, while many banks favor it. Of course, it was extremely unpopular with those using bearer shares to conceal illicit activity.
FYI: Bank accounts are involved because the real owners these corporations open bank accounts under the name of the corporation Of course, the real names of the owners of the bank account, and the corporation, are kept secret via the anonymity of the corporation's bearer shares.
The recent leak reveals the details of 1000s of offshore holdings by people and companies in more than 170 countries, including Panama. The majorityof the secret accounts whose owners are now "outted" are in banks located in the British Virgin Islands, the Cook Islands and Singapore. For more info on this topic, see this New York Times article and The International Consortium of Investigative Journalists
However, even without freezing the bill, its passage may not have kept Panama out of trouble with the OECD.
At the last minute, Section 27 was added to bearer share bill. Section 27 states that the share holder names would not be revealed for 2 years after the bill's passage into law.
No surprise there. There are lots of people, some in high places, who are hiding behind these bearer shares for various reasons:
The 2 year delay allows those who are actively trying to hide their assets to move them around so they can retain their anonymity. For instance, I have heard lawyers recommend those who currently own such corporations to transfer their assets into Private Panama Foundations. The OECD - and the USA's IRS - are probably pretty unhappy with that and other possibilities.
FYI: Bearer shares are anonymous negotiable instruments that confer shares of ownership in a Panamanian corporation whose owners and manager are not required to be disclosed anywhere on a public record.
Bearer shares have been part of Panamanian corporate law since 1927. It is one of the reasons there are so many ships that register Panama as their home port. By doing so, ships can change ownership without any government knowing about it.
In addition, instead of directly declaring and publicly registering the owners names of the corporation in a sworn document there will be an intermediary custodian. This custodian, which can be a lawyer or bank, will theoretically be held personally responsible for any criminal activities of those who have Beneficial Ownership and therefore control of the corporation.
Panama is not the only country to go the custodian route. However, it is a method that can be corrupted so that the true owners names may still never come to light.
Martinelli has been promising to end the anonymity of corporate bearer shares for a while. His motivations:
I am unsure the effects of not passing Bill 568 will be for Panama and its financial sector.
I'll let you know when I learn more.
What Privacy? People In Panama Are Very Interested In What EveryOne is Doing All the Time.Everyone discusses everything here.
Perhaps you are trying to sort out a dispute with your neighbor. When an official calls you in to explain your side of the story, you will be explaining it in front of everyone else waiting to talk with that official.
Your business is everyone's business. Confidentiality is a foreign concept here.
Say you deposit a large sum of money at your bank down the street. Chances are that this weekend the teller or bank president will tell all the people he or she is hanging out with about it. It is news.
Panama is like a small town in many ways. The whole country only has 3.3 million people. People gossip as a pastime. They like the drama of it all.
Of course it also means that rumors run rampant here.
In Panama, more than any other place I have been, the phrase, "I'll believe it when I see it" is important to keep in mind.
Even more important is to remember that you should use extreme care if you want to keep something private here in Panama.
Don't assume that your banker, lawyer, neighbor, or friend will keep mum about something. Most likely they will not.
Reyn and I are not trying to hide. In fact the thought of being targeted by the IRS puts my guts into knots.
I really want to play by the rules, but of course, I don't want to pay more taxes than are absolutely necessary.
We went to Panama City on Tuesday to meet face-to-face with a couple of tax accountants who specialize in helping US citizens who live in Panama.
Okay so maybe we didn't need to meet with 2 accountants over 2 days, but we wanted more than 1 perspective on the recent changes. It was an enlightening experience.
NOTE: We met with one of the accountants near the statue of Einstein's head in Panama City (see the photo above). Even Einstein had a hard time understanding tax law, and I imagine it was alot simpler back in his time.
The difference for US citizens is that the IRS is in hot pursuit.
Most other countires might have laws saying their citizens must pay taxes even while abroad, but they aren't willing to pursue the matter.
Lots of expats in Panama want to live "under the radar". In many ways that is possible here. The cash economy thrives in Panama. Paying for things - even very large ticket items - in cash is the norm. Panamanians generally prefer it. Unlike the US where some places won't even accept cash.
Very few things are computerized here. Unpaid bills don't haunt you in Panama. They just disappear. There is no local financial tracking system, or any kind of tracking system. Well, except for immigration - but even that is limited by location.
Neither is true anymore.
The Organization for Economic Cooperation and Development (OECD) has been exerting more pressure on "grey" countries. They are increasingly saying to countries that if you want to play with the big boys in the world market you need to play by the rules.
OECD has been targeting tax havens, putting countries on black, grey, or white lists depending upon whether they exchange information with other nations for the purposes of tax reporting, regardless of domestic bank secrecy laws
In April of 2009, Panama was put on OECD's "grey" list.
These countries, and more, have now all complied with OECD's Article 26 standards regarding information exchange.
Panama was conspicuously absent from the list. This is true no longer.
Panama has enacted a number of transparency rules, including a new law that requires reporting the names of the share holders of its many corporations.
So all you folks who are "hiding" under a Panamanian corporation or private Panama foundation, beware. Of course, if you are an American, you were always required to report any "bearer" or other shares you hold in a Panama corporation or foundation to the IRS. But now, it is much easier for the IRS to discover if you participate in a Panama corporation or foundation.
Many Panama lawyers, either won't tell you this, or don't know about this new tax implication.
Do yourself a favor. Make sure you don't just talk with a lawyer, but an accountant who knows the tax implications both in Panama and in the US (or in your country-of-origin).
Okay, back to the OECD and Panama.
This means that Panama has signed information exchange agreements with at least 12 major countries.
The most far reaching agreement they signed was with the US government.
World-wide the US has become very aggressive in seeking out expats who aren't paying their taxes - no matter where they live. There really is almost no place to hide from the US tax-man anymore.
In 2011, Panama officially said "uncle" to the revenue-starved US. Panama agreed to grant bank account access to IRS agents - but only if they have a US-issued warrant in hand. This is similar to the agreement european and other countries have with the US for information exchange.
As part of that agreement, starting in 2014, Panama has to report any bank accounts over $50,000 to the US. The Panama banks are very scared of stepping out of line with this new agreement so they aren't waiting for 2014. They have already started reporting these bank accounts.
While these changes feel very much like Big Brother breathing down your neck, unless something changes with OECD or US Tax law it is a new global reality.
Compared to most other places, Panama is still an excellent choice to live, work, and invest
Panama is also a very easy place to set up a corporation.
If you have an off-shore business, for instance an on-line business, you can easily and quickly set up an off-shore corporation in Panama.
For your business to qualify, you must have:
You can have your office in Panama and do all your work in Panama, but your clients cannot be Panamanians.
An off-shore corporation gives you great tax freedom.
You not only don't pay taxes in Panama, but you can also qualify for a huge income tax exclusion in your home country.
For instance, if you are a US Citizens you can legally exclude the first $95,000 you earn "off-shore".
This is available to all US citizens if you live outside the USA for "at least 330 full days during any period of 12 consecutive months".
However, if you are a legal Panama resident and own your own home in Panama, you get the exclusion no matter how much time you spend in the USA.
To get this exclusion, you must file a 5471 form as part of your US taxes each year no matter how much or how little you earn.
Until next time,
Betsy
March 23, 2013
David Fair A Good Place To Look At Cows & RelaxThere are many many cows on display.
Awards are given for the largest cows and bulls.
With steady climb in cattle prices lately the owners of these cows are feeling very wealthy.
Not only are cattle prices increasing but the agricultural land that they graze on is also going up in price. However, the price of cattle is not the main reason for the increase in agricultural land prices.
The quest for land for palm oil plantations is fueling the price increases. Many investors are looking to make money in the soaring palm oil trade, especially now that your trees can produce oil in 2 to 3 years instead of the former 7 years of the older and taller oil producing palm trees.
Horses and equestrian events are also popular at the fair. It is a good place to be a cowboy.
There are not only displays of all the agriculture in Panama, but many vendors of all sorts of flowers and plants. It is a good place to get a wide variety of plants for your yard and vegetable garden.
The Fair is also a great place to visit for crafts of all sorts. Panama is not a place overflowing with crafts. However, you can find them at the fair. Crafts, paintings, hammocks, hand made chairs, and more are for sale at the David fair. In fact there are so many vendors this year that all the rides were consolidated across the street from the main fair.
Of course, a fair has to have rides. That is the main reason my children clamor to go to the fair. There are also rides on ponies and cows for young children . If you want to go on the rides, keep in mind that the rides don't start until late in the afternoon.
There is also a place to view a wide variety of animals and birds, not just those that live in Panama. The fair used to have 3 ostriches on display. Those have "disappeared" in the last 2 years. There are also lots of animals native to Panama on display like margays, and a variety of tropical birds.
Technically the fair is over on Sunday night. However, if you are looking to buy plants you can usually do so on Monday morning.
Oh, there is also alot of music at the fair. It is a party every night of its 10 day run. We usually leave before the partying starts but for many that is when they arrive.
It costs $2 to attend on the weekends, $1 if you are retired Admission is free if you are under 8 years old.
The David Fair is definitely worth a visit.
But you really need to see this piece of beautiful Panama real estate in person.
It is located in Panama's only true beach town of Puerto Armuelles.
Click the link below the video to see the listing details.
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What Is The Deal WIth Panama's Pensionado Visa?
In particular, there is a lot of glowing prose written about Panama's Pensionado Visa or Retirement program.
In this post, I will delve into Panama's Pensionado Visa program
This retirement program offers many cost-saving benefits
Panama guarantees your Pensionado status.
Panama has pledged to grandfather in the rights of Pensionado residents. This means that even if Panama changes its laws regarding the Pensionado visa in the future, your status will never change!
In other countries, new laws have affected the status and perks of long-time ex-pat retirees.
It is obvious that Panama wants retirees to choose to live here. The country even makes it easy to bring your pet to live with you.
Yes, the benefits are good, but...
It may not be as wonderful as the over-the-top enthusiastic reviews of the program make it seem.
The list of cost-saving discounts above is not as rose-colored as it sounds.
It is a wonderful program, don't get me wrong.
For instance, pensionados here in Puerto Armuelles only pay $3.89 a month for water. Granted, without a discount your water bill is only $7.10 a month. But still, it all adds up.
I simply want to inject a dose of reality into the wonders of Panama's retirement discussion.
You don't need to be over 55 or 65 to qualify.
There is no minimum or maximum age.
It normally takes 6 months to get the fully approved visa once you submit the application with all the documentation. However, you are issued a temporary visa immediately upon submitting your application.
It usually costs from $1500 to $2000 per person to get this visa. This includes lawyer fees. You can sometimes get a discount if you submit the applications for your dependents or spouse at the same time.
You will also need a boatload of documents. All the documents will need to be certified, authenticated, translated, etc...
I will outline all those requirements in a future post.
Yes, you can.
All Panamanian retirees can enjoy the retirement perks of the Pensionado visa.
This means that if you are of retirement age—60 for men, 55 for women— you can enjoy most of these Pensionado Visa discounts. It doesn’t matter which type of residence visa you are granted.
So again. As long as you are a legal resident of Panama - and of retirement age - you can get the same discounts on services that Pensionados enjoy.
Want to know about other Panama residency visas you may qualify for? Check out this post for 3 other visa types.
