Video: The Advantages and Disadvantages of Life in Panama – with Calvin

Video Transcript

Back in November I spent a few days at Calvin’s guesthouse in Boquete in Panama. We did quite a bit of content together including on Ecopetrol (which I am very long and which recently announced a 20% dividend), and his unique subscription service.

But we also made a video about life in Panama as he’s been living and doing business there for a number of years.

It’s an insightful discussion. Panama really has a lot to offer to people who want to be left alone (the enthusiastically-embraced hard lockdowns being a notable exception). Since then, I’ve obtained residency in Panama.

Other articles on Panama

Services in Panama:

Subscribe to the PRIVATE LIST below to not miss out on future investment posts, and follow me on InstagramTwitterLinkedinYoutubeFacebookRumble, and Odysee.

My favourite brokerage to invest in international stocks is IB. To find out more about this low-fee option with access to plenty of markets, click here.

If you want to discuss your internationalization and diversification plans, book a consulting session or send me an email.

fruit shop living in Panama

Transcript of “The Pros and Cons of living in Panama”

LADISLAS MAURICE: Hello, everyone. Ladislas Maurice from So today, I’m really excited to be having a discussion with Calvin Froedge from Twitter. Calvin, how are you?

CALVIN FROEDGE: Good. Thanks for having me.

LADISLAS MAURICE: So today, we’re in his lodge. It’s essentially an Airbnb. You have a few apartments here, so I’m staying here for a few days with my family. The views are absolutely wonderful. We’re in northern Panama, in Boquete. So this is the little town of Boquete. It’s a little retirement haven for a lot of Americans. So Calvin, can you tell us when did you move here?

CALVIN FROEDGE: So I started looking into leaving the US sort of after I finished the Appalachian Trail. I was working 80 hours a week as a contract programmer. And I’m sort of asking myself, I’m kind of working today for the government, I work tomorrow for myself, I do that on repeat. So, there’s something wrong here. If I’m working this hard, and I’m making this kind of money, then I should probably be saving more, investing more, have a higher standard of living. So that was kind of when I decided that I was getting a raw deal as an American living in an American city. That was 2015 or so when I really came to that conclusion. So I started looking for alternatives. And 2016, I decided that I was coming to Panama. 2017 was my first full year here. So now we’re about to head into 2023. So this, I guess, it’ll be my fifth, sixth full year coming up.

LADISLAS MAURICE: Nice. And why Panama? Why not some other destination in Europe or somewhere else in Latin America?

Territorial Taxes in Panama

CALVIN FROEDGE: So I’m sure you’re aware of and talk to your subscribers about what territorial tax systems are. Basically, a territorial tax system is just you don’t have to pay taxes on income sources that come from outside of that particular territory where you are. So if you live in Panama and you have a business in Costa Rica, for example, or Colombia, or anywhere in the world, you don’t have to pay taxes on that to Panama. There’s actually a specific line, on your Panamanian tax return, where you just put “foreign source”, and it’s not included in your renta gravable, your taxable income. It’s just completely exempted.

Why move to Boquete in Panama

So Panama, when I came down here, had this thing called the friendly nations visa. They still have it but they’ve changed the requirements. When I came, you essentially had to pay a few thousand dollars, do some paperwork. You had to put $5,000 in a bank account for three months. And then you got permanent residency with a path to citizenship. So it seemed, at the time, like it was the best deal in the world. I already spoke some Spanish, so I decided that that was the one I would pursue. And then I came here, specifically, because I basically looked at a topo map. I knew I didn’t want to be in the beach. I knew I didn’t want to be kind of those middle elevations. I didn’t want to have bugs, I didn’t want to have snakes, I didn’t want to have hot weather. So this place is kind of cool, high altitude tropics. It stays between 55 Fahrenheit and 75 Fahrenheit year round, which is cold for some people, but perfect for me.

So, yeah, I’ve been generally happy with the move so far. It’s definitely, I think, been a good decision financially. Living here, there are issues like there are anywhere else. But I like being surrounded by nature. I like being in a very diverse place. There’s people here from all over the world. You can go to the farmers market and meet people from probably 20 countries that have moved here. You can get, it’s a small town, but I think there’s 200 restaurants or something. Have got lots of different grocery stores, people that import from all over the world. You can get weird stuff that you would normally only see in China or Korea. You can get stuff that you would normally only see in Spain, because people have moved here from those places and started import businesses, started sort of bringing their families here.

The population of Panama and the Chinese presence is huge. There’s lots of Americans, a lot of expats have moved here, a lot of Germans. So a lot of people from all over the world. There aren’t very many people my age that came here to do, you know, for primarily financial reasons.

Many different lifestyles in Panama

LADISLAS MAURICE: I mean, I’d say that there are more in other parts of Panama. Because I help quite a lot of clients move to Panama, because especially for non-US people moving to Panama, you can, essentially if you want to reduce your tax rate to zero, which is really interesting for Americans that doesn’t quite work this way in most cases. I don’t want to talk about this. It’s a can of worms, US taxes. But when you look at Panama, I mean, you chose here, Boquete, which is absolutely lovely, especially with all the hiking, and the volcanoes, and all that. But it’s a lot of retired people.


LADISLAS MAURICE: But if you want the big city life, if people want that, you can find that in Panama, you just go to Panama City. If you want more the Caribbean vibe, you can go to Bocas. If you want some more surf towns on the Pacific, you have that as well. So Panama has quite a lot to offer. And like you said, it’s very diverse. So generally, there’s something for everyone.


Failed expatriations in Panama

LADISLAS MAURICE: Panama ticks a lot of boxes. It’s not perfect, for sure. I mean, we were discussing, before, offline that you’ve seen a lot of waves, because you’ve been here for quite a few years, of people who come here from the US and then they leave. So a lot of people come here and then they fail.

CALVIN FROEDGE: Right, yeah. So I’ve also run, basically, a retreat for programmers before. So I’ve also, myself, brought actually a lot of young people from all over the world here. But what I’ve seen is the kind of on the US political cycle, at least for the Americans, when Trump got elected, a bunch of people came down here because Trump’s going to destroy America. When Biden got elected, a bunch of people came down here because Biden’s going to destroy America. So I’m sure the next election, you’re going to get the same thing, you know.

LADISLAS MAURICE: To be clear, they’re all destroying America. (laughs)

CALVIN FROEDGE: So, yeah, definitely seen that. From bringing young people here, I mean I brought people from Sweden, Norway, the US, Canada, the UK. I mean, I helped a lot of people get permanent residency here. And most of these were young people that I brought. Only a few of them stayed here in Boquete. It’s a retirement town and there’s young people, but you have to really speak Spanish to interact with most of those young people. So a lot of the young people that come here, they end up either in Panama City, or in Bocas del Toro. Panama City, that’s where a lot of the jobs for expats are. Panama’s also got these like free trade zones. They’ve got a lot of incentives for companies to put their corporate headquarters and have their executives here. I think they have a program where corporate execs can live in Panama and basically be exempted even from domestic income tax for companies that move their corporate headquarters here. They’ve also got some kind of special economic zones like Ciudad del Saber, where they also have incentives for companies that go there.

For me, the city, it’s like, it’s a lot of traffic, there’s a lot of pollution. The one particular case they were supposed to build a water treatment plant. The land was purchased and they built a mall instead. So the city has some great things, too. One of the best Korean restaurants that I’ve ever been to anywhere in the world. And I’ve traveled in Asia, I lived in Hawaii for four years as well. So I’ve definitely eaten some good Korean food, one of probably the best Korean restaurant I’ve ever eaten at in my life is in Panama City. Good omakase place. So yeah, Panama is very diverse. But for me, the weather here, and kind of the fact that I don’t have to deal with traffic. I mean, for me, those are the, I don’t want to wait in line. I don’t want to be sweating my ass off, right? Those are my kind of boxes.

Colombia vs Mexico vs Panama

LADISLAS MAURICE: Cool. Yeah, because I mean, I’ve traveled also quite a bit in Latin America, and just comparing with like Mexico or Colombia, personally, I find that the heart would choose Mexico or Colombia because it’s more exciting. I prefer places that are a bit more exciting than Panama. But Panama is just such a logical destination. It just ticks so many boxes from a financial point of view, from a practical point of view. The financial system here is, though it’s far, far from perfect, it’s still leagues above anything that you’ll find anywhere else in Latin America. So from that point of view, it’s attractive.

Banking in Panama

CALVIN FROEDGE: Yeah. Well, you’ve got dollar-denominated accounts with decent yields, the banks are pretty conservative. So if you’re looking for a place to deposit money, you still need to spread it out a little bit, but Panama’s about as safe a place as any, I think, to put money in. There’s, I think, 75 banks or something here between general and international banking licenses. And I think in the time that I’ve been here, I’ve only seen one go bust. And that was kind of more like kind of a credit union sort of local type thing.

LADISLAS MAURICE: That’s less than in the US or in Europe.

CALVIN FROEDGE: Yeah. So I mean, just as an example, they basically won’t give loans to foreigners. They basically, they won’t give loans to entrepreneurs unless they come from like a very kind of privileged background, very prestigious, they have inside connections at the bank. The bread and butter for banks here is serving the government and deposits, right? Like, they have like a subsidized house program for citizens that’s 1% interest rate or something. So, they don’t make a lot of money on that as far as interest goes, but they also they don’t carry any risk. The government basically puts up all of the capital. If you’re a government employee, it’s very easy to get loans here as well, because they essentially don’t ever fire government employees.

Labor laws in Panama

LADISLAS MAURICE: Yeah, labor laws are not fun here.

CALVIN FROEDGE: Yeah, the labor system here is not– I can’t really say a lot of good things about it. I think, in a lot of ways, the labor system here sort of keeps wages low. The Social Security system, for example, you pay into Social Security based on how much you pay somebody. So if you pay somebody more, then you, as the employer, you have to pay more into Social Security as well. So it’s thirty-something percent, might not be exactly right, but that range of the paycheck for any employee that you have. So it’s a pretty significant expense and, obviously, one that gets bigger as the wage goes up.

The other thing is, if somebody decides that you’ve treated them unfairly, or unjust terminations, for example, I fired somebody one time for, they worked for me for like a month, they were just doing a bad job. They basically went to the Labor Board, said that I fired them unjustly. And I, obviously, didn’t agree, but the Labor Board made me pay another month salary to them. And so if I had been paying them more, that termination fee would have been even higher. So there’s just there’s an incentive to keep wages low, not so much because people don’t want to pay more for labor, but if they pay more for labor, they also have to pay more to the government, they’re exposing themselves to more risk.

There’s a lot of informal employment here. And the government tries to crack down on informal employment, but the reason that there’s informal employment is because it’s such a massive pain to deal with the labor system. Getting any of these contracts through, if you want to inscribe somebody in a plan, it’s something that’s going to take your accountant like, literally, a day of work to have to go deal with, go back and forth. Here, you have to get lots of things notarized. So it’s a very, very bureaucratic system.

LADISLAS MAURICE: Like most of Latin America.

CALVIN FROEDGE: Yeah. It’s extremely bureaucratic. As an American, it will drive you nuts to do business here. I mean, the first couple years, I literally thought that I was going crazy. And then basically, I just figured out that you basically just have to pay somebody, and then just keep calling them and saying, “Is it done yet?” And don’t go and do it yourself, but pay somebody and then keep asking them if they finished it yet. Right? (laughs) That’s kind of the most effective way to get stuff done here.

And I’ve got friends who do business at all levels here. I have friends who own large tracts of land, do big industrial developments, commercial developments. I’ve had extensive conversations about all these things. And people say, well, the nice thing is that it’s a little bit more wild west. So, I have a friend who was trying to get a housing development, like a neighborhood permitted. He went and slept on the couch in the like environmental approvals office in Panama City. And he’s just on the couch, he ends up going to the Secretary’s birthday. And eventually, the lady that runs the office comes out and says, “Who is this gringo who has been sleeping on the couch for the past week, and is like always here, and seems to know all of your names, and be going places with you?” And they’re like, “Oh, he’s this guy that’s trying to do some residential development in Chiriquí.” And so then that was how he eventually got it permitted, because he just could not get a decision maker to look at it without going through the steps of like, becoming part of the family.


CALVIN FROEDGE: So that’s sort of– Yeah, it does sound like a nightmare, and it should for a lot of that stuff. But there are also a lot of benefits to being here. It’s so dysfunctional that you don’t really get bothered.


CALVIN FROEDGE: Like I said, the banks are super conservative. I think it’s a safe place to store cash.

Gun laws in Panama

LADISLAS MAURICE: You can have guns as well, as a permanent resident.

CALVIN FROEDGE: Oh, yeah. I mean, dude, it’s easier here to get– Okay. As far as like, the actual investigation that goes into whether or not you should have a gun, it takes more time here, you have to pay more, okay? But there’s like zero diligence done. Okay?


CALVIN FROEDGE: Anybody can get a gun.


CALVIN FROEDGE: Anybody can get a gun in this country.

LADISLAS MAURICE: That’s nice. So essentially, you can move to Panama. If you’re not a US person, you can go down to 0% taxes, if you structure things properly. If you have a business overseas, you don’t actually have to deal with the bureaucracy here at all. So I think that’s a big plus. And then you can have a gun.


LADISLAS MAURICE: Not that you really need it, but just out of principle, if you want a gun, you can get a gun.

CALVIN FROEDGE: Yeah. Well, I mean, I guess each person can decide whether or not they want a gun. I know a story of another lady that, basically, she had a deposit in a bank, and they didn’t want to basically pay her in cash. And she went down there and waved a gun around. And she got her cash and didn’t go to jail.

LADISLAS MAURICE: (laughs) Yeah, she’s a hero.


LADISLAS MAURICE: (laughs) This lady is a hero.

CALVIN FROEDGE: (laughs) So, yeah, there’s definitely a huge kind of Texas, Montana armed-to-the-teeth, gun-owning contingent here. There’s a lot of South Africans, too. I mean, there’s huge kind of gun clubs here. You’ll see people in the mall, like sitting around having their like meetups for– But you also–

LADISLAS MAURICE: Is it open carry?

CALVIN FROEDGE: It’s not open carry, it’s concealed carry.


CALVIN FROEDGE: But they’ll like just basically meet up to like talk and apply for more permits to get more guns. I mean, you go to the mall in Albrook and just like hang out at the cafes, and you’ll see some of the local people that live in that area and kind of the things that they’re into. But yeah, there’s definitely a gun culture here. You see billboards with people trying to sell guns. So, if you want to live like a kind of Texas, Montana redneck life and not really have anybody ever bother you, not pay any taxes on land, not pay any taxes on your primary residence, get a good interest rate, essentially never have to deal with anything. I mean, they don’t even know where you live, they don’t even know what your address is. They don’t even keep track of address system, of the address here. Like, I named my street.


CALVIN FROEDGE: I gave myself an address. Okay? The bank statements here do not have addresses on them. Okay? Like try getting your utility bill changed from the person that you bought your house from. I mean, they don’t even know who’s paying which power bills. Okay? Like, it’s total chaos in a lot of ways, which if you’re a freedom-loving person, I mean, I think a very disorganized government definitely has its advantages to a well-organized government. And there’s some things that they’re organized about but–

Lockdowns in Panama

LADISLAS MAURICE: They were quite organized during the whole lockdowns.

CALVIN FROEDGE: Yeah. It’s like, on paper, they were, and Panama City was pretty bad. You couldn’t go out for a walk in Panama City around Christmas time, for example. They had complete lockdowns on people being outside. The number of days those really strict measures were in effect, maybe it was a couple months in total. But at the same time that that was going on, you also you could basically walk out on the street and tell the cop, “Hey, I need to buy some cigarettes and I need to know where it’s open.” And the cop would tell which chino you could go into the back door of to go buy cigarettes. Not that I was buying cigarettes, but it’s just an example of kind of how it works here. Like they had these papers that they were giving out to anybody that applied to them. It was called a permiso de circular, to go out and drive. Right?

So during the pandemic, strict lockdowns, there’s all these lawyers and diplomats here in Boquete, basically, just having a grand old time. And the rest of the country is supposed to be locked down. They’ve got gendered days for going to the grocery store. They were spraying airplane wings with disinfectant. Okay? So at the same time that all this absolute madness was going on, you’ve got the ambassador for Cuba is at the golf course. There are people out playing golf, like all the lawyers’ kids, or politicians’ kids are here in the restaurants, and the bars, on the dating sites. Like, it was complete hypocrisy. But I don’t think the actual enforcement was anything close to as strict as it was in Europe. And if you stayed out of the cities, other than needing to go to the grocery store, you really didn’t have your life affected too much, unless you lost your job. And a lot of people did lose their jobs.

The unemployment rate here, after the pandemic, hit like 20%. I think like a third of the restaurants in the country, like a third of the hotels in the country, maybe even more, actually went out of business during the pandemic. Like last year, 2021, it was great for anybody that owned lodgings because so many people had been shut down that when they reopened everything, there just wasn’t enough capacity.


CALVIN FROEDGE: So there was, literally, last year, not a single room available on many nights of the year to rent here in Boquete.


CALVIN FROEDGE: And I’m driving around, looking at all of these places that shut down, that are still shut down that could have been making hundreds of dollars a night–


CALVIN FROEDGE: and they were shut down.


CALVIN FROEDGE: Yeah. I would say the ruling principle of Panama is probably chaos.

LADISLAS MAURICE: Which is a positive thing, it’s what you want.


Panama’s foreign policy

LADISLAS MAURICE: When you want freedom, you want to be living in jurisdictions where the government is just a bit powerless to do much. That’s where you find true freedom. What about Panama’s foreign policy?

CALVIN FROEDGE: Well, another interesting story, I’m not sure if this is hearsay, or if this actually happened, but the story is that this town, in particular, got some money from the Taiwanese government to do some water project, or that Panama got money to do infrastructure projects from the Taiwanese government. And then the government changed and then they turned around and did the same deals with the Chinese. And then that China now was talking about putting a high-speed rail across Panama. They own a new port down on the Amador Causeway. They built like a cruise line terminal. So they definitely made inroads on developing infrastructure here.

There are entire neighborhoods in Panama where you only see Chinese people, where you only see Jewish people, where you only see Arabs, where you only see Indians. So I would say that the foreign policy here is like anybody who pays can play.

LADISLAS MAURICE: Okay, so pragmatic.

CALVIN FROEDGE: It’s very pragmatic. There’s like zero dogmatism, I think, in politics here. There’s, definitely, a very prevailing sort of protectionist sentiment. They’re very protectionist to the labor system. They don’t want, I mean, Venezuelans are probably the most despised people in Panama because they come here and they work jobs cheaper than Panamanians would. They do it a lot illegally under the table. So people feel, in Panama, about Venezuelans, like Texans feel about Mexicans or Hondurans. It’s very much, “They took our jobs.” And in some cases, they are taking their jobs.

LADISLAS MAURICE: Yeah, they are.

CALVIN FROEDGE: But in a lot of cases, there’s also there are not enough Panamanians to do a lot of jobs. There probably aren’t enough. I know that there aren’t enough Panamanian programmers, or scientists, or engineers, people doing like industrial stuff. There’s not much of a manufacturing base here at all. There’s some commodities base but could be a lot bigger. I think Panama could definitely do with liberalizing its labor policies a bit more. But I don’t think that there is a strong foreign policy bent. They just kind of do whatever is pragmatic at the time to get what they want at the time.

LADISLAS MAURICE: Which is good. Cool. Fantastic. Calvin, thank you very much. So I really encourage people to follow Calvin on Twitter, you’re a very fun follow. And also, Calvin has a substack, there’s a link below. I subscribe myself. You talk quite a bit about Panama. It’s quite insightful. So I constantly learn about Panama through your substack. But it’s not only Panama, it’s also investments. And if you’re interested in moving to Panama, there’s a link below, you can speak to my immigration lawyers. You can get an information package from them. And also, if you want to speak to a good real estate agent here, in the Boquete area, there’s a link below. Calvin, it was a real pleasure.


LADISLAS MAURICE: Thank you very much, man.