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Panama vs Costa Rica

When you think about living full or part time in Central America, Costa Rica seems to be the first country that comes to mind. Having spent a fair amount of time in both Costa Rica and Panama, I may be able to offer a somewhat unique perspective when comparing the two countries. While both countries are similar in many respects, there are some major differences that you should be aware of.

First of all, there are many similarities. Both Panama and Costa Rica have mountains, oceans, beaches, volcanoes, tropical rain forests, zip line and eco tours, hot springs and exotic wildlife. Both countries have more residents who speak English in the bigger cities, while very little English is spoken in the more remote areas. Both countries have similar temperate climates, and both are quite beautiful. I honestly can’t think of a single good thing about Costa Rica that you can’t also find in Panama.

Now let’s talk about the differences, and they are significant:

Retiree incentives: Panama rolls out the red carpet for retirees, with one of the best benefit programs in the world ( Retirees can enjoy steeps discounts of up to 50% on everything from hotels and airfare to entertainment and healthcare. Costa Rica has no such program – retirees are not offered a single benefit, discount, or incentive of any kind.

For this reason alone, it amazes me that anybody would retire to Costa Rica. I have to assume that the only people moving to Costa Rica are the ones who simply have not done their research.

Roads: Costa Rica is famous for its bad roads, and they are terrible. Some of the main roads are so bad that they are nearly impassable. Panama’s main roads are all paved and relatively pothole-free .President Martinelli has made a major road building commitment throughout the country, which has already resulted in an even better road system.

Cost of goods: Panama is a big winner here. Thanks to the Panama Canal and its huge port, manufactured goods are much less expensive in Panama. Household appliances, electronics, building materials, almost everything is more expensive in Costa Rica. I haven’t had any experience buying cars in Costa Rica, but I’ve heard from reliable sources that Costa Rica has a huge tax on automobiles that I know for a fact Panama doesn’t have. Apparently a $20,000 car in Panama would cost around $35,000 in Costa Rica.

Currency: Again, Panama comes out ahead. The official currency in Panama is the Balboa, which is tied directly to the U.S. dollar. The paper money (one dollar bill and up) is all U.S. currency, and there is no exchange rate. The currency in Costa Rica is the colon, and exchange rates fluctuate on a regular basis. You need to constantly change your U.S. money into colones, bring a calculator everywhere you go, and always be aware of locals trying to take advantage of you. Financial transactions of any kind are much easier in Panama.

Capital Cities: When you fly into San Jose, Costa Rica, it feels like you’ve landed in a third world ghetto, but when you fly into Panama City you feel like you’ve arrived to a modern, cosmopolitan metropolis. It’s really about that simple – the difference between the two cities is staggering. San Jose is a dirty, dangerous place with about four street signs in the entire city. Panama City has dozens of gleaming new skyscrapers and is in an obvious phase of progressive expansion. One reason that Panama City is light years ahead of San Jose is the fact that the U.S. was actively involved in the Canal until 1999, so the infrastructure is surprisingly modern. It’s not a coincidence that a Trump Tower is going up in Panama City, but not in San Jose.

On a side note, I have found the people in Panama City to be much friendlier and more helpful than those in San Jose.

Crime: No contest here; Costa Rica has a much higher rate of crime. Armed robberies, carjackings and other violent crimes occur far more frequently in Costa Rica. In 2007 the U.S. State Department designated Costa Rica as a “high crime rate country” for tourists ( ). While these crimes do occur in Panama, the incidence is much lower and they occur primarily in the Canal Zone, between Panama City and Colon. I’ve been living part time in Santiago (three hours west of Panama City) for over two years, and nobody I’ve talked to has ever heard of a murder, armed robbery, or even a mugging. I’ve left tools and work boots outside of my house for weeks at a time, and I’ve never had anything stolen. This would be unheard of in Costa Rica, where theft is a common, everyday occurrence.

Real Estate: Let’s save the best for last; you can purchase land in Panama for a fraction of what it would cost you in Costa Rica. For example, the same five acre mini ranch with ocean views and riverfront that I’m selling in Panama for around $90,000 would cost more than $500,000 in Costa Rica. Land in Costa Rica is roughly five times more expensive than comparable land in Panama.

Another big difference between the countries involves squatters. In Costa Rica if you buy land and squatters move onto it, in three months they actually have legal rights to your property, and protracted legal action is required to get rid of them. Incredible, but true. In Panama, squatters have no legal rights of any kind. If you buy land in Panama, leave it alone for ten years, and upon your return people are living on it, you can have them removed immediately.

Having spent about half of my time in Panama over the last two years, I was initially puzzled by the fact that the interior of the country is so far behind Costa Rica in terms of real estate development. It is a vastly superior country to Costa Rica (for the aforementioned reasons), and when I started inquiring as why this was the case I kept getting back a one word response – “Noriega.” Up until 1990, when he was forcefully removed from power, Noriega had a stranglehold on the country, and he allowed very little development from outside investors. That was only 20 years ago, and Panama has been catching up ever since.

There are some popular, well developed places in Panama. Panama City itself (as well as the entire Canal Zone), Valle de Anton, and Boquete are probably the better known areas. They all have large “gringo” communities, and prime land is often well in excess of $100/meter squared (the way land is measured in Panama).

In my opinion, by far the best area in Panama in terms of future growth potential is the western slope of the Azuero peninsula. Located on the Pacific side of Panama about three hours from Panama City, there is a new (completed four years ago) paved road that runs the entire length of the coastline, ending at the Cerro Hoya National Park. The land is beautiful, the views are outstanding, and it is very early in the development cycle. At present there are no large projects in the area, but there will be. I believe that marinas, hotels, large housing projects, etc will all happen in the next several years.

One can look at Ocean Ridge Estates to get a feel for the low prices that are available in the area. I have 16 mini ranches between 3 and 12 acres, most of which have riverfront and ocean views. The purchase price of $5.00/meter squared includes water, electric, a road to each lot, and full title, as well as any assistance needed in the building of a house. This is one of the best values in Panama, if not the best.

I think the facts speak for themselves. If you visit both countries you’ll find out for yourself that Panama is far superior to Costa Rica for many reasons. Do your research, and you should come to the conclusion that Ocean Ridge Estates on the Azuero peninsula is one of the best values in the entire country of Panama. Visit to find out more.

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