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Panama City, Panama

Best Places to Live Overseas: Panama vs. Mexico

By Betsy Burlingame


Summary: Deciding between Panama and Mexico? This article compares key factors such as cost of living, healthcare, ease of obtaining residency and more.

Deciding on a new home as an expat involves a complex jigsaw puzzle of factors such as climate, cost of living, healthcare quality, local attitudes, and immigration processes. Two options that consistently attract expats are Panama and Mexico. In this article, we'll cover key aspects of living in these countries to help you make an informed decision.

1. Climate

Both Panama and Mexico offer tropical climates but differ significantly in geographical variety. Panama, a narrow strip of land linking Central and South America, enjoys a hot and humid tropical climate year-round, with two distinct seasons: dry (mid-December to mid-April) and wet. Coastal living, the cool mountains of Boquete, or the cosmopolitan city life in Panama City each offer unique weather patterns.

Mexico, in contrast, boasts a vast range of climates due to its size and topography. Coastal towns like Puerto Vallarta and Cancun provide a tropical climate similar to Panama. But head inland, and you'll find temperate climates in cities like Guanajuato or San Miguel de Allende, and even cooler environments in mountainous regions.

A member in Panama City commented, "No doubt it's humid but the best months are from December to around April with almost no rain and windy so it's refreshing. Buildings look dirty because of humidity, there should be a law where buildings needs to be cleaned once in a while." "Volcan spring like weather all year around. Puerto Armuelles is hot and humid and your on the P.acific Ocean.," remarked another expat in Panama.

A member in Merida, Mexico wrote, "Hot. In the summer it is hot day and night, with no rain. In rainy season, it is very hot during the day but the nights usually cool off to pleasant 70's with a cooling wind, but not always. You can use sleeves at night but will not want them during the day." "Hot, hot, and hotter! Humid, humid, and humider! Well the high season between Dec and April is still pleasant and not as humid. Summer is a killer," wrote another expat in Playa Del Carmen, Mexico.

2. Cost of Living

The cost of living in both Panama and Mexico is generally lower than in the US or Europe, but there are differences. Mexico typically scores lower on cost of living indices. Rent, groceries, entertainment, and dining out can be significantly cheaper than in Panama, depending on the location. However, Panama's currency is the US dollar, providing a stable economic climate.

An expat living in Nueva Gorgona, Panama wrote, "A couple (renting) can live in a condo and a very comfortable lifestyle, eating out a time or two a week, for $2-2.5K/ month in this area or less depending on where you live. We are pretty spoiled." "Our situation on isla Solarte in Bocas is such that we can live comfortable spending $1500 a month. Renting an apartment in town and riding a bicycle can produce a similar situation. I have older, single friends who live in town who spend much less than we do," explained one member in Bocas del Toro, Panama.

"If one buys local or Mexican brands, food is relatively inexpensive. Eating out is 1/2 or less than in the U.S. The cost of living monthly is dependent on if you own a home and your lifestyle. We projected that we will save between $8 -10,000 annually by living here. Gone are the $150/mo. water and sewer bills and the $180 / gas and electricity. Every little bit of savings adds up," explained one expat living in Lake Chapala, Mexico. "Housing costs are definitely lower than in our home country (NTC), but given our limited Spanish, we feel we are definitely paying an expat premium. With that said, the apartment is furnished very nicely, has all the amenities and all utilities are included (yes, wifi also!). We are not too upset to pay a little more of a premium for a nicer place in an area better suited for our two dogs," said another in Oaxaca, Mexico.

Cost of Living Panama Mexico
Rent for a 1-Bedroom Apartment in City Centre $1,000 - $1,500 $500 - $800
Rent for a 1-Bedroom Apartment Outside of Centre $600 - $900 $300 - $500
Meal at an Inexpensive Restaurant $8 - $15 $5 - $10
Monthly Public Transportation Pass $30 - $40 $20 - $30
Monthly Utilities for 85m2 Apartment $100 - $150 $50 - $80
Groceries Index 50.2 34.7

3. Healthcare Quality and Access

Both countries have made significant strides in healthcare, but they offer different experiences for expats. Panama's healthcare system boasts high standards, with many doctors US-trained. Private healthcare in Panama City is on par with Western countries. However, it is pricier than Mexico's healthcare. Health insurance for expats is advisable, as access to Panama's public healthcare is challenging without permanent residency.

Mexico's healthcare system offers a blend of public and private providers. Quality of care varies, with top-tier private hospitals in cities like Mexico City, Guadalajara, or Monterrey, rivaling Western standards. Access to the public healthcare system, Seguro Popular, is available even to temporary residents at a very affordable cost.

4. Visa and Residency Process

Panama is known for its "Friendly Nations Visa," which makes it relatively straightforward for citizens of certain countries (including the US and most of Europe) to gain residency. Panama also offers the "Pensionado" (retiree) program, providing numerous discounts and benefits for retirees.

Visa/Residency Option Description Requirements
Friendly Nations Visa Intended for nationals from a list of "friendly nations". Economic or professional tie with Panama, Passport, Background check, Health certificate, Economic solvency proof
Pensionado (Retiree) Program For retirees who want to live in Panama. Minimum monthly income from a guaranteed lifetime pension or social security.
Professional Residence Permit For professionals in specific fields not already in abundance in Panama. University degree, 2 years of work experience, No criminal record, Health certificate
Self Economic Solvency Visa For those who want to retire or establish residency without working. Investment in real estate, a time deposit, or establish a business in Panama
Temporary Worker Visa For those who wish to work in Panama temporarily. Employment contract, Passport, Health certificate, No criminal record

Mexico's visa process is also relatively straightforward. Temporary residency can be granted for up to four years, after which one can apply for permanent residency. The process is easier for retirees, and there are financial requirements to prove sufficient funds or regular income.

Visa/Residency Option Description Requirements
Temporary Resident Visa Allows you to stay for up to four years. Proof of economic solvency, Passport, Application form
Permanent Resident Visa Allows you to stay indefinitely. Family ties or point system, Must have held Temporary Residency status for certain years
Student Visa For those who want to study in Mexico. Proof of acceptance into an educational institution, Proof of funds
Work Visa For those who have a job offer in Mexico. Job offer from a Mexican employer, Relevant qualifications
Retirement Visa For retirees who can demonstrate sufficient monthly income. Proof of retirement, Proof of regular income

5. Local Attitudes

Mexicans are globally renowned for their warmth and hospitality, which many expats find endearing. Cultural richness, manifested in food, festivals, music, and art, also fosters a sense of community. Expats often feel welcomed and included in local traditions.

A member in Mexico wrote, "We knew the culture and people would be wonderful and the climate is so much better than in beautiful Seattle. Our kids are scattered throughout the US and we travel back every few months and they come here. Just what we hoped for."

Panamanians are generally friendly and respectful to foreigners. The cosmopolitan nature of Panama City results in a multicultural environment, and English is widely spoken due to the city's international influence. Outside urban areas, expats may need a grasp of basic Spanish to communicate.

"Like most every place on earth the local population is welcoming to North Americans and anyone else for that matter as long as they are respectful and don’t look down on them. Most people who move to Panama bring with them a desire to contribute as much or more as they take, this is the formula for long term success," wrote one member in Panama. Another added, "Panamanians generally are good humoured, friendly, contented, open-minded people if you treat them with respect. That includes speaking to them in Spanish."

Panama vs. Mexico: A Comparison of Key Factors

Panama Mexico
Cost of Living Moderate to high, depending on area (urban areas tend to be more expensive). Generally lower than Panama, varies by region.
Taxes Territorial tax system. No tax on foreign-sourced income. Resident individuals are taxed on their worldwide income, non-residents on their Mexican-source income.
Climate Tropical climate, with a wet and a dry season. Varies widely, from tropical beaches to arid deserts and temperate highland areas.
Ease of Obtaining Residency Friendly Nations Visa and Pensionado program make it relatively easy for many people. Temporary and permanent residency available, somewhat easier for retirees and those with family ties in Mexico.
Easiest Visa to Obtain Friendly Nations Visa. Temporary Resident Visa.
Access to Quality Healthcare High quality in urban areas, especially Panama City. Lower quality in rural areas. High quality in major cities. Public healthcare system accessible but varies in quality.
Quality of Public Healthcare System Good, but accessibility can be limited for non-residents. Good, with coverage for temporary residents through Seguro Popular.
Ability of Expats to use the Public Healthcare System Can be challenging without permanent residency. Available to even temporary residents at very low cost.
Best Places to Live Panama City, Boquete, Coronado, Pedasi. Mexico City, San Miguel de Allende, Merida, Puerto Vallarta, Guadalajara.
5 Biggest Cities Panama City, San Miguelito, Tocumen, David, Arraijan. Mexico City, Guadalajara, Monterrey, Puebla, Toluca.
Best Coastal Places to Live Bocas del Toro, Coronado, Pedasi. Puerto Vallarta, Cancun, Playa del Carmen, La Paz.
Best Places for Expat Families to Live Coronado, Panama City, Boquete. San Miguel de Allende, Merida, Mexico City (in select areas), Chapala.

In conclusion, your choice between Panama and Mexico should hinge on what matters most to you. If geographical diversity, lower living costs, and access to affordable healthcare appeal to you, Mexico could be a great choice. If stability, high-quality healthcare, and an easy pathway to residency are your priorities, Panama might be the better fit. Ultimately, both countries offer vibrant cultures, welcoming communities, and a high quality of life, making either a fantastic choice for expats.

About the Author

Betsy Burlingame Betsy Burlingame is the Founder and President of Expat Exchange and is one of the Founders of Digital Nomad Exchange. She launched Expat Exchange in 1997 as her Master's thesis project at NYU. Prior to Expat Exchange, Betsy worked at AT&T in International and Mass Market Marketing. She graduated from Ohio Wesleyan University with a BA in International Business and German.

Some of Betsy's articles include 12 Best Places to Live in Portugal, 7 Best Places to Live in Panama and 12 Things to Know Before Moving to the Dominican Republic. Betsy loves to travel and spend time with her family. Connect with Betsy on LinkedIn.

First Published: Jun 15, 2023

Panama City, Panama

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