Why Smart Expats Never Buy Panama Real Estate in Their Own Name (And What They Do Instead)

Here's the thing nobody tells you until it's too late: when you buy property in Panama under your personal name, you're setting yourself up for a expensive do-over. If you later decide to transfer that property into a corporation for business purposes or a private foundation for estate planning, you'll pay transfer taxes PLUS capital gains taxes - potentially 5% or more of your property's value.

Nalini Navarro has seen this scenario play out hundreds of times in her 20+ years practicing law in Panama. Expats get excited, find their dream condo or mountain retreat, close the deal in their name, and six months later realize they need asset protection or want to leave the property to their kids without the nightmare of Panamanian probate.

'We have met clients that said that they have come here to Panama, they buy the property on their personal name, and then they have to transfer it to a corporation if they want to do business or they have to transfer it to a private interest foundation if they're planning to do asset planning, and then they have to pay like 5% on taxes because you have to pay transfer tax and then you have to pay capital gain tax,' Navarro explains in the latest Pana'Gringo podcast episode.

The solution? Structure it correctly from the beginning. It takes the same amount of time to close a property in a foundation or corporation as it does in your name, but the long-term benefits are absolutely game-changing.

If you're American, Canadian, or European, think of a Panama private interest foundation as a hybrid between a trust and a corporation - except it's specifically designed for asset protection and estate planning, and it's incredibly powerful.

Here's what makes private foundations so brilliant for Panama real estate:

Probate Elimination: When you pass away, Panama probate can drag on for one to two years (sometimes longer, depending on the judge's caseload). Your heirs are stuck waiting, unable to access or sell the property. With a private foundation, your designated beneficiaries receive the asset immediately - no courts, no delays, no drama.

Customizable Bylaws: This is where it gets really interesting. You can write rules that match your family's needs. Want your 22-year-old son to inherit your beach house but not be able to sell it until he's 30 and has a stable career? Done. Want to ensure your daughter finishes college before accessing her inheritance? Write it into the bylaws.

'In the bylaws, you can establish different rules. Like for example, you can say like, okay, my kid is under 18 years old and he won't have this asset transfer until he's 25 years old and he finishes college or if he has a regular job. I mean, many ideas because it's tailor made to your needs,' Navarro explains.

Tax Efficiency: Foundations are tax-neutral vehicles in Panama. You're not creating additional tax obligations - you're simply creating a protective structure around your asset.

Privacy Protection: Unlike personal ownership where your name appears in public registry records, foundations provide an additional layer of privacy for your real estate holdings.

The process is straightforward: Navarro Guardia Law Firm drafts the foundation documents, you appoint yourself as the principal beneficiary (so you maintain complete control during your lifetime), name your children or other heirs as secondary beneficiaries, and transfer the property into the foundation's name. Total setup time? Usually 2-3 weeks.

Private foundations are perfect for personal real estate and estate planning, but they have one limitation: they cannot conduct business operations. If you're buying a hotel, vacation rental property, restaurant, or any income-generating asset, you need a corporation.

But here's the insider strategy that separates smart investors from everyone else: use BOTH.

Nalini's firm regularly structures deals where a private foundation owns the property (the valuable asset) and then rents or leases it to a corporation that operates the business. Why? Liability protection.

'If Sue Happy Sally from San Francisco, California, drinks a little too much wine, falls down the stairs, and wants to blame the property, she can sue the corporation, but the corporation doesn't own the property, so it's protected,' explains Austin Hess, COO of DoPanama, describing this dual-structure approach.

This structure protects your real estate asset from business liabilities while still allowing you to operate commercially. The foundation remains the owner, your heirs are protected, and your business operates through a separate legal entity.

For expats buying hotels, guesthouses, or rental properties in hot markets like Boquete, Coronado, or Bocas del Toro, this two-entity structure is becoming standard practice. It adds minimal cost but provides maximum protection.

Austin Hess has been in Panama for 14 years, and he's known Nalini Navarro for 12 of those years. When he launched DoPanama Real Estate & Relocation coming out of the pandemic, partnering with Navarro Guardia Law Firm wasn't just a business decision - it was the foundation of DoPanama's entire client-first philosophy.

'One of the things that really attracted me to Nolini, her law firm beyond her education, her professionalism, her team's professionalism is her ethics,' Hess shares. 'When we started DoPanama, we want to help expats like yourself move to Panama and do it at ease and with enjoyment. This should be an exciting time in most people's lives.'

What makes this partnership unique is the integration. DoPanama isn't just a real estate brokerage that refers you to a lawyer after you've found a property. The legal planning happens BEFORE you start property shopping, so you're structured correctly from the very first offer.

Here's what the full-service experience looks like:

Strategic Planning Session: Before you ever look at listings, you meet with Navarro's team (free consultation for DoPanama clients) to discuss your goals. Are you retiring? Starting a business? Buying rental properties? Each scenario requires different legal structures.

Coordinated Timeline: Instead of making 5-6 separate trips to Panama (expensive and exhausting), DoPanama and Navarro Guardia coordinate so you can handle your property purchase, residency application, bank account opening, and legal structures in ONE trip.

Asset Protection Planning: The legal team helps you understand whether you need a foundation, corporation, or both, and drafts everything to your specifications before closing.

Post-Purchase Support: Need to rent your property? They connect you with property managers. Hate the kitchen tile? They have trusted contractors. Moving your dog? They handle pet relocation too.

Nalini's perspective is especially valuable because her husband is Polish - she's personally experienced what it's like to help someone navigate a new country's systems. 'I can understand an expat moving to another country like ours. You don't know anybody, it's a different culture. I experienced that with my husband,' she shares. That empathy translates into client service that's genuinely focused on smooth landings, not just transactions.

While Navarro Guardia Law Firm specializes in corporate and real estate law for expats, their full-service approach means you're covered for the unexpected stuff too.

Running a business and having employee issues? They have a labor law department. Contract dispute with a vendor? Their litigation team handles it. Bought a yacht and need maritime registration? They've got maritime law specialists on staff.

This comprehensive approach is especially valuable as your Panama life evolves. Maybe you arrive as a retiree buying a condo, but two years later you're opening a coffee shop in Boquete or investing in a real estate development in Coronado. Your legal team already knows you, understands your asset structure, and can seamlessly add new entities or services as your needs grow.

'We give full legal service in our law firm. We specialize in corporate areas, but if you have like conflict with one of your clients, we have a litigation department as well. We have an attorney that deals with everything related to maritime law,' Navarro explains.

For expats who eventually want to develop property - and Panama's booming real estate market is creating more of these opportunities - Navarro Guardia can structure the entire development from land acquisition through construction contracts to sales.

The firm's 20 years of experience means they've seen every scenario: the retiree who becomes an entrepreneur, the investor who decides to get residency, the snowbird who falls in love and moves permanently. That institutional knowledge is invaluable when you're making major life and financial decisions in a foreign country.

Let's talk about the practical stuff that makes Panama work so well for expats from North America and Europe.

Banking System: Panama's banking sector is rock-solid, and it uses the US dollar as its official currency (the Panamanian balboa exists but is pegged 1:1 to the dollar). 'We have an excellent banking system. Transferring money to Panama is easy. It's safe. We don't have any types of problem with that,' Navarro notes. For Americans especially, this eliminates currency risk and makes financial planning straightforward.

Safety Factor: This is huge for families. Panama City and expat communities like Boquete, Coronado, and Bocas del Toro are considerably safer than many US cities. Austin Hess, who has kids, puts safety at the top of his list: 'Having that safety for not only ourselves, but our children is the top of my list.'

Time Zone Alignment: If you're from North America, you're on the same time zone. No 3am calls to handle business back home. No missing your grandkids' video calls because of weird scheduling.

International Schools: Panama City has world-class international schools including International School of Panama, Balboa Academy, and Metropolitan School of Panama. These schools offer American, British, and International Baccalaureate curricula.

Healthcare: You can get excellent private healthcare in Panama for a fraction of US costs. Hospital Punta Pacifica in Panama City is affiliated with Johns Hopkins, and Chiriquí has modern facilities serving the Boquete expat community.

Geographic Diversity: Here's something Austin emphasizes that really resonates: you don't have to choose just one lifestyle. 'I love living in the city, and people say, well, you know, I can't decide if I want to live in the city or go to the beach towns or I want to be in the mountains. It's like all of these places are so close.' You can live in Panama City and spend weekends in the mountains or at the beach - everything is 1-4 hours away.

The expat community itself creates a network effect. Austin mentions knowing Nalini for 12 years, and describes Panama's expat scene as 'like a high school campus - such a close-knit community.' That social infrastructure makes the transition so much easier than moving to a place where you're completely isolated.

So you're interested in Panama - maybe you're dreaming of mountain views in Boquete, beach access in Coronado, or cosmopolitan living in Panama City. Here's exactly how to move forward:

Step 1: Take the Relocation Survey - DoPanama offers a free 23-question survey that takes 3-5 minutes. It covers your lifestyle preferences, budget, climate preferences, and priorities. This helps Austin's team understand what regions make sense for you.

Step 2: Free 30-Minute Consultation with Austin - After you complete the survey, you'll get a complimentary Zoom call with Austin Hess himself. He's visited virtually every expat-friendly area in Panama hundreds of times over 14 years. He'll give you honest insights about which areas match your lifestyle and connect you with the right team members.

Step 3: Free Legal Consultation with Navarro Guardia - All DoPanama clients get a complimentary consultation with Nalini's law firm. This is where you discuss whether you need a foundation, corporation, or both, and start planning your asset structure BEFORE you start shopping for properties.

Step 4: Property Search with 147+ Affiliate Network - DoPanama has the largest real estate network in Panama. You're not limited to one agent's listings - you get access to properties from over 147 affiliates across the country, from Panama City to David to Bocas del Toro.

Step 5: Coordinated One-Trip Closing - This is the magic. Instead of multiple expensive trips, DoPanama and Navarro Guardia coordinate your entire process: property closing, legal entity formation, bank account opening, residency application (if applicable), and even contractor meetings if you want renovations.

Step 6: Full Relocation Support - Need to move your pets? They handle it. Looking for schools? They have connections. Want to meet doctors or dentists before you move? They'll set up appointments. Need a contractor to redo that bathroom? They have trusted referrals.

To get started, visit dopanama.com, or reach out directly via WhatsApp at +507 6443-3341. The office is located in the Waldorf Astoria Hotel in Panama City - yes, they maintain their operations in one of the most prestigious addresses in Central America, which tells you something about their caliber.

Remember: mention you saw this article to ensure you get the free legal consultation with Navarro Guardia Law Firm. That alone could save you thousands in avoided mistakes.