Mexico vs Panama – Detailed Comparison For Expats & Retirees
Both Mexico and Panama are appealing choices for expats and investors looking for a place to relocate and live a good life in Latin America – warm weather, beautiful landscapes, a rich and abundant culture as well as friendly locals are just a few of the amazing benefits both nations have to offer. However, each country has its own individual set of advantages as well as some drawbacks that should be carefully considered before making a decision. In this article, we will delve deeper into the topic and look at the most important factors to keep in mind when choosing between Mexico and Panama as your next residence.
These factors include cost of living, real estate investment opportunities, healthcare, education, geography, landscape & location, culture & language, economy, political environment & overall security, as well as different retirement options. Before we start though, let us have a quick look at demographics and population size – for the long term planners among us, looking at this kind of information is of key importance!
Panama today has about 4.5 million citizens and the median age is 30, with a reproduction rate of 2.51 children per woman. Mexico, on the other hand, has 130 million people living within its borders and the median age is 29, with a reproduction rate of 2.4. According to WorldPopulationReview, both countries still have one or more generations left before population size is considered to reach its peak – in Mexico, that year is 2050, for Panama it is 2085.
Location & Landscape
When choosing between Mexico and Panama as your future home, location and landscape are key factors to consider. Mexico is further North than Panama and shares borders with the United States, Guatemala, and Belize. Mexico is famous for its diverse terrain, including pristine beaches, deserts and beautiful mountain ranges, as well as dozens of ancient temple sites you can visit. The nation offers a wide range of outdoor activities and tourism opportunities and in recent years, Mexico has become increasingly attractive as a tourist destination – especially the Caribbean coast of Mexico with cities like Tulum or Cancun.
Panama is strategically located between Central and South America and the Panama Canal acts as the connecting link between the two of them. The country’s environment is extremely multifaceted, featuring tropical rainforests, hills & highlands, beautiful islands and beaches. Tourists and expats alike are drawn to Panama’s picturesque landscapes, colonial architecture and cultural heritage. Both countries share the privilege of having Caribbean and Pacific coastlines and have become extremely popular tourist destinations as a result!
Cost Of Living In Mexico & Panama
Now, let’s compare the differing costs of living in both countries: Mexico in general is more affordable than Panama, especially when it comes to healthcare and housing options, as well as most goods and services within the country. While the cost of living in Panama might be slightly higher, there are several advantages for those willing to pay a little extra for a better standard of living, including promising business opportunities and a more stable societal & political system. However, just because life in Mexico tends to be more cost effective than life in Panama, it doesn’t mean that Panama is that expensive.
When compared to most Western countries for example, the cost of living – especially on the real estate side and when it comes to agricultural or animal products – is noteably lower in those two countries. When it comes to renting a property for example, average prices in Panama are about 25% less when compared to some Western European countries – in Mexico, that number is approximately 45%. Grocery shopping, public transport, recreational activities and restaurants tend to be more affordable in Mexico – closer proximity to the United States also reduces shipping costs for many imported products and the USMCA agreement between Mexico, the United States and Canada further helps in cutting expenses and boosting local production.
Cost of living in Panama has to be seen from the Panamanian perpective although – life here still is significantly more affordable than in Europe or North America! With better paying jobs and differing job opportunities – especially in the financial & legal industries sector – taken into account, the difference between the two countries begins to shrink.
Investing Into Real Estate
Real estate investment opportunities are another key factor to consider when comparing Mexico and Panama to one another. Both nations have a wide range of options, with a variety of property types available – ranging from beachfront properties and apartments in the city to countryside estates and farmland. With a steadily growing middle class as well as a thriving industrial sector, Mexico’s real estate market has remained relatively stable in recent years – making Mexico an attractive location for mid to long-term real estate investments. Just like Mexico, Panama’s real estate sector has been rapidly expanding, with the Panamanian government actively promoting the country as the perfect investment and retirement destination.
Panama’s low tax rates and booming economy also make it an interesting investment option for the years to come. Both nations still have a positive reproduction rate and growing population, constantly increasing demand for new real estate projects and affordable living space to be constructed. Real estate prices per square meter still are about 30% cheaper in Mexico, but the recent rate of growth has been more rapid than in Panama. Over the past decade, housing prices in both Mexico and Panama have been increasing at rates between 5% and 10% – and with many Western expats, investors and retirees continuing to invest into local real estate, that trend is going to continue!
What About The Economy?
Mexico boasts the second largest GDP in Latin America (second only to Brazil) and is known for its relatively stable economy and a growing middle class. The country also has a strong manufacturing sector and is a great access point for businesses looking to join the North American market. With average wages in Mexico still being quite low and at the same time having a skilled and educated work force, ever more companies are moving their production sites from China and East Asia to Mexico – this will play out as a major boost to the Mexican economy in the mid to long term!
The Republic of Panama is well regarded for its financial & legal services sector as well as its strong banking industry and trading capabilities. The country has a stable and growing economy, ambitious urban development & infrastructure projects and is a key player in global maritime trade & commerce – thanks to the Panama Canal. But not just that, Panama also offers some of the world’s lowest corporate tax rates and business friendly levels of regulation.
Panama’s strategic geographic location not only makes it the perfect place for maritime trade, but also for the aviation industry. It is centrally located between North and South America and serves as a hub for international travellers and business people. While both nations have their own unique economies and sources of income, one thing is for sure: they are both set for success.
Business & Job Opportunities
Business and job opportunities are important factors to consider when moving to a new country. Mexico’s economy is larger and more diverse than Panama’s, meaning there are more options for expats to choose from when looking for a job. Furthermore, Mexico’s strategic position near the USA and its cost effective manufacturing jobs make it an appealing option for companies that wish to expand on the continent and are in need of skilled workers. Meanwhile, Panama has a rapidly growing economy, a strong and well connected urban infrastructure as well as a strategic geographic position between the Americas, making it the perfect place for businesses operating in the aviation, financial services or logistics industry.
Further, low corporate tax rates as well as a maximum income tax of 25% make the country a desirable destination for businesses and investors looking for a prosperous future. So again, it all depends on your personal needs and preferences! With both nations being attractive tourist destinations, jobs in hotels, travel agencies or the tourist sector in general are plenty. Overall, skilled workers from abroad are welcomed in both Mexico and Panama, as they help the economy grow and bring foreign investment for the countries’ real estate sector.
Opportunities For Retirees
Retirement plans and opportunities should also be properly examined, especially when you have already left the active work force. Both nations provide seniors with a variety of options, including retirement communities and affordable long-term renting possibilities. Panama has extensively marketed itself as a retirement destination, even offering a special “Pensionado” Visa for foreign retirees. This Visa allows discounts on a variety of products and services, including healthcare, entertainment and recreational activities – Forbes Magazine even nominated Panama to be among the “Top 5 Retirement Havens” around the world.
Mexico, which has a substantial expat community and offers citizens a high standard of living, also has a number of exciting possibilities for retirees. However, pensioners should take adequate measures and stay informed about the local situation because Mexico has a far higher crime rate than Panama does – security concerned individuals might think twice before moving to certain parts of Mexico. Due to the relatively low cost of living in both countries, Western retirees can get significantly better services and quality of life for the same amount of Dollars – this is even more relevant today with pensions dropping to record lows in both the US and Europe.
Healthcare & Ensurance Plans
Healthcare & ensurance are important topics to think about when choosing a place to live. This might be even more of a priority for Europeans, as they are used to having high quality public medical care and ensurance for every citizen. When it comes to the topic of healthcare & medical aid, both Mexico and Panama offer good quality services to their people and have a number of local & international ensurance plans available to choose from. There are several private hospitals and clinics located in Mexico, many of which provide world-class medical care at a fraction of the cost when compared to the USA! Medical infrastructure is usually best in areas with the highest population density, like Mexico City, Guadalajara or Tijuana.
But not just Mexico, Panama has its own excellent healthcare system as well – including both public and private clinics and countless well equipped pharmacies across the country. Panama’s medical system (especially that in Panama City or David) is considered to be among the most advanced in all of Latin America – this is one of the many reasons why the tiny nation is able to attract such a substantial number of Western expats!
Public & Private Schooling Options
Yet another essential aspect to think about when deciding between Mexico and Panama is the topic of education – this might be even more important if you have school-aged children. Both countries have a wide variety of different options to choose from, including a number of public and private schools. Mexico has one of the most respected education systems in Latin America, with a wide array of schools and colleges – it also boasts a large number of international private schools for expats looking for a comparable education system to that of their home country.
Panama’s education system is also well respected, and it has a growing number of international schools offering high quality private education to the expat community and some locals – in Panama for example, it is absolutely no problem for your child to visit Oxford International School, Lincoln Academy or other prestigious institutions. As education can be seen as an investment into the next generation, it is wise to do the neccessary research yourself and act on your personal preferences.
Culture & Language
Culture and language are other major factors to consider when trying to decide, which country you should move to, as they are the foundation of a society. Both nations have a rich and complex cultural past, as well as a long tradition of hospitality and kindness toward foreigners. Mexico has a considerably large expat community, meaning that you will have lots of opportunities to engage with other foreigners and establish social connections – not only with locals. While Panama is still behind Mexico in regards to the number of expats living in the country, it is rapidly catching up. While Spanish is the main language used in both nations, English is spoken by many expats and locals alike. Expats may easily find Spanish classes and language courses to assist them integrate into the local society.
Both nations have been able to protect their native populations as well as keep the cultural diversity and heritage of their past alive until today. If you are interested in ancient civilisations like the Maya, Aztecs or Incas, Panama unfortunately does not have temple sites you could visit – Mexico, however has a lot to offer in that regard. Mayan history is still present in Mexico, as you can visit several ancient temples and ruins, for example the Pyramid Of The Moon, Chichen Itza and dozens of other architectural masterpieces from the distant past.
Political Situation & Security
When deciding where you want to live long term, political atmosphere and overall security are elements you should definetely consider. In recent time, Mexico has seen significant levels of crime and violence, particularly in certain areas of the nation where the cartels can operate almost unhindered. Although the government has been working to solve these problems, expats and investors should continue to exercise caution and stay informed about the local situation. It remains to be seen, what exact effect police and military may have in controlling this situation – in the past however, they seemed to struggle keeping up with the crime rate.
Panama, on the other hand, has a relatively low crime rate and is considered to be one of region’s safest places – Panama’s government has a zero tolerance policy towards organized crime and has carried out severe attacks against gangs, dismembering them completely in many areas. Furthermore, Panama has a more stable political atmosphere, lower levels of corruption and a government that encourages foreign investment. Due to its stability and overall better security, Panama has become a more appealing option for businesses and expats seeking a new home.
Mexico vs Panama – You Decide!
To summarize, both Mexico and Panama have their unique set of advantages for expats, retirees and investors – which country to choose should be determined by your personal needs and preferences alone. While the cost of living is generally lower in Mexico when compared to Panama, both nations are still very affordable in regards to Western standards. With Mexico’s population outsizing that of Panama by a factor of almost 30, certain public services and investment options might be more accessible and plenty – this changes however, when one lives in the metropolitan areas like Panama City or David, where living standards can be compared to the US and some other Western nations.
Business and job opportunities as well as retirement plans or Visas are given in both countries – while Mexico’s larger economy may make it easier to find a job right away, Panama’s business friendly regulations and tax incentives make starting and operating a business easy and effortless. With Panama’s economy relying more on foreign investment than Mexico’s does, it is clear to see why the Panamanian government makes immigration and investment into the country that attractive. To be honest, the nations’ healthcare and education systems might not be on Scandinavian standards yet, but they are still far ahead most other Latin American countries. If you prefer private education and healthcare anyways, you don’t have to worry about a thing, as both Mexico and Panama provide high quality services in these areas!
Culture and language are usually the biggest barriers of entry into a society, but in the case of Panama and Mexico, that’s not too big of a deal. Yes, you should have basic Spanish skills in both countries, but in the metropolitan areas you might get along with just English as well – especially in Panama, as a higher percentage of citizens is familiar with the language. In the rural areas however, it is always wise to have a translator app that works off-line as well. In the past, Latin America didn’t make the best headlines when it comes to security and crime rate – while today, this is more a Mexican problem than it is a Panamanian one, the Mexican government was able to push back on cartels and gangs in certain areas of the country. Popular tourist locations like Tulum or Cancun for example, are considered to be quite safe.
With both countries aiming to attract more expats and businesses from across the globe, the topic of security will remain a top priority for both governments in the future – and when looking at the past, significant progress has already been made. By carefully taking into consideration all the data provided to you above, we hope that you can make an informed decision about which country to choose! But before making a move, you should thoroughly research your options, as moving to another country or continent is no small decision. It is also vital to remember that both countries are constantly developing, so staying up to date about the current situation is crucial.