LEGAL INFO

Caution: These notes are for your information only. Please seek legal advise before buying properties.

Anyone can buy and fully own property without being a resident or a citizen of Panama. You just need to show your passport upon purchase. You can sell your property whenever you want or leave it as an inheritance. There are no capital gains taxes and there are no limits on the amount of US dollars you can take out of your bank account in Panama.

Here are the steps to purchasing property:

STEP 1: AGREEMENT AND RESEARCH

You have found your property and have agreed on a price with the owner. Next, you inspect the title (Escrituras). This document states the owner and description of the property. The seller has to provide you with a survey describing the size and its location.
You also request a recent "Certificado de Registracion" which is similar to a title search in the USA. This document will indicate if there are any liens or other legal complications against the property. All documents must be originals and have the signature and stamps from the registration office. At the end of this step, you have confirmed the owner of the property and its location, and you have determined there are no existing liens or other legal problems against the property.

STEP 2: BILL OF SALES & SALES TAXES

The seller and the buyer, or representative agent go to the nearest city and obtain a form for a Bill of sale. This document lists the seller and the buyer and is used for sales taxes purposes. It is common practice to declare the sale price of the property at a lesser price than the amount paid. This is for two reasons: Firstly to keep the sales taxes low and secondly to keep them less than the $20,000 for tax exempt status (taxes under this amount have never been assessed to anyone). You will receive a receipt and a copy of the form. Then you go the nearest Notary Public with your representative agent and the seller to transfer the property title.

STEP 3: TITLE TRANSFER

This transaction is done through a Notary. A Notary Public in Panama is granted much more responsibilities than a US notary. Government appointed Notary Publics are high-ranking officials who have the final authority in regards to any legal transactions.
Having said that, the buyer or its agent presents the old title, all previous land documents and the new tax form to the Notary. The Notary takes all the appropriate data, and records the new title with the new owner's name, the seller, a description of the property, and any special terms that may apply. These documents then go into the Chief Notary's office for final approval.

STEP 4: TRANSFER OF FUNDS FOR PURCHASE

Once the chief Notary has signed these documents, the funds are transferred. Payment is preferable by a certified check on a bank in Panama. If a third party is involved, then any commission or service charge in the form of a certified check is also to be made.
In some cases, buyers will not wire any funds prior to completing steps 1,2 and 3. But they will have to make a deposit, 3% to 5% of the purchase price, and the buyer and the seller must sign a document stating that the balance is due upon completion of steps 1,2 and 3. The buyer gives the authorization to the bank to disperse the remaining balance.
Banks are very thorough and will double check all documents before turning over the balance.

STEP 5: THE NATIONAL REGISTRY

The transfer of property documents must be presented to the National Registry and duly recorded. This process takes several weeks but can be expedited by presenting the documents in person (or by an agent) to the main office of National Registry in Panama City. Once you have the title in your hands with all the appropriate signatures and stamps, it is yours.

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