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Panama prices its economy in US dollars, taxes companies only on Panamanian-source income, and sets minimum wages by decree each year. For a business owner relocating with a new company, those facts shape two budgets. The cost of living in Panama runs from about $2,000 a month for a single founder in Panama City to $5,000 for a family in a business district. The company's costs run alongside, with salaries against a $1,100 to $1,500 formal-sector average and employer charges of up to about 19 percent.
Both budgets follow, with 2026 figures for Panama City, six regional towns, payroll and premises.
Cost of Living in Panama City for a Founder
Panama City is where most companies are formed, banked and run, and the cost of living Panama City carries is the highest in the country.
How Much Is Rent in Panama City
Rent is the largest line in any cost of living Panama budget and the one that varies most. A one-bedroom in the business districts of Costa del Este, Punta Pacífica and Avenida Balboa runs $1,200 to $1,800 a month in a newer tower. The same apartment in the older residential districts of Bella Vista, El Cangrejo and San Francisco runs $900 to $1,200. The city average for a one-bedroom is about $1,100. If you bring a family, a two- or three-bedroom in the waterfront districts runs $1,500 to $3,000.
| Panama City, monthly | Business districts | Residential districts |
|---|---|---|
| One-bedroom apartment | $1,200 to $1,800 | $900 to $1,200 |
| Two- to three-bedroom apartment | $1,500 to $3,000 | $1,250 to $1,950 |
| Utilities with air conditioning | $100 to $150 | $100 to $150 |
| Internet, 60 Mbps or more | About $50 | About $50 |
| Mobile plan with data | About $30 | About $30 |
Most leases you sign run a year and ask for one or two months' deposit. Electricity is the utility that moves, because air conditioning in a tower with glass walls doubles the bill in the dry season.
Panama Living Expenses Beyond Rent
Panama City cost of living beyond rent is moderate for a capital. If you cook at home, you spend $200 to $350 a month on groceries as one person, mixing local produce, rice, chicken and some imported goods. A couple spends $350 to $550. A local lunch is $6 to $12, a restaurant dinner for two $40 to $80, and an Uber across the city $3 to $6. Private health insurance is available to you under $200 a month if you apply before 64, and a specialist visit costs $50 to $80. A private clinic charges a fraction of North American rates for the same tests.
- Groceries: $200 to $350 for one, $350 to $550 for a couple
- Eating out: $6 to $12 for a local lunch, $40 to $80 for dinner for two
- Transport: $3 to $6 per Uber ride, $30 to $50 a month on the Metro and buses
- Private health insurance: under $200 a month if you enrol before 64
- Gym, entertainment and miscellaneous: $150 to $300
A Founder's Monthly Budget in Panama City
Cost of living in Panama for a single person in Panama City runs about $1,700 to $2,200 with a residential-district apartment. In a business district it runs $2,000 to $2,800, all in. Cost of living in Panama for expats bringing a family runs $3,500 to $5,000 with a three-bedroom, private schooling excluded. Both figures are before your company's own costs, which the next section covers. Most living in Panama cost of living tables stop here, and yours cannot.
| Monthly budget, US dollars | Single founder, residential district | Single founder, business district | Family of four, business district |
|---|---|---|---|
| Rent | $1,000 | $1,500 | $2,500 |
| Utilities, internet, phone | $200 | $220 | $280 |
| Groceries | $280 | $280 | $650 |
| Eating out and transport | $250 | $350 | $500 |
| Health insurance | $150 | $150 | $500 |
| Other | $150 | $250 | $400 |
| Total | About $2,030 | About $2,750 | About $4,830 |
The average cost of living in Panama for a founder therefore sits between a mid-sized US city and a European capital. Rent decides which.
Panama Cost of Living for a Company: What Your Business Pays Every Month
The company you form has its own fixed costs from the day it is registered and its payroll once it hires. The space decision is usually the smallest of the three.
The Fixed Costs of Keeping the Company Alive
A Panamanian corporation carries a set of annual charges whether it trades or not. A missed deadline turns them into penalties and a company that cannot obtain a certificate of good standing.
| Fixed cost | Amount | When |
|---|---|---|
| Annual franchise tax, the tasa única | $300 | July 15 or January 15, by incorporation date, with a $50 late fee |
| Resident agent | $300 to $800 a year | Annually, often included in the first year |
| Notice of operations tax | 2 percent of net worth, minimum $100 and maximum $60,000 | Annually, for a company operating in Panama |
| Bookkeeping and accounting | $100 to $500 a month, by transaction volume | Monthly, with the corporate return due March 31 |
| ITBMS registration and filing | 7 percent on local sales once turnover passes $3,000 a month or $36,000 a year | Monthly returns once registered |
| Nominee directors, if used | $300 to $500 a year each | Annually |
For a small company with no local sales, the fixed annual cost runs $1,500 to $3,000 including the accounting. A company selling into Panama adds the notice of operations tax on its net worth and the ITBMS filings, and municipal taxes in the district where it operates.
Average Salary in Panama and the 2026 Minimum Wage
Executive Decree No. 13 of December 31, 2025 set the 2026 minimum wages, in force from January 16, by sector and by region, with Panama City and its province in Region 1. The rates are hourly, from about $2.55 to $3.47 an hour depending on the activity and the size of the company. That is roughly $530 to $720 a month for a full-time worker. The average salary in Panama for formal employment is $1,100 to $1,500 gross a month. The average wage in Panama City runs 10 to 25 percent above the rest of the country.
| Role in Panama City, monthly gross | Junior | Mid-level | Senior |
|---|---|---|---|
| Administrative and customer service | $700 to $1,000 | $1,000 to $1,500 | $1,500 to $2,200 |
| Sales and account management | $900 to $1,500 plus commission | $1,500 to $2,500 plus commission | $2,500 to $4,000 plus commission |
| Software and IT | $1,500 to $2,500 | $2,500 to $4,000 | $4,000 to $6,000 or more |
| Project management | $1,800 to $2,800 | $2,800 to $4,000 | $4,000 to $6,000 |
Bilingual staff command a clear premium, and banking, insurance and logistics pay above the bands. You also pay a thirteenth month, the décimo tercer mes, which is mandatory and paid in three instalments, so an annual salary is 13 months of pay.
What an Employee Costs You
On top of the gross salary, you pay social security at 12.25 percent and the educational insurance levy at 1.5 percent. Workplace accident insurance adds 0.56 to 5.67 percent by occupation. Together they run up to about 19 percent of pay. The employee's own contribution of 9.75 percent is withheld from the salary. A $1,500 a month employee therefore costs you about $1,780 a month plus the thirteenth month, before benefits or severance.
- Employer social security and levies: up to about 19 percent of gross pay
- Thirteenth month: one twelfth of annual pay, in three instalments
- Vacation: 30 days after 11 months of continuous work
- Severance and seniority premium: accrued under the Labour Code and paid on termination
- Work permits for foreign staff: a separate immigration cost, and a 10 percent cap on foreign employees in most companies
Company Formation in Panama registers the company with the social security fund and sets up payroll to the decree rates and the thirteenth month. Your first hire is then costed correctly before the offer goes out.
Space, Banking and the Other Lines
If you work alone or with a remote team, you need a desk, not a lease. A coworking desk in Panama City runs $150 to $300 a month and a private office for two to four people $600 to $1,200. A Class A lease in Obarrio, Costa del Este or Punta Pacífica runs roughly $18 to $28 per square metre a month. If your business is international, you can hold a registered office through your resident agent and no physical office at all.
- Corporate bank account: opening balances and monthly fees vary by bank, and the opening itself takes weeks of due diligence
- Business insurance: liability and property cover priced on the activity
- Software, telecoms and internet: $100 to $300 a month for a small team
- Legal and compliance: the annual accounting records every company has to keep and supply to its resident agent
- Your own residence permit: an immigration cost that sits with you rather than the company, and is budgeted before you arrive
Take a two-person international business with one local hire at $1,500, a coworking desk and standard accounting. Its first-year company budget runs about $30,000 to $35,000 before your own living costs.
Cost of Living in Panama Outside the Capital: Boquete, Coronado, Bocas, David, Las Tablas and Volcán
Your company can be run from anywhere in Panama with an internet connection, and many founders live outside the capital. The savings come with trade-offs in distance and services.
Cost of Living Boquete Panama
Boquete is the mountain town in Chiriquí that draws the largest expat community. A one-bedroom rents from about $750, and a three-bedroom house from about $800, often with water and internet included. Groceries and dining cost less than the capital, and utilities cost less because there is no air conditioning to run. A single person lives well on $1,500 to $2,000 a month. The trade-off is distance, with David 45 minutes away and Panama City a flight or a seven-hour drive from you.
Cost of Living in Coronado Panama
Coronado is the beach town 90 minutes west of the capital where founders who need the city weekly tend to settle. A one-bedroom in the centre runs about $760 and a three-bedroom about $1,250, which is roughly 30 percent below Panama City. You budget $1,600 to $2,100 a month as a single person, and the drive to a Panama City meeting is a routine one.
Cost of Living in Bocas del Toro, David, Las Tablas and Volcán Panama
The four remaining towns are an island, a regional city and two interior towns.
| Town | One-bedroom rent | Single person, monthly | What it is |
|---|---|---|---|
| Bocas del Toro | $600 to $1,200 | $1,600 to $2,200 | Caribbean island archipelago, tourism economy, higher food costs because everything arrives by boat |
| David | $400 to $700 | $1,200 to $1,600 | Chiriquí's regional capital, hospitals, an airport and the cheapest city living in the country |
| Las Tablas | $400 to $700 | $1,100 to $1,500 | Azuero peninsula town, slow pace, little English spoken |
| Volcán | $500 to $800 | $1,200 to $1,700 | Highland town near Boquete with a cooler climate and lower rents |
Cost of living in Bocas del Toro Panama is the exception in the regions, because island logistics push food and utilities toward capital prices. Cost of living in David Panama, cost of living in Las Tablas Panama and cost of living in Volcan Panama are the lowest in the country. Each is a reasonable base if your clients are abroad.
Is Panama Expensive to Live in for a Founder
Whether Panama is cheap or expensive depends on what you compare it with and where in it you live.
Panama Standard of Living and Living Conditions
Panama standard of living in the capital is high by regional measures. The country's GDP per capita is above $20,000 and the currency is the US dollar with no exchange risk. The Metro carries 420,000 people a day across two lines, and private hospitals in Panama City include a Johns Hopkins affiliate. Panama living conditions outside the capital are simpler, with slower internet in the interior, fewer English speakers, and services that depend on the nearest regional city.
- Currency: US dollar, no exchange controls
- Healthcare: private hospitals at a fraction of US prices, with insurance under $200 a month for younger applicants
- Transport: Metro and buses in the capital, a car needed almost everywhere else
- Safety: the capital's business and residential districts are calm, and the interior towns are quiet
- Language: Spanish, with English common in business and rare in the interior
What Is It Like to Live in Panama as a Business Owner
What it is like to live in Panama as a founder is a dollar economy with a territorial tax system. A company earning abroad pays no Panamanian income tax on that revenue, and that is what's it like living in Panama on the company's side. Your days are long and hot in the city, and the rainy season from May to December shapes your calendar. The banking is conservative, so opening your company account is a process rather than a formality. Your resident agent and accountant are the people you speak to most.
Is Panama Cheap Compared With Where You Are Now
Is it cheap to live in Panama depends on where you are moving from, because Panama living cost is a relative figure. Against Miami, Toronto or London, rent and healthcare are markedly lower and groceries similar. Against Costa Rica, Panama is 10 to 15 percent cheaper, and against Nicaragua or Colombia it is dearer. Against most of the United States and Canada, cost of living in Panama in US dollars is lower in every category except imported goods and cars.
| Compared with | Rent | Groceries | Healthcare | Overall |
|---|---|---|---|---|
| Miami | Lower | Similar | Much lower | Lower |
| Costa Rica | Lower | Similar | Lower | 10 to 15 percent lower |
| Mexico City | Higher | Higher | Similar | Higher |
| Colombia | Higher | Higher | Similar | Higher |
Build the Two Budgets Together Before You Form the Company
The cost to live in Panama and the cost to run your company there are decided by two choices, where you live and who you hire.
- Choose the district before the apartment, because it moves your rent by $500 a month and your staff's expected pay by 10 to 25 percent
- Cost each hire at 13 months of salary plus up to about 19 percent, not at the monthly figure on the offer
- Take a desk before an office, and a registered office through your resident agent if your clients are abroad
- Treat Bocas del Toro as a capital-priced town and David, Las Tablas and Volcán as the cheapest bases in the country
- Keep your own budget in US dollars and your company's revenue foreign-source, and neither is taxed in Panama
Tell us where you plan to live, how many people you will hire and what the company will earn abroad. Company Formation in Panama will cost the formation, the payroll and the registered office together, so the two budgets are built on the same numbers.
Frequently Asked Questions
How much does it cost to live in Panama as a single person if I keep my company's office at home?
The personal budget in the tables above, with no desk or office line, and a higher electricity bill for the air conditioning you run all day. A founder working from a residential-district apartment lands near $1,900 a month. The saving on the desk is $150 to $300, and the electricity takes back $30 to $60 of it.
What is the cost of living in Panama for retirees compared with a founder?
Lower. Cost of living in Panama for retirees runs about $2,600 a month for a couple including rent. Retirees tend to settle in Boquete, Coronado or a residential district, and the pensionado program adds discounts on restaurants, transport and medical bills. A founder in a business district with a family pays more, and a company on top.
Why does the cost of food in Panama City Panama vary so much between expats?
Imports. Local produce, rice, chicken and Panamanian brands are cheap. Anything shipped in carries duty, freight and a retail margin, so a basket of familiar imported brands costs two to three times the local equivalent. Cost of food in Panama City Panama is decided by how much of your cart is imported, not by the city.
Is it expensive to live in Panama compared with the United States?
No, in most categories. Rent, healthcare and services are lower than in most US cities, groceries are similar, and imported goods, cars and electronics are higher. A founder moving from Miami or New York sees a lower total. One moving from a small US town sees rent that is similar and healthcare that is much cheaper.
Does living in Panama make me a Panamanian tax resident, and does that cost me anything?
You become tax resident after 183 days in a year, or by establishing your centre of interests here. Panama taxes individuals on Panamanian-source income only, so a salary you draw from your own company for work done abroad is not taxed here. What it costs you depends on your home country, which decides whether it keeps taxing you, and that question is settled before you move, not after.
Disclaimer: The information provided in this blog is for general informational purposes only. For professional assistance and advice, please contact experts.
