Panama City vs. Puerto Vallarta
As I roam about the globe, I am often struck by various similarities and differences between the places I visit. During a recent visit to Puerto Vallarta, on the Pacific Coast of Mexico, I couldn’t help but compare it to Panama City, Panama which has been my home for many years.
For example, the other day when I was on the phone with a client. When I explained that I was in Puerto Vallarta, he began asking me to compare Puerto Vallarta to Panama. That is not the first time I have been asked to compare the different places I have been (now approaching 40 countries).
In some ways it is like comparing apples to oranges – both cities are unique. Yet, I had to ask myself the questions… which one offers a better lifestyle? What about the differences in culture, climate, and food? Are there business and investment opportunities in either city… what are they and why? What are the advantages or disadvantages of spending time in either city? Does one feel safer than the other?
Perhaps I am the only one who thinks about these questions. But for anyone who is considering retiring or living abroad, sometimes a comparison can provide more insight than a simple description of one place.
The human mind works by making relative comparisons everyday and comparing situations is part of what helps us make decisions. For anyone who is considering living, retiring, or investing abroad, it might be helpful to read my comments on these two cities.
Initial Impression
The first benefit of living in Puerto Vallarta compared with Panama City is certainly the presence of the beach. The option of walking to a nice sandy beach, any day, every day, is a major benefit for personal health and well being. For most sun seekers, Puerto Vallarta’s long and wide sandy beach is a favorite place to swim, exercise, or simply sit and watch the sunset.
- One of PV’s big lifestyle advantages is the beach
In Panama, the nearest clean sandy beach is at least a one hour drive which is not very convenient. Many foreigners may find it difficult living in the steamy tropical climate of Panama, looking out at the ocean, but not being able to swim in the water or walk on the beach. Although Panama City is upgrading the area infront of the Panama Bay, it could be several years before the water is clean enough for swimming (if ever) and there will still be no sandy beach to enjoy.
- Panama City lacks a beach, but there is plenty of green space on the outskirts
Getting Around
Although traffic is often slow and congested, Puerto Vallarta is easily walked, with a pedestrian promenade along the beach and sidewalks throughout most of the city. In Panama, racing buses puffing black smoke and every-man-for-themselves taxis blast their horns making a walk through town more hair raising than relaxing. Mexicans in Puerto Vallarta use their horn much more sparingly. Only Casco Viejo, Panama City’s historical district is enjoyable for walking.
- In Panama City, these buses yeild to no one.
Neither city has a subway or metro system, however taxis are rather easily hailed from just about any street corner from either city (although as of late, it is getting more difficult to find a cab in Panama City). Taxi fares are slightly higher in Puerto Vallarta compared with Panama, although the public bus system is cheap and reliable in both cities.
Climate
Located at a much more northerly latitude, Puerto Vallarta is markedly cooler and less humid in the winter months than Panama City (November through April). The added humidity in Panama can make an afternoon stroll unbearable and it is just hot enough for most people to require air conditioning to sleep at night. In Puerto Vallarta, no air conditioning is required except for the hottest months (May – October). During these months, the heat in Puerto Vallarta can become overbearing and even hotter than a typical day in Panama City.
- Puerto Vallarta rests along a gorgeous mountain backdrop
People and Culture
Both Panamanians and Mexicans come across warmer and friendlier to me than North Americans. Both cultures seem easy going and welcoming to foreigners. It is more common to be hassled by vendors in Mexico compared to Panama, although this trait is not unbearable in Puerto Vallarta. A simple “no gracias” is enough to send most Mexican vendors on their way.
- Mexico’s beach vendors are pesky but manageable
Food
The main difference between traditional food is that Panamanian food is usually served with rice whereas in Mexico it is served with corn tortillas. Panamanian fare – rice, beans, choice of meat, salad… is basic but healthy, sanitary, and reliably cheap. Standard Mexican food is also reliably cheap, although perhaps not as reliably friendly on the stomach, which for many people may require up to a week of semi-uncomfortable adjustment before feeling normal again. The fact that Panamanian tap water is potable (not so in Puerto Vallarta) goes a long way toward the overall cleanliness and sanitation of the food.
- If you live in pty, you’ll learn to love what these guys sell from their mobile food stands (empanadas and chicha)
Costs
With the recent 30% devaluation of the Mexican peso vs. the US dollar, Puerto Vallarta is now as cheap if not cheaper than Panama City. Rents are fairly comparable for prime ocean front properties – a decent two bedroom ocean front condo will cost $1500 – $2500/month in either city. Purchase prices for those same apartments would range between $150,000 and $300,000 in Puerto Vallarta (add at least 30% to those numbers in Panama City).
- Panama City offers stellar highrise views, but it’ll cost ya
- Puerto Vallarta real estate prices are now very comparable to Panama City
In the old town of Puerto Vallarta, modest apartments can be found unfurnished for under $500 per month. The days of cheap rents are long gone in Panama City. To find an apartment today in Panama City for under $500 per month, one would have to consider a relatively unattractive neighborhood well outside the city center.
Food and drink are similarly priced in both cities. International style restaurants are $10 – $12 per entrée in both cities with finer dining in the $20 to $30 range per main course. Although groceries and liquor appear to be less expensive in Panama (25% – 50%), the recent devaluation of the peso make a dollar stretch a lot further in Puerto Vallarta than in past years.
Access
If you are located in the Western half of North America, Puerto Vallarta is very easily accessed, with direct flights from several major U.S. and Canadian cities. If you are on the Eastern side of North America, you’ll find Panama just as easy to access, depending on how far south you are (there are direct flights from Miami, Atlanta and New York to Panama). Europeans will find it equally difficult to get to both destinations, although with the recent flights connecting Amsterdam to Panama, Panama would be easier to reach than Puerto Vallarta from mainland Europe.
- New direct flights from Amsterdam make Panama City easier to access from Europe
Health Care
Both cities offer relatively modern health care facilities by Latin American standards, and at reasonable prices. Health food and natural food supplements are easier to find in Puerto Vallarta as this industry is still relatively undeveloped in Panama. Organic produce is available from small grocers in both cities.
Safety
As a nation as a whole, Panama could be considered “safer” from crime than Mexico, but with Puerto Vallarta being one of the safest regions of Mexico, it is hard to argue that one city is truly safer than the other. Precautions are recommended in either city – to remain aware of one’s surroundings at all times and to use extra caution walking around at night.
Hurricanes, earthquakes and other natural disasters, though possible, are rare in both cities. Panama City has received the odd minor earthquake (your author’s six story apartment building shook in 2003) and Puerto Vallarta receives the odd hurricane (as recently as 2002, a fairly severe hurricane struck Puerto Vallarta).
- Panama City’s large tropical trees offer respite from the heat
Expat Society
Community organizations and activities for expats are more developed and diverse in Puerto Vallarta. Puerto Vallarta has been a go-to city for retirees and snowbirds for decades and over the years has developed a strong sense of community among the foreigners who live there. Panama is still in the infancy stage of expat social and cultural development, although this area is growing fairly quickly.
Business Climate
It is hard to beat Panama’s economic growth level, which is noted to be among the highest in Latin America in recent years. A myriad of new businesses are being started by foreigners in Panama, hoping to capitalize on growth stemming from the burgeoning construction industry, tourism, executive relocation, and other major infrastructure projects including the widening of the Panama Canal.
Although business in both countries is riddled with corruption and bureaucratic red tape, Panama shines in the sense that most basic business procedures can be completed easily, and reasonably efficiently (e.g. purchase or sale of property, forming a corporation, obtaining a business license). Simple business processes can be more time consuming and expensive to complete in Mexico. Many business opportunities are saturated with competition in Puerto Vallarta although anyone with desire and ambition is likely to find opportunities catering to the continuous influx of tourists.
Puerto Vallarta is suffering under the current economic downturn due to its heavy reliance on tourism to drive its economy. Panama’s mainstay industries of international business and trade related services are more likely to withstand the global economic slowdown currently underway.
- Puerto Vallarta has a promenade along the beach great for walking, shopping, or just hangin out
Immigration
Mexico’s 180-day hardly-any-questions-asked tourist visa is a blessing for many prospective expats and retirees who only plan to live in Mexico for part of the year. No investment is required and there is usually no problem obtaining this visa upon entry – even if re-entering the country multiple times in a year.
There are several alternatives available for those who want to live permanently in Mexico. One of the most common visas for foreigners are one of the FMT, FM3 or FM2 visa varieties, which require the applicant to have a minimum monthly income or make a lump sum deposit or qualify based on the profession they wish to carry out in Mexico. A major benefit for visa applicants in Mexico is that one may apply for a more permanent visa while entering on a tourist visa, which makes waiting for a visa possible without having to leave and re-enter on a regular basis.
- Panama still offers a great pensioner visa option for retirees
Panama has recently tightened immigration requirements. Today, most nationalities are granted only 90 days as a tourist. The tourist visa extension procedure is more than a simple stamp – there are multiple documents required, often lengthy line ups to deal with, and no guarantee the extension will be granted. For anyone wishing to spend their winters in Panama or retire there permanently, the tourist visa is really not a viable option.
Panama has also tightened the requirements for permanent residency visas. The two most common are the Pensioner Visa (requiring $1000/month pensioner income) or the investor visa which requires a $300,000 capital investment in real estate and/or time-deposits. There are several options for those wishing to work in Panama based on a specialized profession, or who intend to start a business and employ at least five Panamanians, but overall, Panama’s new immigration requirements have made living in Panama a serious legal undertaking and rather discouraging for non-pensioners with less than $300,000 to invest.
In The Top Ten Retirement Visas Worldwide, I go into more detail about visa options for Mexico, Panama, plus eight more interesting countries to reside.
- Nothing beats a Mexican sunset
Arts and Entertainment
With a diverse tourism base and a large expat community, Puerto Vallarta sustains a wide range of art and entertainment activities. Live music is available in some form on a regular basis with many shows and events to choose from. Galleries are scattered about town and nightlife ranges from large discotheques to intimate wine bars. Panama City offers a number of festivals and celebrations that set it apart with Carnaval and Semana Santa being the most notable, along with its boisterous Independence Day celebrations. Both cities sustain art galleries filled with local art, while neither really excel in the areas of museums or live theater.
By Michael Manville
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Does Mexico levy tax on worldwide income or only on remitted and domestically earned income.
Many Thanks,
JC
Great job in comparing the two cities, and being unbiased, being as you live in Panama.
Thanks & Well done!!
Thank you for the continued letters on Panama and Mexico. I have noticed that most of your information is geared toward retirement (which is understandable, since that is what your website is based on), however I am wondering about a younger couples oppertunity to move to either Mexico or Panama to live and work in a semi-retired nature. Also, I have been looking extensively at land oppertunities in Arkansa and while trecking through their lovely forrests I have been invaded by the ever so erritating ‘Chigger’. Which brings me to my question on bugs/insects, poisonous or not in the two areas. Is there any information on such subject in your writings? Thank you and keep up the good work.
Hello Michael!
In your travels in Panama, did you notice much of a difference in how the locals treat Canadian gringos whose Spanish is still in the tourist level, vs those fluent in Spanish?
Michael,
I really enjoyed the comparisons of Puerto Vallarta to Panama City…I have been to P.V a number of times as I live only about 4 hours or so from there….I am living full time as an expat about 20 minutes or so from downtown Chapala and Lake Chapala and 30 minutes or so from Ajijic, where the largest number of expats in Mexico reside…
I chose to live in a Mexican neighborhood, where only 3 of us Gringos choose to live….It is not a gated community, although we do have a guard now, who watches over our neighborhoods…
My small 2 bedroom attached row house cost me, with the exchange rate, about $90.00 a month….This way of life is not for everyone but I have finally found my nitch here….My neighbors keep a watch out for the unusual, as I do also. I have lived here for about 1 and a half yrs. now and I am part of this small community….I don’t speak great Spanish but I definitely speak enough to make myself understood in this all Native section of Mexico I have chosen to live in…
Thanks again for your wonderful comparison article…
Patti
Michael,
I was wondering if you will ever include other Latin American Countries in your slide show, such as Nicaragua and El Salvador? I don’t find much literature on either one of those Countries…..
Thanks,
Patti
Mike,
Interesting observations. Having spent time in both cities and having invested both in Puerto Vallarta and Panama (outside the city), I would add the following:
Puerto Vallarta is only about 100 years old. It evolved from a small fishing community into the primarily tourist based economy it is today, particularly over the past 50 years. Panama City is over 400 years old, serving originally as an outpost for Spanish colonization and more recently as a trading and commerce center. Naturally, you get a much more laid back feel from Puerto Vallarta, particularly sense it is much less dense in population and much smaller, with roughly 25% of the population of Panama City. For touristy options, Puerto Vallarta is clearly the winner. For expats, it depends on what you are looking for.
Puerto Vallarta gives you the sense of a real Mexican community where as Panama City is a melting pot of many different cultures with a more cosmopolitan feel.
Overall, I would say that service levels in hotels, restaurants, etc. far more developed in Puerto Vallarta just because that is the basis upon which the economy evolved and it is nearly inbred within the community.
In Panama City, service is spotty at best and attempting to be learned. There is a lot more energy in Panama City and will appeal to those that like a little more hustle and bustle.
English is much more widely spoken in Puerto Vallarta than Panama City simply because they have depended upon North American tourism for decades.
Although it is good to know some Spanish in both cities, you get by without knowing any in PV whereas it would be very difficult to get by in Panama City without some basic level of fluency.
Panama City has a far greater diversity of climate, wildlife and cultures within a short distance, with the whole country being the size of South Carolina. For those weekend jaunts by car from Panama City, you can find Caribbean seas/cultures, real indigenous cultures, 10,000 ft mountains, coffee growing regions, large fresh water lakes as well as countless islands to visit.
A weekend jaunt from Puerto Vallarta gives you a handful of small coastal communities, or perhaps the Tequila region and the city of Guadalajara with 5.0 Million people. Bottom line, what lies relatively close to Puerto Vallarta is not nearly as diverse or interesting as what is close to Panama City.
The cost of durable goods such as electronics, appliances, etc. are dramatically higher in Puerto Vallarta than in Panama City. I shopped recently in PV at Sam’s Club, Costco and Wal-Mart, and was shocked to see how expensive TV’s were. For example, 40” LCD TV’s were $1,200 and up where has you can find the same items at PanaFoto in Panama City for 30-40% lower, similar to a Best Buy in the U.S. The only explanation I could come up with is that it must be a case of “gringo gouging” in PV because they are serving the expat market rather than locals. However, in Panama, the stores serve mostly locals and the expats get the benefit of local pricing and its position as a import center gives it a huge price advantage. I suspect if you make the trek from PV to Guadalajara, about 2 ½ hours by car, prices would be somewhat cheaper, but that is a guess. Having shopped for home goods and furnishings, I would say that Panama City has a far greater variety of shopping options at much lower pricing.
With owning properties in both Mexico and Panama, I think Panama is much more investment friendly on a number of points. For example, titling property is easier in Panama with much far more flexibility than Mexico. For example, you can hold title directly in an estate planning trust in Panama whereas you can’t in Puerto Vallarta which can create estate planning challenges. In fact, in Puerto Vallarta, an individual can’t have direct title to Real Estate and must use a Mexican Bank Trust called a Fideicomiso. While it offers the same ability options for selling, etc., virtually anyone from North America would prefer the titling approach in Panama versus Mexico.
Property taxes are much cheaper in Mexico (except for those that qualified for the various exemptions in Panama) than Panama. On the other side, income taxes in general are less in Panama, particularly relating to capital gains.
In short, there are pros and cons on a variety of points and kind of depends on the individual’s background and lifestyle.
Best,
Gary F
Once again a very informative and interesting article. I particulary found Gary’s comments of great interest. I hope to visit Panama again very soon with the idea of finding a ‘Base’ from which to live on my frequent future visits. I am probably too old to bother with buying a place in Panama, I hope to find a nice quiet spot in the countryside. Cheers, basil
Dear Michael,
First I would like to thank you for your great e-letter. I enjoy reading it very much and it has a lot of great information.
I first visited Panama in 1981 and stayed there to 4 months. I immediately loved the country and the people. Since then I visited the country seven more times. Since the beginning I know the potential it had for growth and development and for years I was trying to get people to invest in lands and development. unfortunately, since I was unable to invest my own money I could not partner with anyone on any project.
But the dream of coming to Live in Panama just doesn’t go away. So I am trying to find other ways to get get there. Right now I am setting up a small company that will locate, develop and operate Real Estate properties in Central America.
I am looking for some data on development and construction costs in Panama as well as for the approval process and municipal and government requirements for such projects.
I would greatly appreciate it if you could direct me in the right direction to obtain such information. I realize that in order to make my dream a reality I will have to start with small projects and grow from there.
I thank you for any assistance you may provide and look forward to hearing back from you.
Yours truly,
John S
[...] Which City Fits Your Lifestyle? – an article comparing life in Puerto Vallarta, Mexico with Panama City, Panama. [...]
Thanks all for the details and info. I now know I can’t afford either PV or Panama so will retire in Thailand instead!
Cheers
What about retirement in Costa Rica? I have heard there are American communities there and that it is a great place to retire? Any info on that? Thanks.
Hi Michael – Good luck in your travels. Looks like I will be stuck here in Texas for another 10 years, and won’t be able to retire to the tropics until age 70. Of course, these days, that’s more like 40; right?!!??
BTW, having lived in Mexico (Cozumel) a couple years back in the early 80s, and right now have a friend living and owning a business outside of P.V., MX, whom I visit often, I find it way too hot in the summer. The heat is just blazing in August. Personally, with my sinus and allergy situations, the warm, humid climates suit me best. Be a good traveler!
This is such a great resource that you are providing and you give it away for free. I enjoy seeing websites that understand the value of providing a prime resource for free. I deeply loved reading your post. Thanks!
Sawadee Kha! I’m about to go to Thailand and I’m quite excited about my trip. Already got the flight to Suvamabhumi Airport and from there we’ll go travel around Bangkok, I found your awesome site on Msn and it seems that you know a lot about the land of smiles. Could you please give me some advice where to stay in Silom? I’ve read there are a couple of fantastic resorts near Sukhumvit and Siam Center… Thank you in advance!
I am considering starting a hot air balloon business in PV as I have been there before and agree with a number of the sentiments reflected here. Does anyone have a point of contact for the Mexican American Chamber of Commerce in PV?