The goal of Panamanian law is the security of all commercial transactions, and many laws have been enacted to specifically protect foreign investors. Therefore, it is very safe to buy in the country, and thousands of foreigners own property in Panama.
Contract language
For people who aren’t fluent in Spanish, the contract language could be an issue. However, by law, there is no obligation that the contract has to be in Spanish. But in the case of litigation, the contract will have to be translated into Spanish as the judge will give a ruling in Spanish. Hence, many law firms dealing with expats draft a Spanish contract with a translated version in English so that their clients feel more comfortable.
Purchasing procedure
The real-estate purchasing process takes around six weeks. The usual purchasing procedure is as follows:
Step 1: Agreement and Research
Once you have found your property you have to agree on a price with the owner. Then, you must request two documents from the owner:
- The titles (escrituras) – this official document establishes the owner, the location of the property and includes a short description of it
- A recent “Certificado de Registración” – that will reveal if there are any loans or other legal complications against the property. (www.registro-publico.gob.pa/index.php )
Step 2: The agreement to sell
Afterwards, you will have to sign a sale agreement. Usually, it implies a down payment of roughly 10% of the purchase price and you will have to agree on a date for the transfer of the title, with a penalty if one of the parties backs out.
Step 3: Title transfer
The next step is the draft of the sale contract by your lawyer. The contract will have to be presented to a public notary, who after all verifications will ask all parties to sign.
Step 4: Transfer of funds for the purchase
The best way to transfer the funds for the purchase is through an irrevocable letter of payment from a local bank. In this document, the bank promises the seller to transfer the funds from the buyer. Usually the lawyer helps you to obtain this document.
Step 5: National Registry
Finally, the last step is to record your purchase at the public registry, as the sale process is not considered completed until you have submitted the purchase documents to the National Registry and duly recorded your property. This process usually takes weeks, but it can be faster if your lawyer presents the document directly at the main office of the National Registry in Panama City.