34. Why You Need a Good Attorney BEFORE Arriving in Panama
A reliable, experienced attorney is one of the most valuable assets you can have on your side before you even land in Panama.
Back in the U.S., I rarely needed a lawyer—outside of my divorce, I can't remember the last time I used one. And, that was a GOOD thing. Here, I've had to rely on them way more. It’s a part of life here that you’ll want to be prepared for.
You'll need an attorney for...
Here are the main things you'll need an attorney to help you with in Panama:
❶ Open a Bank Account (if you don't have residency)
When we arrived to get our Friendly Nations Visa (FNV) in 2021, we got our first taste of how Panama's right hand doesn't always talk to the left hand.
At the time, the immigration department required a bank account with a $5,000 balance as part of the FNV residency process (we squeaked in under the old FNV process, so I'm not sure how it is now). Most of the banks, however, required you to have residency to open an account.
Attorneys usually have connections with banks that can streamline the process of a non-resident getting a bank account. (It's not likely you'll need an attorney to open a bank account if you already have your residency.)
❷ Complete the Residency Process
The residency process is one of the most important (and obvious) reasons to hire an attorney. It's best to connect with them before you leave your home country so you can do what you need to do before you leave. It's much easier this way!
Panamá LOVES bureaucracy! A competent lawyer will ensure that all your documents are in order and that you meet all the requirements, saving you time and avoiding delays. They also know the ins and outs of local immigration laws, and can help you avoid common pitfalls and fines.
❸ Review Real Estate Rental, Purchase or Building Contracts
Whether you're renting or buying property, contracts in Panama can be tricky. First, all legal contracts must be in Spanish. Second, the laws and terms are not necessarily the same as your home country.
An attorney can review your contracts to ensure that your interests are fully protected. They will identify any red flags and ensure you're not signing anything that could lead to disputes or leave you open to scams later on.
For example, some builders may include a clause that holds you responsible for any future labor disputes. This has the potential to cost you thousands of dollars.
❹ Determine the Best Way to Hold Title to Real Estate
Owning property exposes you to liability and scams in Panama, so it's important to take a hard look at what the best way to hold title.
An experienced attorney can help you decide whether it's best to hold title in your name, through a foundation, or in a corporation, based upon your unique needs. They will also help you set up the appropriate vehicle and structure to protect your assets and comply with local laws.
Unfortunately, I did not get quality guidance on this matter, which enabled a scammer to target me and place an unjustified lien on my property. (If you think the legal system will protect you from scams, you'd be wrong.)
I highly recommend looking into holding title to your property in the name of a foundation, both for legal and estate purposes. However, make sure you get educated on the tax consequences in your home country before you make the final decision.
❺ Steer You Clear of Scammers
Unfortunately, unethical builders, contractors, or even so-called "helpers" target newcomers who are at a disadvantage because of their limited knowledge.
Local attorneys will usually have intimate knowledge of the crooks in their area and will protect you from a nightmare. They can also help vet builders, real estate agents, and other contractors to minimize the odds of future legal issues.
❻ Assist with Employment & Business Setup
If you're planning to work or start a business in Panama, an attorney will be critical in navigating the country’s labor laws and business regulations.
Your attorney can help you get your work permit, set up your corporation or, in some cases, both so you are in compliance with Panama’s laws.
❼ Estate Planning
Panama’s estate laws may differ significantly from what you're accustomed to in your home country. An attorney can advise you on how best to structure your estate in Panama, ensuring that your assets are protected and that your heirs can easily inherit your property.
❽ Resolve Disputes
Should you ever find yourself in a legal dispute (like my ex 😢) or the victim of a scam (like me 😤), having a trusted and aggressive attorney will make all the difference. They can represent your interests and hopefully help resolve your issues in a way that minimizes stress and financial loss.
Finding the right attorney
Finding the right attorney in Panama can be challenging, especially if you live in the country. Unlike in the U.S., there’s no Yelp to guide you and, outside of Panama City, your options are usually quite limited.
Many attorneys don’t speak English fluently, which can be a dealbreaker when you’re handling important legal matters. Although many legal fees are set by the government, some attorneys will still find ways to "gringo" you. And, there are some attorneys that are scammers themselves.
Honestly, this has been one of my biggest frustrations with living here. We have a very small number of attorneys serving the Azuero Peninsula, so the ones that are here are busy. I've gotten some outrageous fee quotes (because they can get away with it) and often don't hear back from them when I need them. So, it's really important to find one that will serve you consistently, fairly, and well...and equally as important to appreciate when you do find this person because they're not easy to find!
A personal recommendation is the best way to find a trusted attorney in Panama. Get several recommendations and see which attorney feels right to you. Ask people you know that are already here or in one of the Panama expat groups for recommendations.
Final thoughts...
Getting a skilled, honest attorney before you arrive in Panama will help minimize issues with your residency process and prepare you to handle issues that WILL come up here.
Don’t wait until you’re already knee-deep in challenges—start working with an attorney early to make your transition as smooth and stress-free as possible!
