Before You Buy: 5 Due Diligence Steps Every Foreign Investor Should Follow in Panama

Investing in Panama’s real estate market? Don't sign anything until you’ve checked these 5 boxes.

Panama is quickly becoming one of the most attractive real estate markets in Latin America, especially for expats, digital nomads, and international investors looking for rental income, second homes, or relocation opportunities.

But before you make a down payment on that charming Casco Viejo apartment or that beachfront plot in Pedasí, there’s something you absolutely need to do first: due diligence.

Here’s your essential 5-step checklist to buying property in Panama the smart (and legal) way.

1. ✅ Verify the Property Title at the Public Registry

This is your non-negotiable first step.

All titled property in Panama is registered with the Registro Público (Public Registry). As a foreign investor, you must confirm:

• That the title exists and is properly recorded

• Who the legal owner is (should match the seller)

• That there are no liens, debts, or encumbrances on the property

  
  

If you’re buying in a building, confirm that both the unit and the land are titled. Some older buildings in historic zones like Casco Viejo may have mixed or partial titles.

2. 🚫 Avoid ROP (Rights of Possession) Properties

Panama has two types of land: Titled and ROP (Rights of Possession).

ROP may look like a great deal, but here’s the truth:

• You don’t actually own the land

• You can’t get a mortgage or title insurance

• You’re exposed to legal disputes and eviction risk

• Foreigners cannot legally own ROP land within 10km of borders or 22m of beachfront

Stick to titled land only if you want to protect your investment and resell easily in the future.

3. ⚖️ Hire a Real Estate Lawyer in Panama

It is absolutely worth hiring an experienced Panamanian real estate attorney who works with foreign buyers.

They’ll help you:

• Draft or review the promise-to-purchase contract

• Ensure the seller is legally authorized to sell

• Manage your due diligence timeline

• Handle escrow or secure transfer processes

• Register the title in your name post-sale

Avoid using the seller’s lawyer. You need an independent legal advocate who’s looking out for your interests.

4. 📍 Be Aware of Restricted Zones for Foreigners

Yes, foreigners can own property in Panama.

But not everywhere.

By law, foreign buyers cannot directly own land:

• Within 10 km of Panama’s borders

• Within the first 22 meters of the high tide beachfront line

  
  

Some beachfront or indigenous territory land may also be classified as ROP. Always ask your lawyer to confirm whether your desired location has restrictions, limitations, or special permits.

5. 🏗️ Inspect Construction & Materials for Panama’s Climate

Panama’s climate is hot, humid, and salty in coastal areas. Poor construction leads to fast deterioration, mold, corrosion, and expensive repairs.

Before buying:

• Request a structural inspection

• Check for mold, rust, and water damage

• Review what materials were used (ex: aluminum vs steel, tiles vs drywall)

• Look into roof drainage and ventilation

If you're buying pre-construction or off-plan, research the developer. Ask for examples of past projects, timelines, and delivery success.

Final Takeaway: Due Diligence = Risk-Proof Investment

Panama offers major advantages:

• 💵 Dollarized economy

• 🌎 Foreign-friendly real estate laws

• 🏠 High rental demand in key areas

• 📈 Strong long-term growth

But just because it’s easier than other countries doesn’t mean you should skip steps. Following this 5-step due diligence checklist will protect your capital, maximize your ROI, and make your investment journey smooth from day one.

📥 Want help navigating the Panama property market?

Casco View Life offers fully titled, Airbnb-legal units with transparent ownership, modern amenities, and professional guidance.

Contact our team to explore available properties.