Panama's Cost of Living Index is 44.5, making it affordable compared to NYC. Groceries (51.2) and restaurants (41.4) are also relatively affordable.

The Property Price to Income Ratio is 14.3 years, indicating an expensive housing market. The Rent Index is 22.7, suggesting rentals are more affordable than purchasing.

The Purchasing Power Index is 49.0, indicating a low purchasing power compared to NYC. The average minimum wage in Panama was $636.80 per month as of January 2024, with variations by sector and region.

Panama operates a territorial tax system, taxing only Panama-sourced income. Personal income tax is progressive, with 0% up to $11,000, 15% from $11,001 to $50,000, and 25% above $50,000. The standard VAT (ITBMS) is 7%, with higher rates for alcohol (10%) and tobacco (15%). Property taxes vary, with primary residences exempt up to $120,000.

Panama was ranked 86th globally in the World Bank's 2019 Ease of Doing Business report. The startup ecosystem is ranked 86th worldwide in 2025, with Panama City at 422nd. The government actively promotes foreign direct investment with favorable policies and tax incentives, making company registration relatively straightforward.

Panama offers a three-tiered healthcare system with public (MINSA, CSS) and private options. The public system provides affordable care, while private hospitals offer high-quality services with many bilingual doctors. The pension system is undergoing reforms (Law 462 of 2025) to ensure sustainability, maintaining the retirement age at 62 for men and 57 for women, and increasing employer contributions.

Panama's banking sector is well-regulated and stable, with strong capital adequacy and liquidity ratios, and adheres to Basel III standards. However, there is no formal deposit insurance scheme in Panama, meaning deposits are not protected by a government-backed guarantee.