One of the main concerns of the foreigner that is interested in investing in real estate in Panama should be a basic understanding of the normative which governs its nature, ownership and transfer. In order to gain this basic understanding, they should not be obligated on the one hand to simply rely on word of mouth or, on the other hand, be necessarily compelled to seek professional assistance on an immediate basis. The nature of our political system is unitary rather than federal. Thus, a unified legal system will apply to every situation or circumstance, regardless of the place it occurs, if within the territory of Panama. In that sense, nature, ownership and transfer of real property will emerge from a unified body of Law.

In order to provide a brief explanation of the matter at hand, we consider important to first address the issue of ownership of real property by foreigners in Panama and what it implies.  In effect, ownership of personal or real property is not limited to Panamanian citizens; thus as far as property is concerned, foreigners are allowed by law to exercise in general the same equal rights as Panamanians.

The Political Constitution of The Republic of Panama estates the following in regards:

Article 17. Panamanian authorities are instituted to protect the lives, honor and property of nationals wherever they may be and of foreigners under their jurisdiction; assure the effectiveness of rights and individual and social obligations and comply and see to the compliance of the Constitution and the Law.
The rights and warranties hereby instated in this Constitution are to be considered as minimum and non exclusive of others that may be related to the fundamental rights and dignity of the individual.

Article 19.   There will be no exemption, privilege or discrimination on account of race, birth, handicap, social standing, gender, religion or political ideas.

Article 20. Panamanians and foreigners are equal under the Law; nonetheless, the Law may provide on account of work opportunities, health, morality, national security and the economy, subject foreigners to especial procedures or deny the practice of specific activities to them. The Law or authorities may also, according to circumstances, take measures that exclusively affect citizens of determined countries in case of war or as a result of international treaties.

Article 47. Private property acquired according to the law is guaranteed to both incorporated groups or individuals.

Article 291. Foreigners in general , both individuals or incorporated groups as well as national incorporated groups made up partially or totally of foreign capital, may not acquire private or state owned real property located less than ten kilometers from each border.

It should be understood, then, that the only limitation to ownership of real estate property by foreigners is expressed in Article 291 of the Constitution, above mentioned. It is a common myth to think that in order to own real estate property, foreigners are obligated to incorporate to be able to exercise any rights as a rightful owners under the law; apart from the evident benefits of purchasing real estate thru corporations, there is no restriction to ownership of properties in general as individuals, be they Panamanian or foreigners.

In the same, manner, the Civil Code also addresses the issue.

As far as the definition of property.

Article 337. Property is the right to use and dispose of a thing, without further restrictions other than those that may be imposed by Law.
The owner of the property has legal action to contest its possession by third parties and have it regained accordingly.

In regards to its protection.

Article 338. Nobody shall be deprived from his property other than by competent authority and only for grave reasons of public use, previous compensation. (Note: this Article refers to eminent domain as the right of the state to take property for public use.)

Conveyance of Property in Panama