I Doubled My Income by Moving to Panama

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Posted by The Savvy Retiree on January 11, 2020 in Make Money

Rod Larrivee, 55, first began considering a move abroad in 2008 following a conversation with a friend. Three years before, he’d launched an online business from home, helping companies with search engine optimization (SEO) and pay-per-click advertising campaigns.

“I was speaking to an online friend that did the same thing, who then was living in Thailand,” he says. “I asked him why he lived in Thailand. He replied, ‘Because I can work from anywhere I have a computer and internet connection.'”

Following the conversation, Rod began to seriously consider leaving his native Canada. The small business owner wanted to find a sunny overseas destination with lower taxes, less regulation, and a more laidback lifestyle.

His friend recommended International Living, and after a year of reading IL articles, Rod narrowed down his choice to four countries: Thailand, Costa Rica, Panama, and Paraguay. Following much consideration, he opted for Panama owing to its climate, taxation system, and time zone. The latter was a significant factor given that most of his customers at that time were in North America.

Moving to Panama has been a big boon for his finances. “After I attained my permanent residence with the Friendly Nations Visa—probably one of the easiest visas to get in any country for someone still in their income-producing years—I effectively doubled my income, as Panama only taxes Panamanian-sourced income, and Canada does not tax you if you do not reside in Canada,” he says.

American residents can see similar benefits as they are excluded from paying U.S. tax on the first $100,000 or so earned overseas each year under the Foreign Earned Income Exclusion.

For Rod, all this added income, coupled with the reduced living costs, meant that he saw a massive, overnight boost to his standard of living.

“When I moved to Panama, it was like living like a king; there was no way to spend the money I was making. I had double the money and half the expenses,” he says. “Going to a movie here in Panama is $5, paying my car insurance is $230 a year, my electrical bill in Boquete is $25 a month, a full unlimited data cellphone plan is $32, and lunch at the local Panamanian restaurants is $3.50.”

Initially after relocating, Rod continued his SEO and online advertising work. Before long, he also expanded to other areas including affiliate marketing and dropshipping. Now he oversees the online work for a company he co-owns that helps expats move to Panama.

While all of this amounts to a full-time job, Rod still enjoys a great deal of flexibility. “I don’t have a daily schedule. I wake up at 6 a.m., not because I have to, but because that is just my body clock. I have coffee, read a bit, check out what is on the calendar, and check emails. I keep a calendar, with my daily objectives in it, but if someone suggests a beach day, I have that option.”

Rod has met digital nomads in Panama operating in a wide variety of fields, including coding, editing, proofreading, and graphic design.

For those who like the idea of starting an online venture from Panama, he suggests bringing enough money to sustain your lifestyle for a couple of years and allow time to build the business.

For those with a part-time online side hustle, he believes that Panama can be an ideal option. “Maybe that side hustle is not generating enough money to sustain your life at home,” says Rod. “But if you kept all that money, owing no tax on it, it might well be enough to sustain a good lifestyle here.”

Written by Nanette Witmer