How buying before completion works in Panama, where the risks lie, what the purchase promise should cover, and what Decree 17 changes for Golden Visa buyers
By Karen Dorcy | Abogada de la República de Panamá | Idoneidad No. 10179
Legal and official-source review: 5 November 2026. Pre-construction guide consolidated: 6 November 2026.
The short answer
- Off-plan means buying a unit before it is completed. Projects marketed as pre-construction fall within this broader buying-before-completion context; the actual project stage must be checked individually. In Panama, the transaction is generally based on a purchase promise (Promesa de Compraventa).
- Ownership is completed through the public deed and registration at the Registro Público. A reservation or purchase promise does not itself give you registered title.
- The central risk is the gap between paying and obtaining title. How your payments are protected matters as much as the advertised price.
- Golden Visa: A purchase promise involving at least B/.300,000 may qualify for the Qualified Investor programme, subject to all requirements. Decree 17 of 8 September 2026 sets specific safeguards for this route.
How an off-plan purchase usually proceeds
- Reservation: Check exactly what the reservation payment secures, how long it lasts and when it is refundable.
- Purchase promise: Identify the unit, price, payment schedule, completion deadline and remedies for delay. Article 1221 of the Civil Code requires an immovable-property purchase promise to be in writing. A promise executed as a public deed and registered can also restrict disposal or encumbrance of the property; whether that protection is available for the specific unit and project requires a registry review. Obtain independent advice before signing or making a substantial payment.
- Construction payments: Instalments may be linked to milestones. There is no universal payment split: use the agreed contract and verify the evidence required before each payment.
- Completion: Check the construction and occupancy authorisations required by the competent authority, the contractual handover conditions and any defects procedure. Occupancy permission, handover of keys and registration of ownership are separate steps. Municipal requirements must be checked for the project location; the Municipality of Panamá also provides for specified partial occupancy permissions.
- Deed and registration: Coordinate final payment, the public deed and registration. Review mortgages, releases and closing conditions rather than assuming that payment alone transfers title.
For closing expenses, see our guide to purchase costs in Panama.
Finding and comparing pre-construction projects
Developer websites, agents and listing platforms can help you identify projects. Treat brochures, renderings and advertised completion dates as starting points for enquiries. They do not establish the project’s legal status or the protection of your payments. Our guide to MLS and property searches in Panama explains how to use listings when building a shortlist.
- Compare like with like: Request written specifications, the unit’s agreed area, included parking and finishes, reservation conditions, the payment schedule and expected recurring building charges. An advertised price alone is not a complete budget.
- Check the location for your intended use: Assess access, utilities, services and management arrangements for the specific project. Verify any intended letting use rather than relying on a general description of a neighbourhood or resort.
- Investigate the developer and project: Review completed projects and request documents supporting title, permissions and the stated construction and financing stage. Have an independent adviser check the relevant documents; testimonials cannot replace that review.
- Plan for the period before handover: Allow for your own accommodation and financing needs if completion is delayed. Assess the purchase without assuming rental income or a profitable resale before completion.
Potential benefits, assessed realistically
- Early pricing: An early-stage price may be lower than a later advertised price, but that is not evidence of market value or a guaranteed gain.
- Payment schedule: A contract may spread payments over construction. The Qualified Investor direct-payment route has separate full-payment requirements.
- Choice of specifications: Earlier buyers may be offered layout or finish options. Put agreed specifications and permitted variations in the contract.
Any eventual gain depends on the property, market, completion and transaction costs. A projected resale price or rental yield is not a guarantee.
The risks
- Delay: Review extensions, notice requirements, compensation and termination remedies. The absence of an agreed penalty does not by itself establish that no legal remedy exists. Articles 986 and 1009 of the Civil Code provide, subject to their requirements, for damages and for enforcement or termination of reciprocal obligations. An enforceable claim does not guarantee recovery if the developer lacks assets.
- Non-completion: Developer default can leave you with a contractual claim instead of a completed property. Review the actual trust or bank security and how it can be enforced.
- Variations: Record plans, area definitions, specifications and limits on substitutions in the contract, and retain the advertising. For consumer purchases of new residential construction, Article 79 of Law 45 makes the developer’s advertising part of the sale contract and binding on the provider. Missing contractual attachments do not automatically remove those statutory rights; applicability must be assessed for the particular transaction.
- Running costs: Obtain the proposed maintenance budget, reserve contributions and the basis on which charges can change.
- Resale or assignment: Distinguish assignment of a claim from transfer of the buyer’s full contractual position and payment obligations. Check restrictions, required form, developer consent, fees and tax consequences before assuming you can exit before completion. Substitution of the debtor by novation requires the creditor’s consent under Article 1091 of the Civil Code.
Consumer protection and price changes. Where the transaction falls within consumer law, Articles 74–76 of Law 45 restrict abusive standard terms, including certain unilateral changes and disproportionate penalties. Article 79 addresses new construction, delivery dates, written warranty terms and price adjustments. Review any increase clause and the relevant ACODECO validation procedure. The 2015 judgment concerning Article 43 of Executive Decree 46 invalidated the specified phrases allowing the seller to set a new delivery date; do not assume that a developer may unilaterally reset a missed deadline. These rules do not make every real-estate investment a consumer transaction.
What the purchase promise should address
- Exact unit identification, area measurement, parking, storage and attached specifications
- A fixed or determinable delivery date, legally valid extensions, notices and delay remedies, without excluding applicable statutory rights
- Termination, repayment deadlines and enforceable security for non-completion
- Where payments go, who controls releases and the precise terms of any agreed trust or bank security; distinguish ordinary contractual safeguards from mandatory Qualified Investor requirements
- Evidence of title, seller authority, project permits and treatment of existing financing
- Allocation of closing costs and conditions for final payment and registration
- Assignment rights, consent requirements and charges before completion
A developer’s contract is drafted for the developer. Independent counsel should review your interests and any conflict of interest.
Off-plan and Golden Visa: Article 7 of Decree 17
A purchase-promise investment of at least B/.300,000 can be eligible under Article 7 of Decree 17, subject to its documentation and other programme requirements. The article distinguishes two routes:
- A deposit of at least the applicable minimum in a trust managed by a bank or fiduciary licensed to operate in Panama. Notarised copies of the purchase promise and trust agreement are required; the agreement must provide for the trust funds to discharge the buyer’s obligations to the seller.
- Alternatively, payment of 100% of the property value directly to the developer or promisor seller for property not yet built, segregated or registered. This route requires a bank instrument issued by a Panama-licensed institution in the investor’s favour, such as a demand standby letter of credit, irrevocable bank guarantee or bank performance guarantee.
- For the direct-payment route, the instrument must be irrevocable, unconditional and payable on first demand. It must cover at least the full investment, remain valid until construction, segregation and registration in the investor’s name, and be renewed and submitted to MICI annually. Review the execution conditions as well as the headline amount.
- If completion and registration fail within the agreed contractual period for reasons attributable to the developer or seller, Article 7 allows replacement of the investment within 180 working days, starting on the working day after that contractual deadline. Another purchase promise may be used only once, with documentary evidence within the same deadline.
- The cumulative period of immigration status supported solely by purchase promises cannot exceed three years, whether continuous or interrupted. The decree provides for cancellation if its completion or replacement requirements are not met. These immigration protections do not themselves guarantee repayment.
Second-market property generally has a B/.500,000 threshold under Decree 17. Pre-existing investments may involve transitional rules and require an individual date check. See the full programme requirements in our Golden Visa guide.
Frequently asked questions
A purchase promise creates contractual rights. Completion of the public deed and registration in the Registro Público are central to obtaining registered ownership; do not treat the first payment as a title transfer.
Review the specific trust or bank instrument, its beneficiary, release conditions, duration and enforcement. Article 7 imposes particular requirements for Qualified Investor applications; not every ordinary off-plan contract satisfies them.
Potentially, from B/.300,000 under Article 7, with the prescribed licensed-trust route or full direct payment backed by the required bank instrument, plus the other programme requirements. A reservation or ordinary instalment plan alone is insufficient.
Recovery must be assessed under the agreement, security and applicable law, including any consumer rights; it is not limited to an expressly negotiated termination clause. Separately, Article 7 gives an eligible investor 180 working days from the working day after the missed contractual deadline to replace the investment when the failure is attributable to the developer or seller.
Have the purchase promise reviewed
We review the purchase promise and security arrangements before you sign, explain the risks in English and, where instructed, negotiate with the developer under Panamanian law.
Before choosing who will review your agreement, read Who represents you when buying property in Panama?
Sources and further reading
- Republic of Panama, Executive Decree 17 of 8 September 2026 – Official Gazette 30613 of 16 September 2026, particularly Article 7; Article 19 for pre-existing investments.
- Golden Visa: application before entering Panama – further explanation; the official decree above is the legal source.
- Código Civil: arts. 986, 1009, 1091, 1221, 1232
- Ley 45 de 2007: arts. 74–76, 79
- Ley 45: reformas / amendments
- Corte Suprema, 17-01-2023: publicidad de viviendas nuevas / new-home advertising
- Corte Suprema, 22-09-2015: artículo 43, Decreto Ejecutivo 46
- Municipio de Panamá: Permiso de Ocupación
- ACODECO: validación de aumento de costos de viviendas nuevas
About the author
Karen Dorcy is an Abogada de la República de Panamá, Idoneidad No. 10179. She advises international clients on immigration, investment structures and the legal aspects of moving to Panama.
Karen Dorcy’s professional profile
Legal note This article provides general information and does not replace individual legal review. It is not an investment recommendation.
Leave a Reply