If you’re seriously thinking about getting foreign residency somewhere that offers a better quality of life than your home country, there are worthwhile alternatives to consider in 2025, at a discount to Mexico.
Before we dive in, let me address the obvious question this post raises — why would I cover this topic on a blog called LiveWellMexico?
Why Mexico May Be Losing Its Edge as an Expat Destination for Legal Residency
Over the decades, Mexico has been luring more American residents than any other country, not to mention plenty of Canadians. These waves of immigrants are drawn by Mexico’s incredible cuisine, rich culture, great climate (mostly), excellent private health care, strong community, and a joie de vivre that’s unmatched in the U.S.
But to some, the lifestyle they’ve enjoyed here is increasingly at risk from factors, including air pollution, failing infrastructure, water shortages, corruption, cartel violence, and now, the U.S. threat of military action against Mexico’s largest criminal groups.
Apart from those risks, other aspiring expats may be priced out of Mexico, no longer qualifying for legal residency here due to the monthly income requirements surging more than 60% in the past three years alone.
The bottom line is… some looking for a new home abroad may want or need to find a Plan B. With that in mind, I’ve compared the 2025 residency requirements in Mexico against two other popular destinations in Latin America — Panama and Costa Rica. In a future article, I’ll expand on this topic to include Spain and Portugal.
Please keep in mind that no two countries have identical residency programs. So, it’s essential to do your own research to confirm that a visa is compatible with your financial situation and desired lifestyle.
2025 Financial Requirements for Residency by Country (in US Dollars)
Legal Residency in Mexico in 2025
For decades, Mexico has been the foreign destination luring more American residents than any other. But there’s a common misconception that Mexico is a dirt-cheap country that anyone motivated can move to.
This is totally false.
As you can see in the table above, Mexico now has the highest financial requirements for residency of the three countries covered here.
In 2025, it takes USD $50,220 in annual income to qualify for temporary residency as a single person. This number equates to 300 times the daily minimum wage in Mexico, with an additional 100 times the daily minimum for a dependent (non-wage-earning) spouse.
Unlike many developing countries, there is no carve-out for digital nomads with different criteria. If you wish to live and work remotely from Mexico you must be able to qualify for a temporary residency visa — either through income or savings.
If you prefer to use savings/investments instead, the main applicant holds liquid financial assets valued at no less than 5,000 times the daily minimum wage, plus an additional 100 days for their spouse. In 2025, this equates to $1,394,000 MXN for the main applicant and $27,880 MXN for the spouse. (this equates to a bit less than USD $75,000 per couple)
Another option for a couple is to have one person apply with income and the other with savings.
For permanent residency, the bar is even higher. An individual must show a monthly income of roughly USD $7,100 USD or savings/investments of around USD $280,000. You must begin the process for either visa in your home country at a Mexican consulate or embassy.
The requirements in 2025 are a LOT of dough for many would-be applicants.
With the “upscaling” of financial requirements for legal residency, Mexico is signaling, in effect, that it wants richer immigrants. So, if you still want to move here, you’ll need to bring a full wallet.
To be clear, I’m not condemning this policy.
Mexico has plenty of tough issues on its plate and natural-born citizens who need help. It has every right to decide who it admits.
But look at the bright side — when one door closes, another typically opens somewhere else. So, let’s look at other viable options.
Legal Residency in Panama in 2025
Sitting at the crossroads of Central and South America, Panama is sometimes referred to as the “Switzerland” of Latin America. Its high per capita wealth, commitment to neutrality in the operation of the Panama Canal, dollar-based economy, and roleas financial hub in the region make this visa worth a serious look.
I’ve visited a few times and have been impressed by the variety of what’s available in such a tiny country. Amenities include sophisticated urban nightlife and fine dining in the capital, Panama City, luxurious rainforest lodges and world-class diving around Bocas del Toro, and stunning beaches along the Pacific Coast.
Despite its privileged position, Panama is a ridiculously affordable and accessible option for establishing legal foreign residency. To qualify for the Pensionado program, the applicant must demonstrate a minimum annual income of $12,000 USD (approximately $1,000 USD per month) from a stable and reliable source, such as Social Security, an annuity, or a corporate pension. Your benefit must be guaranteed for life.
Another way to qualify for the Pensionado is through a combination of income and a real estate investment of $100,000 USD or more. Then, the monthly income requirement drops to just $750 USD. There is an additional $250 USD required per month for a dependent or a spouse.
Panama also offers the Friendly Nations Visa, available to citizens of countries with which Panama has good relations, including Canada, the U.S. (for now), and assorted European countries. To qualify for the FNV, an applicant must prove economic solvency by making a fixed-term deposit (akin to a Certificate of Deposit) in a Panamanian bank of at least $200,000 USD or buying real estate valued at $200,000 USD or more.
For comparison, qualifying for legal residency through real estate investment in Mexico requires proof of ownership of a home valued at a minimum of $11,152,000 MXN. (about $600,000 USD at current exchange rates) That’s nearly three times more than Panama!
While not indefinite, Panama also offers a Short-Stay Visa for Remote Workers for residency up to nine months for those with a minimum annual income of $36,000 USD. It includes the option to extend for another nine months after the initial term expires. You must begin the process in your home country at a Panamanian consulate or embassy.
There are also significant tax advantages to living in Panama if you can commit to spending at least 183 days per year there. For those looking to minimize their tax burden, Panama guarantees that residents pay:
- No tax on foreign-earned income
- No tax on passive income from foreign sources
- No inheritance or estate taxes
- Personal income tax (progressive) only on what is earned within Panama
Panama is also the safer choice relative to Mexico or Costa Rica (I’ll share more on Costa Rica below). According to Insight Crime, Panama’s murder rate in 2024 was 12.9 per 100,000 residents, which puts it on par with Pittsburgh, PA, and roughly half the rate of Atlanta, GA. The homicide rate in Panama is now more than 30% lower than Mexico’s average.
Homicides in Panama did tick up 3% last year, but overall, it’s still one of the safest countries in Latin America.
Legal Residency in Costa Rica in 2025
Costa Rica is a gorgeous country that’s hard to beat for those seeking a stable, friendly culture with access to some of the most stunning natural settings on planet Earth. I’ve been fortunate to visit myself, and was enthralled by its beauty and tranquility.
While Costa Rica has made headlines recently for increased violence stemming from the drug trade, it has been a bit overblown in my view, if you look at the crime data.
In 2024, Costa Rica’s murder rate dropped 3.5% nationwide, to 16.6 deaths per 100,000 people. This rate is on par with Rochester, NY. It is also at least 15% lower than the national average in Mexico, with many smaller Costa Rican towns far lower.
That said, last year was still the second most violent year in Costa Rica’s history, behind 2023. The reason is that Mexico’s drug cartels are battling for control over key trafficking routes between South America and the top destination markets of Europe and the U.S.
Most of the conflict is centered around the coastal areas of Limon (Caribbean side) and Puntarenas Province (Pacific/Gulf of Nicoya), as well as in the capital city of San Jose. Costa Rica’s lack of a standing army (it was constitutionally abolished in 1949) has made it fertile territory for the cartels to overrun.
With respect to residency, Costa Rica’s Pensionado visa requires an incredibly low level of passive income, but there is a hitch. To qualify, it must come from a stable and guaranteed public or corporate source, not investments.
Now, there aren’t many people with a guaranteed pension anymore. They’re mostly a relic of generations past.
If you don’t have a public pension and/or are self-employed, fortunately, there’s a workaround. Simply make a $60,000 USD deposit in a Costa Rican bank and voila – you qualify for a Pensionado visa. If you go this route, the money is still yours, so it’s a small price to pay to gain residency in a stable country with tremendous natural beauty and excellent health care.
Another avenue to legal residency is Costa Rica’s Digital Nomad Visa. Given the country’s tremendous appeal to fit, outdoorsy, globetrotting people (not exactly who I think of when I think of digital nomads, but whatever), this visa class was introduced back in 2022.
To qualify for the Digital Nomad Visa for Costa Rica, applicants must show a minimum monthly income of $3,000 USD.
How Do Mexico, Panama, and Costa Rica Compare for Cost of Living?
To compare the cost of living in the three capital cities of Mexico, Costa Rica, and Panama, I turned to Numbeo data, which crowd-sources living costs based on input from expats living there.
While it’s not perfect, Numbeo’s data is more than adequate to provide aspiring expats with an idea of the resources needed to start a new life in these countries. As you can see in the table below, all three are relatively close in annual living cost, with San Jose surprisingly coming in with the lowest figure due to its far cheaper housing cost relative to the other two.
Of course, many expats choose to relocate to more touristy coastal destinations than the capital cities, where living costs are even higher. As I mentioned above, you’ll need to do your own research to figure out what you can afford.
What About Ecuador?
Once known as a country that perennially topped International Living’s list of the best countries for expat retirement, Ecuador has fallen on some hard times.
Since 2020, crime has been exploding across Ecuador, and it now tops a different (and way less desirable) list — that of the world’s most violent countries, not including war zones. Driving the carnage is increased conflict between rival Mexican drug cartels and other criminal groups vying for control of key drug trafficking routes.
In 2024, Ecuador’s murder rate did drop 12.8% nationwide, to 28.8 deaths per 100,000 people. The improvement came as a result of the federal government declaring a state of emergency and deploying the military to crack down.
But violent crime remains elevated. Ecuador’s murder rate (while not an apples-to-apples comparison due to different methodologies) was significantly higher than Mexico’s murder rate in 2024, which is really saying something. All and all, Ecuador isn’t a great retirement destination at the moment.
Homicides per 100,000 People Have Soared in Ecuador Recently
In part 2 of this series (coming soon), I’ll look at two perennially popular European destinations – Spain and Portugal.
And if you haven’t yet seen Mexican actor Diego Luna’s hilarious comedy sketch promoting his native country as a place to “grin-go”, do check it out!