I guess Panama is something that grows on you, because a year and a half ago I thought there was little to no opportunity to live in Panama. But after some reflection I think I was wrong. Even though I thought it was a cool destination, I did not connect opportunity with Panama automatically. But after traveling a little more through Latin America (specifically Colombia), I have started to view Panama in a different light.
In Panama City rent is inexpensive. For $350 dollars a month you can have a decent apartment in Via Argentina, which is a decent place in Panama. In addition there is very good metros that cost only 75 cents to hope on. The town is very close quartered, so you never feel like you are in a metropolis. Despite being very hot, you hardly feel any humidity. At night there are many mini marts open, ready to serve. Restaurants abound, and service is ready at your convenience. Certain malls have bars overlooking the city, and there are many attractions such as a baseball team (which Colombia does not have), entertainment bars, and to a lesser extent adult entertainment. The only downside I see about Panama City is some food, mostly American food, is expensive. Also dating does not seem to be the best, although I did not try as hard, and my Spanish was just a bit better in Colombia. However, in Colombia I had a decent amount of looks, whereas in Panama I was just another face in the masses. So as a domicile flag it is decent, however on dating it did not seem that easy and I had a friend that seemed to be having a hard time with a lady he was meeting up with.
As for the business side, it is decent. If you don't have much capital, teaching English might be a decent route. You can earn $1k-$1.5k a month, and that is without TESOL. To be safe i am going to earn it, but I think it will just help me earn more. However, because the US Dollar is king here, there are many opportunities that could probably be had. One thing that seems to stick out to me is food. With the high cost for Western food, it seems like there may be opportunity to earn hard dollars here by import. I also scanned the markets and found some decent things that could be exported (such as a dress shirt for 2 bucks, along with other things). I was just scanning the markets casually, but comparing the markets there with Panama, it seems with the Colon Zone and the Canal there is a better chance of making money with exports in Panama than Colombia. I also did not dig into crafts as much, but I have heard some people make ok money on that as well.
For flags, I think domicile/part time hang out zone as well as business zone would be the best flags to use Panama for. The only drawback is their labor policy is a bit harsh to employers, so self employment at the micro level is probably best. As for banking, it would probably be ok, but with the US eying them, the paperwork that is required to open an account (hint: it is not just a passport), as well as lack of advanced services (such as advanced financial instruments), Singapore or Hong Kong might be better for that. However if you just need basic banking services, it still may be ok. If you have a family, it still would be relatively inexpensive, but obviously the teaching gig would not cut it, so you would probably want to have a bit more backing you up before you move. But if you just want to freelance, work on a project, or teach English, Panama might be right for you.