Featured Image

6 min read

The Top Four Visas For Moving To Panama

So you've finally decided to expatriate to Panama. Now, what are the steps to getting a Panama Visa and Residency? In this article, we're going to cover the top four visas for expats and break down everything you need to know about moving to Panama.

Panama is a great expat destination. While technically they do have their own currency, the Panamanian Balboa, which is pegged at par with the USD, they mostly just use American dollars so you don't have to worry as much about currency conversion. Panama's GDP is ranked top 8 of the 33 Latin American nations, which makes it an appealing country to do business.

Property taxes are relatively mild, ranging from 0.5% to 1%, capital gains tax is a flat 10%, and if foreign-sourced, we can legally reduce it to zero. They do have an excise tax of 7% on all nonessential purchases, and luxury taxes of 10% to 15% are applied to hotel stays, alcohol, and tobacco.

Most importantly, Panama is considered a "tax haven" as it is a territorial tax system. What this means for Panamanian residents is that any money you earn overseas is not subject to the Panamian income tax. However, if you do make your living inside of Panama as locally sourced income, you will be taxed accordingly. This is also true for companies in Panama; if your company generates income outside of Panama, it is not subjected to tax on its income.

Even if your company has income inside of Panama, the tax rate you have to pay is considered lower than the ones in European countries.

Panama also has strict bank secrecy laws. Aside from its relaxed tax policy, Panama is a great country to live in. The Panamanian economy has been growing faster than that of any other nation in Latin America. Besides being a safe and beautiful country, Panama lets you apply for Panamanian citizenship after being a permanent resident for five years.

Panama is also a tropical paradise, with incredible beaches and lush rainforests filled with tens of thousands of different plants and hundreds of different mammals and birds. So it is a great country to explore and enjoy.

 

Skyline of Panama City

Skyline of Panama City from Ancon Hill

You can go sightseeing and hiking in the dense tropical rainforest, witness the Panama Canal miracle, or even enjoy some time at the tables in one of Panama City’s many casinos. And with tons of influences from the mix of cultures that make up the Panamanian melting pot, Panamanian cuisine offers a tremendous variety of exciting dishes. You can find everything from ceviche and various seafood dishes, to hearty stews, empanadas, fresh vegetables, and a lot more.

 

Panama friendly nations visa

The Panama Friendly Nations Visa is offered to citizens of 51 countries, including North America, South America, and Europe (as well as a few other select countries like South Africa and South Korea). Here is a list of the countries:

Andorra

Argentina

Australia

Austria

Belgium

Brazil

Canada

Chile

Costa Rica

Croatia

Cyprus

Czech Republic

Denmark

Estonia

Finland

France

Germany

Great Britain

Greece

Hong Kong

Hungary

Ireland

Israel

Japan

Latvia

Liechtenstein

Lithuania

Luxembourg

Malta

Mexico

Monaco

Montenegro

Netherlands

New Zealand

Northern Ireland

Norway

Paraguay

Peru

Poland

Portugal

Korea

San Marino

Serbia

Singapore

Slovakia

South Africa

Spain

Sweden

Switzerland

Uruguay

USA

       


In order to qualify, you need to have an employment contract with a Panamanian company or to own property in Panama valued at $200,000.

Alternatively, you may also make a fixed-term deposit of $200,000 in a Panamanian bank. The nice thing about this visa if going the property route is that you can own it inside a structure like a Panama S.A. or a Panama Private Interest Foundation.

The Panama Friendly Nations Visa offers provisional residency for two years. Once the first two years are up, you can then apply for permanent residency.

Requirements for the Panama Friendly Nations Visa include:

  • A certificate of good health signed by a doctor
  • Criminal background checks from the last country you have lived in for the past two years
  • Proof of employment or investment
  • Eight passport-size photos
  • Copies of your passport and secondary ID, such as a photo card or health card or driver's license

*Legal Fees and additional expenses are not included in these investment options.

 

Panama qualified investor visa

Another option for individuals looking to move to Panama is the Panama Qualified Investor Visa. This program, created by Executive Decree 722 in 2020, and up until the fall of 2022, enables an individual to become a resident of Panama by investing $300,000. After this date, the investment will be $500,000 in Panamanian real estate, purchasing $500,000 worth of securities in the Panamanian stock market, or by making a $750,000 one-time deposit with a Panamanian bank. The standards for the Qualified Investor Visa are significantly more rigorous than those of the Panama Friendly Nations Visa as they require a much larger investment. The advantage of this program is that it is open to citizens of all nations.

Requirements include :

  • Eight (8) passport-size photos
  • A background check showing no criminal record
  • A copy of your passport
  • A certification of invested or deposited funds
  • Bank statements (either foreign or Panamanian) that demonstrate proof of the invested funds

You also have to pay an application fee of $5000 to the National Immigration Service and $5000 to the Panamanian National Treasury. There is an additional fee of $1000 above the age of 12. for each dependent you have which must also be paid to both the National Treasury and the National Immigration Service, meaning a total of $2,000 must be paid per dependent.  For example, if you are the main applicant, and are applying with your spouse and two children, the total fees will be $14,000 paid out with the application. 

*Legal Fees and additional expenses are not included in these investment options.

Related Content: Spain Golden Visa

 

pensionado visa

The Pensionado Visa is designed for retirees, but really it is open for anyone who has a minimum income of at least $1,000 USD and is 18 years of age with a guaranteed income, so employment or business income does not qualify. You need to have income from either an annuity, a government or business pension, or some other guaranteed source that is for life. And if you have any dependents, then you need an additional $250 in income per dependent. 

It is important to understand that while the Pensionado Visa offers you permanent residency, it is not a pathway to citizenship. On the plus side, you only need to visit Panama 1 day every 2 years.

In order to apply for the Pensionado Visa, you must first enter Panama on a normal tourist visa. 

Requirements :

  • Certificate of good health from a doctor in Panama
  • Proof of Income
  • Criminal record check
  • Proof of pension or another source of guaranteed income

One of the benefits of retiring in Panama is that you get substantial discounts on a number of consumer goods and purchases. These discounts are available to all Panamanian residents who are 55+ for women or 60+ for men regardless of their visa.

Panamanian seniors receive discounts on medicine, dental bills, hospital services, interest on loans, airline tickets and other forms of transportation, and a lot more. Savings typically range from 10% to 50%.

Here is a summary of the benefits you would be entitled to,

  • One-time Duty tax exemption for household goods up to a total of $10,000.
  • Duty exemption for importing a new car every two years.
  • 50% off entertainment anywhere in the country (movies, concerts, sports)
  • 30% off bus, boat, and train fares
  • 25% off airline tickets
  • 50% off hotel stays from Monday through Thursday
  • 30% off hotel stays from Friday through Sunday
  • 25% off at restaurants
  • 15% off at fast-food restaurants
  • 15% off hospital bills (if no insurance applies)
  • 10% off prescription medicines
  • 20% off medical consultations
  • 15% off dental and eye exams
  • 20% off professional and technical services
  • 50% reduction in closing costs for home loans
  • 25% discounts on utility bills
  • 15% off loans made in your name
  • 1% less on home mortgages for homes used for a personal residence

*Legal Fees and additional expenses are not included in these investment options.

You can read this article where we look at all of the immigration schemes worldwide; it’s called: The Basics Of How To Get A Second Passport Or A Second Residency

 

Timber being harvested in Panama

Timber being harvested in Panama

reforestation visa

The essence of the Reforestation Visa is that you purchase five hectares of land, and then hire a management company to plant trees on it. You own the land and can even harvest the trees when the time comes. The benefit to this visa is that your investment only costs $80,000 or $100,000 depending on which type of Reforestation Visa you get and you will be able to sell the timber when it is fully grown. You also don’t have to pay any property taxes on the land which you are helping to reforest, and you are also exempt from any capital gains taxes stemming from this project.

There are three types of Reforestation Visas.

The first requires an investment of at least $80,000 in a certified reforestation project purchasing a minimum of five hectares of land. This will grant you five years of residency, without an option to extend the process, and is not a path to Panamanian citizenship or permanent residency.

The second Reforestation Visa involves an investment of at least $100,000 in a similar project. With this slightly larger investment, you get temporary residency for two years, and then you are granted permanent resident status. This is a path to citizenship, as after five years as a permanent resident you can apply for citizenship.

The third Reforestation Visa is the express path. With this option, you invest $350,000 in a reforestation project that has been approved by the Panamanian government. In exchange, you become a permanent resident of Panama within 30 days, and with a path to citizenship after five years as a permanent resident.

Keep in mind that in addition to purchasing the land, you must also hire a management company to do the reforesting and look after your land. Still, the reforestation investment will tie up significantly less of your capital than other options, and you can feel good about helping to restore the Panamanian rainforest. At least until it is time to chop down the trees again and profit off your investment. Or let them grow if you want, it is your investment after all. In addition to not tying up a lot of your funds, you do have a reasonable prospect of profit with this investment, given the steady increase in the price of timber we have seen over the last several decades.

Requirements:

  • A clean criminal record check
  • Proof of reforestation investment in excess of minimum value
  • Passport photo
  • Copy of your passport

*Legal Fees and additional expenses are not included in these investment options.

 

BEST OF THE EXPAT WORLD

If you want the best intel from the expat world, including profitable offshore opportunities, little-known tax-saving strategies, and hard-won insights on immigration, passports, and plan-b residencies, all delivered to your inbox every single week; you may join our daily correspondence, EMS Pulse. It's currently enjoyed by over 37,000 expats and expat-hopefuls worldwide. And as a special bonus, you will also get our report on the 19 International Strategies To Grow And Protect Your Wealth Abroad, all completely FREE. Click on the link above for more information.


Expat Money Summit - Speaker Lineup

 

WORK WITH ME

I help my clients to move offshore for freedom, privacy and autonomy by focusing on the immigration, legal, and tax issues that you will face when becoming an expat. If you would like to work one-on-one with me on getting out of Canada or the USA (or setting up a Plan-B location), then read this important letter and fill in an application form to become a Private Client. My fees are not cheap; however, I can assure you that when you work with a professional firm like ours, the results will be worth it.

Mikkel Thorup

Written by Mikkel Thorup

Mikkel Thorup is the world’s most sought-after expat consultant. He focuses on helping high-net-worth private clients to legally mitigate tax liabilities, obtain a second residency and citizenship, and assemble a portfolio of foreign investments including international real estate, timber plantations, agricultural land and other hard-money tangible assets. Mikkel is the Founder and CEO at Expat Money™, a private consulting firm started in 2017. He hosts the popular weekly podcast, the Expat Money Show, and wrote the definitive #1-Best Selling book Expat Secrets - How To Pay Zero Taxes, Live Overseas And Make Giant Piles Of Money.

Recent Posts

Protecting Your Wealth With A Trust In Guernsey

For almost 1000 years, Guernsey has remained an autonomous jewel in the Channel Islands. Its rich history can be traced back to the Neolithic, with...

Read More

Obtaining Citizenship Under The Mercosur Agreement

Founded in 1991, the Mercado Común del Sur (MERCOSUR in English) was the first step in South American integration. It covered many areas, such as...

Read More

Benefits Of Obtaining Citizenship In The Andean Community

Most people have heard of the Mercado Común del Sur, better known as Mercosur, but you might be surprised to learn that it was not the first regional...

Read More