If you’re looking for the easiest permanent residency program out there, then look no further than Panama.
In this article you’ll learn about the two best Panamanian permanent residency visas and how you can get an excellent Panamanian second passport & citizenship.
And as an additional bonus you’ll also learn about the incredible benefits you could get from Panama’s unique territorial tax system.
In This Article…
Panamanian residency is an outstanding option for US citizens – and especially for retirees.
Expats here live very well. English is widely spoken. You get a high standard of living – Panama City is much like Miami – but at a reasonable cost. The country is close to home. Medical services are excellent, and the weather is great much of the year.
There’s a lively expat community. The currency is pegged to the dollar, so there are no exchange rate surprises. Me and my team have been coming to Panama for 15 years, and each time we return, we see exciting growth.
Best of all, the government makes immigration to Panama and getting permanent residency really easy for foreigners.
How to get Panama Residency
There are no fewer than 52 ways to get residency in Panama. But two stand out from the pack: the Friendly Nations Visa and the Panamanian retirement visa (pensionado). Both can lead to full citizenship, if you want an excellent second passport.
Panamanian residency gives you and your family the right to live, work, invest, and retire in Panama…
And one of the best things about Panamanian residency is that once you obtain it, you don’t actually have spend much time in the country to maintain it.
This makes it an excellent Plan B option. You can continue living in your home country, but if the conditions ever deteriorate, you’ll always have another place you can go to where you are legally allowed to live and work. It’s an excellent “escape hatch” offering a great lifestyle.
And Panamanian residency requirements have remained surprisingly simple in 2017 and 2018. Let’s start with the most popular residency option.
Option #1: Panama’s Friendly Nations Visa
The Panamanian Friendly Nations Visa program was enacted in 2012 and offers a simple way to obtain permanent residency in Panama. Citizens of 50 countries with close cultural and economic ties to Panama qualify.
Residency through the Friendly Nations program can also lead to .
This program is likely the most straightforward way to obtain residency in any country on Earth.
The list of the friendly nations includes the US, Canada, Australia, the UK, Israel, South Africa, every country member of the European Union as well as several Asian and Latin American countries.
One exception is Italy– It’s not included in the friendly nations program, but only because Panama and Italy have had a bilateral agreement with very similar terms since 1966.
Citizens of any of these countries can easily obtain residency in Panama just by demonstrating ‘economic activity’ in the country.
This doesn’t require you to engage in business in Panama: You can satisfy this requirement simply by registering a Panamanian corporation and making a reasonable deposit at a local bank – $5,000 to $10,000 is usually enough.
(Once you obtain a Panamanian residency, you can dissolve the corporation and withdraw the money, if you wish.)
Conveniently, you can include children up to the age of 18 in your application (up to 25 if he or she is still a full-time student).
And once you submit your Panamanian residency application, you’re free to leave the country and come back a few months later to collect your documents and ID card.
Moreover, you don’t have to actually live in Panama. You don’t need to maintain a home there.
In fact, Panama’s immigration code now only requires you to renew your visa after two years (which you will need to do in Panama). Aside from that, you don’t really need to spend any time on the ground.
So, the Friendly Nations Visa will work for those who want to immigrate to Panama, as well as for those who want to stay home.
But then again, this is a really great place to spend time. And there are nonstop flights to cities all over the US, Canada, Europe, Latin America, and the Caribbean, so it’s a convenient place to travel to and from.
Panama has the easiest residency program…
Until this happens…
This program has been in place since 2012, but just like with everything, residency programs are subject to supply and demand dynamics.
Panama’s economy will eventually start to cool off. Real estate prices will get too high. And we’ll hear grumblings about “foreigners taking jobs and driving the prices up.”
It’s inevitable. This program won’t be around forever.
If you are interested and hail from one of the 47 “friendly” nations (plus Italy), you should take action sooner rather than later.
Option #2: Panama’s Retirement (Pensionado) Visa
The Panamanian retirement (pensionado) visa is another great option to consider and is designed for retirees who can prove a pension of at least $1,000 from a government or a private company. This amount includes both spouses.
You must prove the pension is for life. The Panamanian government wants to make sure you can cover your expenses while in the country.
The pension threshold goes down to $750 if you purchase a property in Panama with a value of at least $100,000.
Panama was one of the first countries in the world to establish a program specifically aimed at attracting retirees.
They promised pensionado visa holders exclusive discounts and many attractive benefits. The list of retiree benefits is impressive. Here are just a few examples:
- 50% discount on cinemas, theaters, sports, and other public events.
- Discounts on public transportation, including airfares
- Discounts on hotels
- 25% discount on eating out in the restaurants
- 15% discount on eating in fast food outlets (national and international franchises)
- 15% discount on certain services of hospitals and private clinics
- 20% discount on medicines
- 20% discount on services of many professionals such as plumbers, electricians…
- 50% discount on closing costs and loan commissions
- 1% discount on the interest rate on mortgage home loans for your own use
- Property tax freeze on your Panamanian real estate
- 25% discount on electricity and water bills
- Even a 20% discount on coffins and urns
The pensionado program worked, and foreigners showed up en masse.
In your application, you can include your kids under the age of 18 (up to 25 if still full-time students), but you’ll need show an additional pension amount of $250 per dependent besides your spouse.
How To Get A Panama Passport And Citizenship
Getting a Panama Passport and Citizenship is very simple…
- Step 1: Get permanent residency through one of the options above
- Step 2: Maintain the residency for five years (But you don’t actually need to spend the entire time in Panama)
- Step 3: After five years of residency you can apply for citizenship by naturalization and receive your Panamanian second passport
As you can see, qualifying for a Panamanian Passport is very easy.
In fact, it’s one of the easiest passports in the world to qualify for – you don’t have to spend any time in the country to maintain your residency, outside of mandatory renewals. And after five years of residency, you will be eligible for naturalization and a second passport in Panama.
However, if naturalization – and not just residency – is your goal, it is always better to show your commitment and spend significant time in Panama.
Also, it won’t hurt to obtain as many visible ties to the country as possible – you can own property in Panama, start a business, get a job, or pay local taxes (even if a little), etc.
You always want to show the government that you are serious about your new homeland.
And Panamanian passport is worth the effort. As of 2018, a Panamanian passport allows visa-free travel to 129 different countries including Europe, much of Asia, and Latin America. I expect it will soon be on the US and Canada’s visa-waiver lists as well.
And it brings no downside: There is no military conscription or US-style worldwide taxation.
Not to mention, once you obtain a second passport in Panama, your children, grandchildren, and all future descendants will be entitled to Panamanian nationality as well.
Although Panama’s second passport program is an excellent option, it’s not the only one. I encourage you to .
Panama Dual Citizenship
Generally, Panama does not recognize dual citizenship and during the Panamanian naturalization process, the government will require you to take an oath of renunciation of your former citizenship.
However, it doesn’t mean you will lose it – this oath has zero legal power back in your home country.
Sovereign Man’s research team has discussed this issue with a seasoned professional on the ground, and he confirmed that not a single client of his had to renounce his/her original citizenship.
To relinquish your previous citizenship, you must comply with specific renunciation protocols established by your home country. An oath you give to some other government is never one of them.
(Here are the US’s renunciation requirements, for example.)
And since Panamanian authorities do not demand any evidence that you indeed renounced your previous citizenship, this act is merely symbolic.
Panama’s Territorial Tax System
Another pleasant thing about Panama is its territorial tax system.
Panamanian tax residents and companies must pay tax on their Panamanian-sourced income only. Panama does not tax the worldwide income of its tax residents.
Tax Residency vs Legal Residency
Remember that tax residency in a country is different from legal residency.
When we talk about obtaining temporary or permanent residency in a country, we talk about legal residency. This residency gives you a right to reside, study, work, run business in the country.
And tax residency obligates you to follow tax laws of that country. Once a tax resident, you’re in the county’s taxation net. Requirements vary, but you usually become tax resident after spending 183 days a year in a country, regardless of your legal residency status.
If you own a rental property in Panama or operate a restaurant there, you’re going to pay tax. But if you’re an independent investor or run a business (especially online) that generates income outside of Panama, you won’t pay a dime to Panamanian tax authorities.
Approximately 35 other countries in the world use territorial tax system, including Hong Kong, Singapore, Malaysia, Costa Rica, Georgia, Belize, and many others.
Gaining a second residency —especially when it’s so easy to establish – makes sense no matter what.
After all, if you ever want to get out of Dodge, you don’t want to start figuring out ‘Where do we go?’ while you’re packing your bags.
And residency in Panama is a great option to consider.
Moreover, your Panamanian residency can potentially lead to citizenship through naturalization, with all the additional benefits that brings.
Since the Friendly Nations Visa program probably won’t be around forever, you should learn more about it now and decide if it’s the right one for you.
Of course, there are also many other residency options — Chile, Argentina, Philippines, Malaysia, Andorra, Portugal, Spain, Belgium, to name a few. If you already are one of our premium members, you have access to in-depth intelligence reports on all of them and more.)