Getting a second residency can be a challenging thing. Economic citizenship programs and fast track residency options like those in the European Union are expensive and require a lot of due diligence.
Fortunately, endless bureaucracy is not the case when it comes to obtaining residence in Panama- at least not any more.
Last year, the Panamanian government passed Executive Order 343 and introduced its “Friendly Nations visa”, a permanent residence scheme for citizens of select “friendly” countries with economic or professional ties to Panama.
Since its introduction, the government has added a total of 48 countries that are eligible for near instant permanent residence in Panama.
These countries are: Andorra, Argentina, Australia, Austria, Belgium, Brazil, Canada, Chile, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hong Kong, Hungary, Ireland, Israel, Japan, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Monaco, Marino, Montenegro, Netherlands, New Zealand, Norway, Poland, Portugal, Serbia, Singapore, Slovakia, Spain, South Africa, South Korea, Sweden, Switzerland, Taiwan, United States of America, Uruguay, and the United Kingdom.
(In case you’re wondering why Italy is about the only EU country not on the list, it is because Italy and Panama have an existing immigration agreement that allows Italians to move to Panama with even more ease than this Friendly Nations Visa allows.)
Qualifying for this residency visa is remarkably easy. My contacts in Panama tell me the process could take up to nine months, but other than a visit to Panama, the process isn’t that bad.
However, the barrier to entry is unbelievably low. You simply need to deposit $5,000 in a Panamanian bank account (plus $2,000 for each additional dependent, if applicable) and demonstrate some tie of “economic activity” to Panama in the form of starting or buying a business, buying real estate, or even getting a job.
There are a few restrictions to note – like that foreigners can’t be owners of a Panamanian retail business – but the list of restrictions is pretty small.
In fact, simply forming an offshore company in Panama could be enough to qualify. If you already own an online business, have an investment portfolio, or trade, you already need an offshore company, and Panama isn’t a bad place to set one up.
Panama has historically offered a number of options to live there, such as forestry visas and visas for those who pumped up the tourist industry. Like most permanent residency options, these were geared at a certain type of expat who wanted to live and invest in Panama.
Now, almost anyone who wants to establish a base outside of their home country can qualify to set up shop in Panama. While countries like Singapore are making it phenomenally more difficult to immigrate there, Panama – which I believe could be the Singapore of the Americas – is welcoming immigrants with open arms.
This is exactly the type of program I’ve long thought some country should implement.
Of course, having a second residency offers a number of benefits including, for most people, the ability to relieve yourself of tax obligations in your home country.
That said, Panama offers a five year timeline to naturalization. Under the Friendly Nations Visa, you could spend some time in the country each year and apply for citizenship five years down the road.
There is no hard and fast rule as to how much time you must spend in Panama, although one lawyer I spoke to suggested visiting once a year.
Panama’s low-cost and easy pathway to a second passport allows you, at least technically, to keep your existing citizenship if you wish. While Panama requires you to relinquish other citizenships, countries like the United States don’t view anything you do in Panama as “real”.
And since Panama taxes income on a territorial basis, only income with a Panamanian source will accrue a local tax obligation. (Keep in mind, however, that if/while you are a US citizen, the IRS does not allow Panamanian Sociedad Anonima corporations to be used as a pass-through entity for tax purposes, so make sure you consult with your legal and tax professionals.)
Panama doesn’t offer the rich a talent pool to recruit from like Hong Kong or Singapore do, but talent here is decent and labor costs are relatively cheap.
That said, the standard of living there is relatively high while offering a more seamless transition for US and North American-based expats who are hesitant to take the first step.
If you’re looking for an easy second residence in a desirable place to live, Panama’s Friendly Nations Visa ticks many of the boxes you’ll want.
If you’d like help getting started with second residency in Panama, check out our second passports page and request a consultation.
Latest posts by Andrew Henderson (see all)
- Myths about Giving Up American Citizenship - March 25, 2019
- How to Open an Offshore Bank Account in Bermuda - March 20, 2019
- How to Open an Australian Bank Account as a Non-Resident - March 19, 2019