Panama Friendly Nations Visa: Requirements, Benefits, and More

Due to its low tax regime, affordable cost of living, and warm climate, Panama has become a popular relocation destination for high-net-worth expats worldwide. The country also sports a strong healthcare system and vibrant community of digital nomads, international retirees, and investors, especially in Panama City.

Panama offers several residency routes to foreign citizens, including pensioner visas, options for digital nomads, and, importantly, a pathway for affluent investors through the Friendly Nations Visa.

In this article, we’ll explain everything you need to know about the Panama Friendly Nations Visa by discussing:

• Eligibility criteria
• The tax implications of Panama residency
• Other crucial advantages of the Friendly Nations Visa

What Is the Panama Friendly Nations Visa?

The Panama Friendly Nations Visa is a residence-by-investment initiative enabling citizens of select countries with strong economic or professional ties to Panama to obtain long-term residency. Countries whose citizens are eligible for the visa include, but are not limited to:

• United States
• United Kingdom
• Canada
• Germany
• Australia
• Canada
• Ireland
• New Zealand
• Belgium
• Netherlands

Upon initial approval, foreign citizens receive a two-year Provisional Residence Permit. After this initial period is over, they qualify to apply for permanent residency and a Panamanian ID. Investors can also apply for a work permit as long as they meet the eligibility requirements.

Visa holders can also include dependents in their application. Eligible family members include:

Family Member	Criteria
Spouse	Must be a person you’re legally married to
Children	Must be younger than 25. Children over 18 must be unmarried and full-time students

In addition to these criteria, the main applicant must submit documentation that confirms their relationship to family members, such as marriage or birth certificates.

Panama Friendly Nations Visa Requirements

To qualify for a Panama Friendly Nations Visa, applicants must meet specific requirements, including:

• Being a citizen of an approved friendly nation
• Being at least 18 years old
• Having a clean criminal record
• Demonstrating economic ties to Panama

For high-net-worth individuals, the most effective way of demonstrating economic ties would be through financial investments. To achieve this, you may select between the following options:

1. Property ownership
2. Bank deposit

Previously, it was possible to qualify for a Panama Friendly Nations Visa by starting a company with a valid business license. However, after updates to visa requirements in 2021, this route is no longer viable. 

Property Ownership

Property ownership is one of the most commonly used methods to obtain a residency visa in Panama. To qualify, you must purchase a property whose value is at least USD 200,000, either personally or via a company in which you’re a majority shareholder.

Your chosen real estate must be registered with the Public Registry of Panama. You can either use personal funds or a loan to fund the purchase, but the lending bank must be a local Panamanian bank.

If you pursue this option, you’ll also need to provide two additional documents when applying for the Panama Friendly Nations Visa:

1. A Public Registry certification confirming property ownership
2. An authenticated copy of the purchase deed

Bank Deposit

The bank deposit route requires you to deposit at least USD 200,000 into an account in a Panamanian local bank. This must be a fixed-term deposit that includes value, title, and term, and it must be free of any encumbrances. The deposit must also have a minimum duration of three years.

This deposit can be made in:

1. Your name
2. The name of a private foundation where you’re the founder or final beneficiary
3. The name of a company where you’re the final beneficiary

Along with the USD 200,000 deposit, you must also make another USD 5,000 deposit into a personal Panamanian bank account. 

When applying for a visa via this route, you must submit the proof of deposit either through a bank certification showing the value, term, and ownership, or a copy of the deposit certificate.

Required Documentation for a Panama Friendly Nations Visa

Basic documentation necessary to apply for a Panama Friendly Nations Visa includes:

Document	Additional Criteria
A valid passport	Must be valid for at least six months from the application date
Three passport-sized photographs	Must be recent
Police clearance certificate	Must be less than six months old and authenticated by the Panamanian consulate in your home country
Health certificate	Must be issued by a local doctor within the last 90 days prior to submitting the application
Power of Attorney	Must be authenticated by an Apostille or by the Panamanian consulate in your home country

You must also submit additional documentation depending on your chosen application path. If you’re including family members in your application, you must also include their certificates in your submission package.

Note that you must pay a USD 250 fee to the National Treasury and a USD 800 fee to the National Immigration Service for the repatriation fee as part of the application process.

The Tax Implications of Acquiring Residency in Panama

If you intend to obtain residency in Panama through investment, you should familiarize yourself with the country’s tax regime. The three main considerations are:

1. Tax residency criteria
2. Panama’s tax rates
3. Double taxation agreements

Tax Residency Criteria

To be liable for taxes in Panama, you must be considered a tax resident. This status requires meeting one of two criteria:

1. You’ve spent more than 183 days in Panama during the current fiscal year, either continuously or over multiple visits
2. You have permanent housing in Panama, and it’s become the center of your vital interests, either through the presence of family or due to economic activity

If you qualify to become a tax resident, you also need to obtain an RUC (Registro Único de Contribuyentes), which is your tax identification number. To acquire one, you’ll need to submit a formal request to Panama’s Dirección General de Ingresos (DGI).

You can do this either online through the DGI’s official portal or by visiting their office. The process is free and requires you to submit a valid passport, proof of legal residence in Panama, and proof of address.

Panama’s Tax Rates

Panama has a territorial tax system, which means you’re only taxed on income earned within the country. Any income you earn outside of Panama is tax-exempt, making the country an attractive option for high-net-worth expats with diverse income streams and complex investment portfolios.

Panama taxes locally earned personal income at progressive rates, split into three main categories as follows:

Income Range (USD)	Tax Rate (%)
0–11,000	0%
11,001–50,000	15%
More than 50,000	25%

Another appealing aspect of the Panamanian tax regime is that it doesn’t impose taxes on wealth, inheritance, estates, or gifts.

It’s also important to note that Panama has a 25% fixed corporate tax rate on a locally earned income. Organizations operating within specific industries and those meeting other qualification criteria can reduce their tax liability through incentives and exemptions.

Double Taxation Agreements

One potential disadvantage of Panama tax residency is the country’s relatively limited number of double taxation agreements. Countries that currently have double tax agreements with Panama are:

• Barbados
• The Netherlands
• Qatar
• Singapore
• The United Kingdom
• The United Arab Emirates
• Czech Republic
• France
• Ireland
• Israel
• Italy
• Luxembourg
• Mexico
• Portugal
• South Korea
• Spain
• Vietnam

This implies that if you’re a citizen of more than one jurisdiction with income sources in Panama, you may be subject to double taxation. Panama’s territorial taxation system means that you won’t be taxed on foreign income, but your home country may tax you on your Panamanian earnings.

In these types of situations, countries usually establish relief measures to offset the double-tax burden. For example, U.S. expats living in Panama may be able to leverage foreign tax credits to offset tax liability on the same Panamanian-sourced income.

Panama Friendly Nations Visa Benefits

Aside from the reduced tax liability, the Panama Friendly Nations Visa also has several other important benefits:

Benefit	Explanation
Low physical presence requirement	Once you’ve obtained the two-year Provisional Residence Permit, there is no physical presence requirement to maintain it. This makes the visa attractive for expats who don’t intend to immediately relocate to Panama
Low cost of living	Panama offers a comparatively high standard of living, with costs generally being notably lower than those in the U.S. and many European countries
Direct path to permanent residency	After your Provisional Residence Permit expires, you’re eligible to apply for permanent residency. Maintaining your permanent residency status requires visiting Panama for at least two days every two years
Flexible investment options	Applicants can demonstrate their economic ties to Panama through more than one route, allowing them to pick the option that best aligns with their goals

Does the Friendly Nations Visa Offer a Path to Citizenship?

A key benefit of the Panama Friendly Nations Visa is that it gives its holders an indirect path to citizenship. 

One of the main criteria to qualify for citizenship is to hold permanent residency in Panama for at least five years, provided you’ve spent at least three of those years in the country.

The initial two years of your provisional residency don’t count. This means that the earliest point at which you become eligible to apply for a Panamanian citizenship is seven years after first obtaining the Friendly Nations Visa.

Most of the obstacles you’ll face when applying for the visa or citizenship are administrative and logistical, but you can mitigate them with expert guidance. To streamline the application process and eliminate uncertainty and complications down the line, partner with the experts at Nomad Capitalist.

Make Getting the Panama Friendly Nations Visa Stress-Free With Nomad Capitalist

Nomad Capitalist is a consultancy that helps high-net-worth individuals secure residence abroad while meeting their financial and lifestyle goals. We’ve supported more than 1,500 customers in effectively managing their wealth, optimizing tax liability, and relocating their families.

We achieve this through our Action Plan, which is a tailor-made strategy based on your personal circumstances and objectives. We provide specialized assistance with every part of the strategy, from obtaining a second citizenship and legally reducing your global tax liability to setting up offshore banking. 

To get an Action Plan, you first need to complete a short online form to determine whether we’re a good fit. Once you get approved, we:

1. Schedule a one-on-one call to get more insights into your specific goals and circumstances
2. Review the information and use it to create the Plan
3. Present you with the Plan, then implement it over 12 months while handling all the administrative work
4. Provide you with lifetime support regarding any updates to the Action Plan, questions, or concerns

Partner with Nomad Capitalist today to receive your Action Plan and enjoy the best Panama has to offer without worrying about bureaucracy!