Permanent residency with Panama’s Reforestation Residency Visa

Dateline: Panama City, Panama

Panama has become one of the world’s best countries for obtaining a second residency and second citizenship. In many ways, the country offers incredible personal and monetary freedom for foreigners who wish to move their money to the country.

And if you’re looking for a high-quality citizenship that only takes five years to get, Panama is an excellent choice. As a well-respected country, the Panamanian passport is among the 25 best passports on earth, allowing visa-free travel to almost all of Europe as well as the entire Americas south of the United States.

Whether you’re looking to retire to Panama with a permanent resident visa that allows you to live there full-time, or you are seeking Panamanian citizenship, there are several good options to consider.

One is the Friendly Nations visa, which allows nationals of some 50 countries (mostly Western countries like the United States) to get instant permanent residence in Panama by depositing $5,000 in a bank account and obtaining on “economic tie” like a Panama company.

However, this program is not open to citizens of Asian, or even many other American countries. It also requires you to set up an offshore company, which is an excellent option if you have a business, but may not be necessary if all you want is residency that leads to citizenship.

There is another way to get residency in Panama that also allows you the potential to earn double-digit returns as a long-term investor.

By investing in hardwood forests through Panama’s Reforestation Residency Visa, anyone can take advantage of an instant permanent residency and path to citizenship, even if they are from countries deemed “less desirable” by the government for immigration.

Investing in hardwood forests has traditionally been the domain of wealthy Europeans who would buy up huge tracts of land and hold them as a managed investment that almost never went down.

Now, however, anyone can buy plots ranging from 0.25 to 12.5 acres or more and have their part of the plantation managed. It’s all part of Panama’s goal to be an eco-friendly nation and reforest lands previously logged or used as cattle grazing land.

The key thing to look for in a reforestation investment is that you own the land your trees are planted on. Don’t fall for scams that promise royalties or the right to plant your own trees.

These timber visas are simple and have two contracts per transaction. The first transaction is to purchase the land, the second is a timber management contract. You need both unless you want to be tending to your own teak or mahogany trees.

Panama Residency options via reforestation and timber investments

1. Low-cost Panama teak residency investment for Westerners

In one version, those who qualify for a Friendly Nations visa can invest as little as $18,000 in a quarter-acre teak plantation expected to yield returns in approximately 10-12 years. You must be the citizen of a Western country to qualify.

Returns for this low-priced investment are lower at around 8%, considering the costs involved with subdividing and managing such a small tract.

2. More profitable Panama residency for everyone

No matter where in the world you hail from, you can obtain instant permanent residence in Panama by investing at least $80,000 into a hardwood plantation.

Panamanian law grants reforestation visas to anyone who can pass a background check and show ownership of at least five hectares (12.4 acres) of forested land held in their name or in the name of a Panama corporation of which they are the majority shareholder.

I have had several meetings with our lawyers in Panama who tell me anyone can come to Panama. If you are from a country that does not allow visa-free access into the country, you will need a visa first, which will delay the process a bit, but you will have equal status with Western immigrant investors once you arrive.

Benefits of investing in teak

While the reforestation visa allows for any hardwood forestry investment, teak is the most common one offered. Reforestation of teak is important to Panama’s sustained resource use as soil erosion and ranching projects have decimated the country’s forests.

Teak grows quickly and easily in tropical areas like Panama and allows for trimming throughout the growth cycle, meaning you can obtain profits without waiting 25-40 years, as would be the case in cooler climates.

Teak also comes with benefits in Panama. It is tax-exempt and enjoys special free trade benefits with the United States. Teak and mahogany are the best woods for investment and have historically returned 11-15% per year as part of a long-term investment that doesn’t require immediate return of capital.

Under Panama’s forestry visa, all hardwood harvested is exempt from export, capital gains and real estate taxes for the first 25 years. You also enjoy special tax deductions if you have a tax liability in Panama (which most Nomad Capitalist expats won’t).

You do have to be careful. There are plenty of Panama teak plantation scams that have targeted investors over the years. One program even had ties with the mafia and was suspended from doing business in Europe.

As always, the people you know are even more important than the knowledge you have.

If you are interested in this opportunity, Nomad Capitalist can get you connected with the right people. Simply contact us.

Andrew Henderson

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The Nomad Capitalist team has helped hundreds of people create and execute holistic offshore plans to help them legally reduce their taxes, become dual citizens, and live the Nomad Capitalist lifestyle of success

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