Costs of Permanent Residency in Panama will increase 1.5 times in 2022

May 27, 2021
Permanent residency in Panama by investment: how to get in 2021
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The minimum amount of investment for obtaining a permanent residence permit in Panama will increase from $300,000 to $500,000. The change will take effect on October 16, 2022. Let’s find out how to become a permanent resident of Panama in 2021 and which countries offer favorable alternatives.

How to get permanent residency in Panama: conditions for investing and maintaining residency status

In 2020, Panama has established a special path to obtain permanent residency in the country by investing in the country’s economy. The conditions for investors are set by Executive Order No. 722 of 15.10.2020.

The investment options include four options: two options with the purchase of the real estate, the purchase of shares on the Panamanian stock exchange, and the creation of a term deposit in a local bank. The money for the investment must come from foreign sources. Individuals and legal entities may transfer money for the investment.

In 2022, the minimum investment amount will increase by one option with the purchase of real estate without encumbrances, such as mortgages.

Investments for permanent residency in Panama

Option Amount of investment
till October 15, 2022
Amount of investment
from October 16, 2022
Buying real estate without encumbrances $300,000 $500,000
Purchase of real estate under a preliminary contract of sale of the object, the construction of which has not yet begun $500,000 $500,000
Buying shares on the Panama Stock Exchange $500,000 $500,000
Opening a term deposit in a bank $750,000 $750,000

The period of ownership of the investment is 5 years. Once a year, for the first five years after obtaining the Permanent Residence Permit, the investor undergoes a check at the Migration Service of Panama. He confirms that he owns real estate, shares, or a deposit. If the investor sells the real estate, redeems the shares, or closes the deposit in the bank before the deadline, the residence permit is revoked.

Additional costs include fees to the National Immigration Service and the National Treasury. If the investor’s relatives receive the Permanent Residence Permit, an additional $1,000 must be added to the fee for each family member. The fees must be paid prior to submitting the Permanent Residence Permit application.

Fee 💰 Investor payment
👨
Payment for family members
👩 🧒 👴
National Migration Service $5000 $1000 per person
National Treasury $5000 $1000 per person

Participation of the investor’s relatives. Only close relatives of the investor: spouse, children, and parents can receive a Permanent Residence Permit. There are no age restrictions. But there are nuances:

  • Only relatives living at the same address as the investor are allowed to be included in the application;
  • adult children can participate if they are studying at the university and are not married at the moment of application.

The time to obtain a permanent residence permit by investment is a month and a half: investors’ applications are considered within 30 working days from the date of submission to the Migration Service of Panama.

30 working days

the investor's application for a permanent residence permit is reviewed

How to apply for a Permanent Residence Permit. Applications are submitted at the office of the National Migration Service in Panama. It is not possible to apply online.

The investor does not need to come to Panama to apply. A legal representative, such as a lawyer, can do it instead. But if the investor wants to submit the documents to the Migration Service in person, the presence of a lawyer is still obligatory.

Is it necessary to come and live in Panama? At the stage of obtaining a Permanent Residence Permit, the investor comes to the country at least once – to pick up the Permanent Residence Permit cards at the migration office. In this case, the personal presence of the investor and his relatives in Panama is mandatory.

It is not necessary to live in Panama before or after obtaining a permanent residence permit. But to keep your residency permit, you must spend at least one day in the country every two years. If the investor flies to another country with a connection in Panama, the time of the connection counts as a day spent in the country.

Permanent residency in Panama by investment in 2021
The Panama Canal is one of the country's main attractions and a major source of revenue. 40% of Panama's GDP comes from revenues from duties on cargo and passengers through the canal

What a Permanent Residence Permit in Panama Gives

Change of tax residency. An individual can become a tax resident in Panama if he or she resides in Panama for more than 183 days in a year. A Permanent Residence Permit allows one to remain legally in Panama for such a long period of time.

A legal entity automatically becomes a tax resident of Panama if its head office is registered in the country. Heineken, Nestlé, and Nike are examples of international companies registered in Panama.

The advantage of Panama’s tax system is that it is territorial. This means that tax residents of the country pay tax only on income generated within the country.

World income in Panama is tax-free. Tax residents also do not report to the Internal Revenue Service of Panama on income and dividends from sources outside the country. There is also no tax on interest on dollar deposits in Panamanian banks.

Foreign capital transferred to Panama for investment or business purposes is also not taxed. Including tax is not levied on the withdrawal of capital from Panama.

Citizenship Perspective. Holders of a Permanent Residence Card are eligible to apply for Panamanian citizenship after five years. At the same time, Panama allows two or more passports, so the applicant does not have to renounce his citizenship in favor of Panamanian citizenship.

The applicant takes a test in Spanish, history, and geography of Panama in order to obtain citizenship.

The Panama passport opens the possibility to travel without visas to 142 countries, including the Schengen area, Great Britain, Hong Kong, and Singapore.

Return on investment. Investors who buy real estate to obtain permanent residence can lease objects. The yield on the rental of real estate in Panama is 7-8% per annum.

In five years, the investor can sell the property and return the investment. Property prices in Panama are growing by an average of 4% per year.

The yield on dollar deposits with the bank ranges from 2 to 4% per annum.

Permanent residency in Panama by purchasing real estate: the price per square meter in 2021
The average cost per square meter when buying real estate in the center of Panama's capital is $2,189

What countries offer citizenship by investment?

Cosmopolitans can obtain not a permanent residence permit, but citizenship by investment. Five Caribbean countries and Vanuatu, an island nation in Oceania, offer this opportunity.

The minimum investment amount for Caribbean and Vanuatu citizenship programs is three times less than for permanent residency in Panama. Investors do not have to take a language test and usually do not have to come to the second citizenship country either before or after obtaining the passport.

Conditions for obtaining citizenship of the Caribbean countries and Vanuatu

Country Investment Deadline to obtain a passport Participation of relatives Visit and accommodation in the country
St Kitts and Nevis From $150,000 From 2 to 6 months
  • Spouse;
  • Children under 30 years old;
  • parents;
  • Siblings
Not required
Grenada From $150,000 From 2 to 6 months
  • Spouse;
  • Children under 30 years old;
  • Parents;
  • Grandparents;
  • Siblings
Not required
Antigua and Barbuda From $100,000 From 3 to 6 months
  • Spouse;
  • Children under 30 years old;
  • parents and grandparents over 55 years old;
  • Siblings
  • Take the oath in person;
  • spend 5 days on the islands in 5 years
Dominica From $100,000 From 2 to 6 months
  • Spouse;
  • Children under 30 years old;
  • Parents and grandparents;
  • Siblings under 25 years old
Not required
St Lucia From $100,000 3-4 months
  • Spouse;
  • Children under 30 years old;
  • Parents over 65 years old;
  • Siblings under 18 years old
Not required
Vanuatu From $130,000 From 1 month
  • Spouse;
  • Children under 25 years old;
  • Parents over 50
Not required

A Caribbean and Vanuatu passport allows you to live, work, and do business in the country. If you live in the country of second citizenship for more than 183 days, you can become a tax resident. A company becomes a tax resident of the country at the time of its registration in the Caribbean or Vanuatu.

Holders of a Caribbean passport or Vanuatu passport can travel visa-free to more than 130 countries, including the Schengen states, Great Britain, Singapore and Hong Kong. Grenadian citizens can also obtain an E2 business visa in the USA and travel visa-free to China.

Benefits of Caribbean and Vanuatu citizenship

Country Number of countries with visa-free entry Return on investment Income tax for tax residents
St Kitts and Nevis 157 After 5 or 7 years 0% for individuals
33% for legal entities
Grenada 144 After 5 years From 10% for individuals
28% for legal entities
Antigua and Barbuda 151 After 5 years 0% for individuals
25% for legal entities
Dominica 143 After 3 years From 15% for individuals
25% for legal entities
St Lucia 146 After 5 years From 0% for individuals
30% for legal entities

❗ Only for income derived from a source in St. Lucia
Vanuatu 133 No From 0% for individuals
0% for legal entities

Immigrant Invest is a licensed agent for Caribbean and Vanuatu citizenship programs. If you want to travel freely around the world and start paying taxes abroad, seek advice from investment program experts.

Autor: Алевтина Калмук

The information contained in this news release has been prepared for general guidance on the topics discussed, is for information purposes only, and under no circumstances constitutes a public offer as defined by the provisions of Art. 2 of Article 437 of the Civil Code of the Russian Federation. All citations contained in this article are solely for informational purposes to the extent justified for a citation under Article 1274 of the Civil Code of the Russian Federation.

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