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|
|Purchase of real estate under a preliminary contract of sale of the object, the construction of which has not yet begun|
|Buying shares on the Panama Stock Exchange|
|Opening a term deposit in a bank|
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|
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.
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.
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.
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||
|Grenada||From $150,000||From 2 to 6 months||
|Antigua and Barbuda||From $100,000||From 3 to 6 months||
|Dominica||From $100,000||From 2 to 6 months||
|St Lucia||From $100,000||3-4 months||
|Vanuatu||From $130,000||From 1 month||
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.