Permanent residence in Panama
There are many reasons why Panama is an attractive country for foreign investment. A dollarized economy, the stability of its banking system; the logistic importance of the Panama Canal and its strategic position for the connection with the rest of the continent, are just some of the reasons that make Panama one of the preferred places for investors.
In light of the arrival of foreigners, Panama laws have adapted so that specific immigration types have been created to make it easier for foreigners to obtain legal status in the Republic of Panama.
In spite of the broad list of immigration options, for the purposes of this article, we will focus on two manners to obtain Permanent Residence in Panama:
- Nationality of the requesting party:
With the enactment of the Executive Order No. 1174 in 2013, citizens from around 50 countries were benefited as they could choose to have the status of Permanent Residents if they show a professional, economic or investment relation with the Republic of Panama.
It is known as the migration permission of “FRIENDLY COUNTRIES”, through which the requesting party must show the existence of economic or professional activity with the country as well as their sustainable creditworthiness by submitting a certificate of a bank from the city evidencing a minimum balance of four (4) average figures.
This process takes between 4 and 6 months and automatically grants the status of Permanent Resident without the need to renew it regularly.
This option is offered to foreigners, regardless of their nationality, that invest in the country a minimum amount of US$300,000.00 in any of the following manners:
- Fixed- term deposit held by the requesting party at a bank with general license in the Republic of Panama, for a minimum period of 3 years;
- The purchase of real property located in the Republic of Panama, for a minimum amount of US$300,000.00. This purchase may be made for oneself, a corporation of which the requesting party is a shareholder or for a private interest foundation of which the requesting party is a founder and beneficiary.
- A combination of real property and fixed term deposits for an amount of US$300,000.00 or more.
The most important item for this migration category is to show the Migration National Service that funds for the acquisition of real property and/or the opening of the fixed term deposit are foreign and free from taxes.
In this particular case, a temporary residence is given for two years which allows requesting for permanent residence in the country afterwards.
In both cases, Permanent Residence entitles the foreigner to receive from the Electoral Court a Permanent Residence Card or “E Card” without having to reside permanently in the country and with the possibility to extend this migration category to their dependents (spouse, children under 18, dependent parents, etc.).
Obtaining Permanent Residence in the Republic of Panama offers the following advantages:
- Second Residence: A “B- Plan” for nationals of some countries with difficult political and economic situations.
- Obtaining a driver’s license that may be renewed every 4 years.
- Obtaining bank loans under the same terms as a Panamanian citizen.
- Choosing to be a Panamanian natural within the following 5 years (according to nationality). This will allow obtaining a Panamanian Passport and carry out activities restricted to Panamanians, for example: act as a lawyer or professions related to health.
- With proper planning, receiving Tax Residence in Panama.
A very important aspect that you need to consider is that Permanent Residence from the migration point of view does not make you automatically become a Tax Residence from Panama. These are separate processes before independent institutions with different requirements, and the most important one is to show a minimum stay in the national territory of one hundred eighty-three (183) calendar days or alternate days in a tax year or the year before (Section 762-N of the Tax Code). Those natural persons that have established their permanent residence or vital interest center within the territory of the Republic of Panama will be considered tax residents.
It may seem difficult but professionals with experience in legal issues from K&B FAMILY OFFICE will guide you to choose the most proper migration category for you and your family.
For more information, please contact:
Head of Legal & Human Resources
+ (507) 209 2944