If you’re looking for the easiest permanent residency program in the world, then look no further than Panama.
In this article you’ll learn about the two best Panamanian residency visas, and how you can obtain a Panamanian passport and citizenship with ease.
And as an added bonus, you’ll also learn about the incredible benefits you can get from Panama’s unique territorial tax system.
IMPORTANT UPDATE: JUNE 3, 2021
As far as second, “paper residencies” go, the Panama Friendly Nations Visa Program was one of the best and easiest options we have seen thus far.
But, as we predicted, this deal was too good to last.
As of August 19th, 2021, the program changed — and became far less affordable. (The requirements for the Panama retirement (pensionado) visa, however, remains the same.)
So if you’re serious about getting an excellent Plan B in place, now is the time to pull the trigger…
Starting from August 19th, 2021, in order to qualify for the Panamanian Friendly Nations visa, you will need to either:
Or…
Interestingly, the new law states that you will be able to finance the real estate purchase with a local bank, which can lower your immediate cash outlay. This is a positive if you actually plan to purchase a piece of real estate in Panama.
Another significant change is that from the beginning, you will only be able to claim temporary residency in the country, and not permanent residency, as was previously the case.
Two years thereafter, you will be able to upgrade it to permanent status, but only after proving that you still maintain your Panamanian employment or real estate investment.
As you can see, the conditions of the Friendly Nations Visa were tightened up substantially.
In this In-Depth Article...
Panama Is Not The Only Easy Residency & Passport Option:
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Panama has the easiest residency process in the world. You can obtain permanent residency in just a few months, and the process is inexpensive.
Obtaining permanent residency in Panama is an outstanding option, particularly for US citizens – and especially for retirees.
Expats here live very well. English is widely spoken. The standard of living is high – Panama City is a lot like Miami – but much cheaper.
And retirees enjoy tremendous benefits like substantial discounts on events, restaurants, airfares and cinemas.
The country is close to the US – just a 3-hour flight from Miami — medical services are excellent, and the weather is great pretty much all year.
Panama is a 100% dollarized economy, and you will only deal with US dollars there.
The Sovereign Man team has been coming to Panama for over 15 years, and each time we return, the country is more developed, growing and exciting.
To top it all off, the government doesn’t just make it easy to obtain residency, but also to maintain it.
Some countries make you jump through bureaucratic hoops or require you to spend several months per year in-country to maintain your residency, but not Panama.
You only need to spend one day every two years in the country to maintain your permanent resident status.
How to maintain your permanent residency status
If you are absent for more than two years, the immigration authorities may cancel your permanent residency. But the good news, if you were absent for less than six years, there is a procedure to recover it upon your next visit to Panama.
(Curiously, Italian citizens are spared from this requirement.)
And if you are absent for more than six years, you will need to start the procedure all over again.
However, if you plan to apply for a passport in Panama, for better chances of naturalization, we recommend you visit Panama every year.
And after five years of permanent residency, you can apply to get your Panama passport and citizenship, which gives you visa-free access to 121 countries including all of Europe and the United Kingdom.
The Panama passport is ranked 64 out of 198 countries on our Global Passport Ranking.
The two best options for Panama Residency are...
There are more than 50 ways to get residency in Panama. But two stand out from the pack: the Friendly Nations Visa, and the Panamanian retirement visa (pensionado).
Both can lead to full citizenship, and an excellent second passport.
Panama residency gives you and your family the right to live, work, invest, and retire in Panama.
One of the best things about having Panama residency is that once you obtain it, you don’t have to spend much time in the country to maintain it.
This makes it an excellent Plan B option.
You can continue living in your home country, but if the conditions there ever deteriorate, you’ll always have another place to go where you are legally allowed to live and work. It’s an excellent “escape hatch” offering a great lifestyle.
And Panamanian residency requirements remain surprisingly simple even in 2021.
Let’s start with the most popular residency option…
Panama enacted its Friendly Nations Visa program in 2012 and amended it in 2014. The program offered citizens of 50 countries with close cultural and economic ties to Panama a simple way to obtain permanent residency there.
Residency through the Friendly Nations program can also lead to Panamanian citizenship and a passport.
This program was likely the most straightforward way to obtain residency in any country on Earth if you come from one of the nations “friendly” to Panama.
The list of friendly nations includes the US, Canada, Australia, the UK, Israel, South Africa, almost every country member of the European Union as well as several Asian and Latin American countries.
| Europe | North & South America | Asia Pacific & Africa |
|---|---|---|
| Andorra | USA | Australia |
| Austria | Canada | Hong Kong |
| Belgium | Argentina | Israel |
| Croatia | Brazil | Japan |
| Cyprus | Chile | New Zealand |
| Czech Republic | Costa Rica | Singapore |
| Denmark | Mexico | South Korea |
| Estonia | Paraguay | Taiwan |
| Finland | Uruguay | South Africa |
| France | ||
| Germany | ||
| Great Britain | ||
| Greece | ||
| Hungary | ||
| Ireland | ||
| Italy * | ||
| Latvia | ||
| Liechtenstein | ||
| Lithuania | ||
| Luxembourg | ||
| Malta | ||
| Monaco | ||
| Montenegro | ||
| Netherlands | ||
| Norway | ||
| Poland | ||
| Portugal | ||
| San Marino | ||
| Serbia | ||
| Slovakia | ||
| Spain | ||
| Sweden | ||
| Switzerland |
The notable exception to this program is Italy. It isn’t included in the Friendly Nations program because Panama and Italy have had a bilateral agreement with very similar terms since 1966.
However, citizens of any of the above countries can easily obtain residency in Panama just by demonstrating ‘economic activity’ in the country.
This doesn’t require you to engage in business in Panama: You can satisfy this requirement simply by registering a Panamanian corporation and making a reasonable deposit at a local bank – $5,000 to $10,000 is usually enough.
(Once you obtain a Panamanian residency, you can dissolve the corporation and withdraw the money, if you wish.)
Conveniently, you can include children up to the age of 18 in your application (up to 25 if they are still full-time students).
And once you submit your Panamanian residency application, you’re free to leave the country and come back a few months later to collect your documents and ID card.
Moreover, you don’t have to actually live in Panama. You don’t even need to maintain a home there.
In fact, Panama’s immigration code now only requires you to visit Panama every two years to maintain your permanent residency. Aside from that, you don’t really need to spend any time on the ground.
So, the Friendly Nations Visa will work for those who want to immigrate to Panama, as well as for those who want to keep on living in their country of origin.
But then again, this is a really great place to spend time. And there are non-stop flights to cities all over the US, Canada, Europe, Latin America and the Caribbean, so it’s a convenient place to travel to and from.
Panama was one of the first countries in the world to establish a program specifically aimed at attracting retirees.
Panama’s retirement (pensionado) visa is a great option to consider if you are retired and collect a pension of at least $1,000 from a government or a private company. This amount includes both spouses.
You must prove the pension is for life. The Panamanian government wants to make sure you can cover your expenses while you are in the country.
The minimum pension threshold goes down to $750 if you purchase a property in Panama with a value of at least $100,000.
The program offers pensionado visa holders a range of exclusive discounts and many attractive benefits. The list of retiree benefits is impressive.
Some perks of retiring in Panama on a Pensionado Visa include:
So far, the Pensionado Visa program has been tremendously successful, and foreigners have shown up en masse.
In your application, you can include your kids under the age of 18 (up to 25 if still full-time students), but you’ll need to show an additional pension amount of $250 per dependent besides your spouse.
Panama recently launched four new “Golden Visa” type programs. These investment programs are aimed at attracting investors from countries who aren’t eligible for the Friendly Nations Visa program. The four new Panama Residency By Investment options include:
Under the four investment options, “Qualifying Investors” can attain Panamanian residency by meeting relatively simple requirements. And unlike with the Portugal Golden Visa Program, you can hold the investment in your own name, or via a legal entity of which you are the ultimate beneficiary.
Qualifying investments must be held for at least five years. The investment can be made by visiting Panama in person, or remotely via a third party, through power of attorney.
Find out more about the Panama Residency By Investment program here.
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It is very simple to become eligible for both a Panama passport and citizenship…
As you can see, qualifying for a Panamanian Passport is very easy.
In fact, it’s one of the easiest passports in the world to qualify for – and the requirement to spend time on the ground is minimal.
However, if naturalization – and not just residency – is your goal, it is always better to show your commitment and spend significant amounts of time in Panama.
Also, it won’t hurt to obtain as many visible ties to the country as possible – you can own property in Panama, start a business, get a job, or pay local taxes (even if a little).
You always want to show the government that you are serious about your new homeland.
Have people received a Panama Passport yet?
As of October 2020, we don’t know whether spending just the minimum time required on the ground – one day every two years – will result in a passport.
You will likely have to show more significant ties to Panama– in the form of property ownership, investments, and regular time spent in the country.
This visa type itself was introduced only in May of 2012, with some of the first foreigners starting to apply for residency via the program in early 2013. These residents became eligible to apply for naturalization in early 2018 (after five years of residency).
The naturalization process itself is never fast, and usually takes about two years in any country.
Once we know the first results based on minimum stays only, we will update this article.
Regardless, a Panamanian passport is well worth the effort. As of October 2020, the Panamanian passport affords the bearer visa-free travel, or a visa upon arrival, for 121 different countries including Europe, much of Asia, and Latin America.
And there are virtually no downsides to having Panama passport and citizenship : there is no military conscription or US-style worldwide taxation.
Not to mention, once you obtain a second passport in Panama, your children, grandchildren, and all future descendants will be entitled to Panamanian nationality as well.
Generally, Panama does not recognize dual citizenship. During the Panamanian naturalization process, the government will require you to take an oath of renunciation of your former citizenship based on taking an oath of renunciation and allegiance.
However, it doesn’t mean you will lose it – this oath has zero legal power back in your home country.
Sovereign Man’s research team has discussed this issue with a seasoned professional on the ground, and he confirmed that not a single one of his clients had to renounce their original citizenship.
To relinquish your previous citizenship, you must comply with specific renunciation protocols established by your home country. An oath you give to some other government is never one of them.
(Here are the US’s renunciation requirements, for example.)
And since Panamanian authorities do not demand any evidence that you indeed renounced your previous citizenship, this act is merely symbolic.
There are many options that allow anyone to get a second passport.
Download our free Easiest Citizenship & Passport Comparison Sheet and see all the options you have at a glance.
Inside you’ll find…
This sheet could save you tens of thousands of dollars and YEARS of time.
Another beneficial thing about Panama is its territorial tax system.
Panamanian tax residents and companies are required to pay tax on their Panamanian-sourced income only. Panama, therefore, does not tax the worldwide income of its tax residents.
Remember that tax residency in a country is different from legal residency.
When we talk about obtaining temporary or permanent residency in a country, we talk about legal residency. This residency gives you a right to reside, study, work, run business in the country.
Tax residency obligates you to follow tax laws of that country. Once a tax resident, you’re in the county’s taxation net. Requirements vary, but you usually become tax resident after spending 183 days a year in a country, regardless of your legal residency status.
This means that if you own a rental property in Panama or operate a restaurant there, you’re going to pay local tax.
But if you live in Panama and earn your income outside of Panama – through an online business, consulting, or any number of other ways – you will not be liable to pay most taxes to Panama.
That makes Panama an excellent choice for independent investors or people who run a business (especially online) that generates income outside of Panama, because you’ll pay very little (if anything) to the Panamanian tax authorities.
However, if you live and work in Panama full-time, Panamanian tax authorities may argue that since you are based in Panama, you need to pay certain self-employment taxes to the country.
Talk to your Panamanian tax advisor to see how to mitigate this issue.
US citizens can even use the Foreign Earned Income Exclusion to live in Panama, which would slash their US tax bill to zero on any income below $107,600 in 2020.
More Strategies On How To LEGALLY Slash Your Taxes
Moving to Panama and taking advantage of the Foreign Earned Income Exclusion is just one way to slash your taxes…
Consider downloading our free Perfect Plan B Guide.
Inside you’ll learn no-brainer strategies on how to legally reduce your taxes including…
You’ll also learn many other useful strategies, such as how to generate strong returns while taking minimal risk, and how to obtain a valuable second passport.
If you don’t have time to read the full article, here are the most frequently asked questions we get…
Panama is the easiest country in the world to obtain permanent residency. Among the many available options, the easiest path is either the Pensionado Visa for retirees, or the Friendly Nations Visa. Click here now to see if your country is on the list.
You become eligible for Panamanian citizenship and passport after just five years of maintaining permanent residency in the country. And Panama offers some of the easiest ways in the world to gain residency. Click here to learn about the two most popular residency options.
Officially, when you become a Panamanian citizen, the government requires you to take an oath of renunciation of your former citizenship. However, this oath has zero legal power back in your home country. Panama requires no proof of renunciation, and renunciation is symbolic. Click here for what our legal contacts on the ground said.
Permanent residency in Panama is easy to obtain, and requires little time on the ground to maintain. And, after five years, you become eligible to apply to become a Panamanian citizen, which comes with a strong passport. Click here to learn about more benefits.
Obtaining residency in Panama (and ultimately a second passport) makes sense no matter what, especially because it is still so easy today.
After all, if you ever want to get out of Dodge, you don’t want to start figuring out ‘Where do we go?’ while you’re packing your bags.
Moreover, your Panamanian residency can potentially lead to citizenship through naturalization, with all the additional benefits that brings.
Since the Friendly Nations Visa program probably won’t be around forever, you should learn more about it now and decide whether it’s the right option for you.
But there are other options too. Here are a few more in-depth articles and free resources you may be interested in.
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Easiest Citizenship & Passport Comparison Sheet
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The Four Passports ANYONE Can Obtain
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Perfect Plan B Guide
And learn aboit no-brainer strategies on how to legally reduce your taxes including…
You’ll also learn many other useful strategies, such as how to generate strong returns while taking minimal risk, and how to obtain a valuable second passport.
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