On October 16, 2020, Decree 722 of October 15, 2020 was published, creating the category of Permanent Resident (PR) as a Qualified Investor (QI) in Panama.
To be eligible, the applicant must make an investment (typically in real estate) for a minimum of US$300,000 from a foreign source. In October 2022, the investment amount will increase to US$500,000. To keep permanent residence, the applicant must maintain the investment for a minimum period of five years.
In order to offer a more simplified and agile service to the investor, the government has created a “fast-track” route; applications under this category may be submitted prior to entering Panama through a local lawyer, on the condition that prior to the issuance of the immigration card, the filiation process is completed. This request must be resolved in a period of no more than 30 business days. After this period, the applicant will only need to visit Panama for one week to obtain PR.
The chief advantage of the QI route to PR in Panama is that the investor doesn’t actually need to travel to Panama until the PR is ready. All other routes to PR require multiple visits to the country ahead of time, and also mandate longer waiting periods before qualifying for the PR; anywhere from six to 24 months, depending on which route the investor uses.
Once you obtain your residency, you only need to spend one day every two years in the country to maintain your permanent resident status. A simple transfer through the airport would also qualify as a day, for these purposes.
Tax residence from Day 1
Panama has a territorial tax system, where Panamanian tax residents and companies must pay tax on their Panamanian-sourced income only. Panama does not tax the worldwide income of its tax residents. Investors who obtain their PR in Panama through the new QI program, uniquely, are able to obtain a tax certificate from the country immediately upon approval of the PR application. That’s because applicants through this route will have a substantive presence in the country from Day 1; not only will they be PR holders, they will also have a certificate of property ownership, potentially a local company, a bank account, and other “genuine links”.
Subsequent to the approval of PR, Panama offers a very clear and predictable path to citizenship; After between one and five years of permanent residency (depending on your nationality), you can apply to get your Panamanian citizenship, which gives you visa-free or visa-on-arrival access to 142 countries and territories.
While nationals of most countries will need to wait five years to qualify for citizenship, citizens of the following countries can qualify on an expedited schedule:
- Uruguay: 3 years.
- Argentina, Ecuador, Spain, Honduras, Mexico, Nicaragua, and Peru: 2 years.
- Colombia and El Salvador: 1 year.