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Panama

Friendly Nations Visa

Launched in 2012 to attract foreign capital and immigration to Panama, the Friendly Nations Visa grants individuals who have strong ties with the country, five years of residency in Panama leading to full citizenship. The Presidential Decree 343 of May 2012 stated that citizens of 22 friendly nations may apply for a fast-track permanent residency. Since then, other Decrees have increased the number of friendly nations to 50.

investment


Residency through Incorporation

To qualify, you will first need to show that you conduct some professional or economic activity in the country. This can be done by be hired as employee for a Panama corporation or directly incorporating a company. While there is no requirement for this company to have any employees, it cannot be a dormant entity, and must show some degree of activity. It is up to the authorities to determine if a company’s activities are adequate, though reportedly, officials tend to be quite lenient on this.

Next, you will have to prove that you are economically solvent by depositing US$5,000 in a Panamanian bank account. If you have dependents who are also applying for the visa, you will have to deposit US$2,000 per dependent in the account. Dependents include the applicant’s spouse, and children under 18 years of age, or 25 if they are full-time university students.
You will receive a temporary residency card, which is valid for one year, while their application is under review. Once it is approved, you will get a permanent residency card, and will be allowed to apply for a work permit.

The Friendly Nations Visa application process can be smooth and hassle-free if due preparations are made in advance and if you are in good hands. At Passports.IO | Flag Theory we can lead you to your Panama Residency Visa. Before, a visit to Panama is required, and it is best to set aside at least a week for this.
All in all, we have helped applicants complete this visa process for a lower cost compared to similar visa programs offered by some other countries.

Foreign-nationals eligible for the Friendly Nations Visa
Andorra, Argentina, Australia, Austria, Belgium, Brazil, Canada, Chile, Costa Rica, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hong Kong, Hungary, Ireland, Israel, Japan, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Mexico, Monaco, Montenegro, Netherlands, New Zealand, Norway, Paraguay, Poland, Portugal, San Marino, Serbia, Singapore, Slovakia, Spain, South Africa, South Korea, Sweden, Switzerland, Taiwan, United States of America, Uruguay and United Kingdom.

Citizenship
You can apply for citizenship in Panama after 5 years of legal permanent residence and full immigrant status. You may be required to show some ties to the country, as a permanent home, have spent a significant time in Panama during your residency visa, have Spanish language skills, knowledge of Panama history, culture and values, and attend to an interview. The process usually takes about 2-3 years.

Requirements


Friendly Nations Visa (Permanent Residency)
- A written letter stating professional or economic activities you will conduct in Panama.
- Proof of Economic Solvency. Deposit of at least US$ 5,000 into a Panama bank account plus US$2,000 for every dependent or proving income like a letter from your employer on company letterhead describing your salary.
- Provide documents that you are either a Board of Directors member or a major shareholder in a Panama Company (if applicable).
If you just have incorporated a Panama company: proof of corporate franchise tax payments and copy of business license.
If the company is over one year old: copy of tax return, business license, certificate of good standing.
Copies of Panama corporate Bank accounts along with proof of any income producing real estate owned by the company and any other income producing activities in Panama.
- Certified check of US$ 250 in favour of the National Treasury
- Certified check US$ 800 in favour of the National Migration Service
- Eight passport size photos
- Notarized color copy of all pages of your passport.
- Notarized color copy of your driver’s license or government-issued ID card
- Notarized color copy of your recent utility bill. This should not be older than 30 days from the date of your application
- A professional reference letter from someone from your home country who has known you professionally for considerable amount of time and can attest that you are a good person.
- A bank reference letter stating that your banker has known you for at least two years and that your account is in good standing
- Criminal background report, duly apostilled
- Apostilled copy of your ID card and/or Driving License and/or Passport.
- Letter of responsibility of dependents.
- Apostilled copies of birth certificates and marriage certificates (dependents).
- Notarized affidavit for dependents over 18 years old, stating that they are single.

Company Incorporation
- Copy of your passport (the page with photo and signature) and a government issued ID, for each director and owner or beneficiary (shareholder / client);
- A copy or original of a proof of address, such as utility bills (water, electricity or telephone), for each director or member of the company;
- A letter of reference from your lawyer or accountant (you have known for more than 2 years) to each director or member of the company.

Citizenship
- 5 testimonials acknowledging that you have been living in Panama 5 years, rendered before a Civil Court of Panama, by five witnesses.
- General medical certificate.
- Notarized copy of every page of the passport.
- Two passport photos.
- Statement renouncing your previous citizenship (may have no effect).
- Document certifying monetary solvency (such as bank reference letter).
- Social Security Fund Record (if applicable).
- Power of Attorney to request a Certificate from the Personal Identification Division attesting to the date of issuance of the Cédula (ID card).
- Examination of Spanish language and geography, history and civil rights of Panama.
- Payment of stamps for US$ 300 to receive the Letter of Naturalization (personal visit to the Immigration Dept. required)
- Appear before the Governor of the Province of Panama and swear the Panama Constitution and the respect of Panama’s laws. Payment of official fee of US$ 200.
- Register as a Panama Citizen before the Electoral Tribunal and obtain a Cédula (ID card). Payment of US$ 60 fee.

Restricted Nationalities


See above

dual citizenship


Panamanian nationality law requires an oath of renunciation of former citizenships as a condition of naturalization, de facto, Panama permits dual citizenship, as the renunciation may have not effect if is not done through the relevant authorities of the current nationality country.


Documents Required


  • Original Professional Reference Letter (Not older than 6 month)
  • Certified copy of Business License or Incorporation documents
  • Eight passport-size photos
  • Certified copy of ID Card
  • Certified copy of passport
  • Evidence of Residential Address
  • Original Bank Reference Letter (Not older than 6 month)
  • Original Police Clearance Certificate
  • Original or Certified copy of Birth Certificate (if applicable)
  • Original or Certified copy of Marriage Certificate (if applicable)
  • Affidavit of support for Dependents
  • Medical Certificate
  • dual citizenship No
  • Family members included Yes
  • land ownership Yes
  • Physical residence required No
  • Personal visit required Yes
  • Language skills required No
  • Interview required No
  • Investment Single $5,000
  • Investment Family 4 $11,000
  • Minimum annual income -
  • Time to citizenship 60
  • Time to permanent residency
  • Visa-free countries 127
  • Financing available No

Fees

government fees main applicant $800
processing fees main applicant $250
total fees main applicant $1,050

Country details

Panama
PAB
507
Panama City
North America
Spanish
3410676
The Republic of Panama is a country located in the southeast of Central America, in the isthmus of Panama, that unites South America with Central America. It limits the North with the Caribbean Sea, the South with the Pacific Ocean, to the East with Colombia and to the West with Costa Rica. Its mountainous territory is only interrupted by the Panama Canal. It has a population of over 4 million inhabitants, which half live in the metropolitan area of its capital, Panama City. Its official language is Spanish. Its legal tender currencies are the US Dollar (USD) and the Balboa (PAB), which is pegged to the Dollar at a 1:1 ratio.

Visa Free Travel

With your new passport from Panama you'll be able to access 127 countries visa free
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Taxes

Panama tax system is based on the principle of territoriality. Residents and non-residents are subject to personal income tax on their income derived from Panama. Income derived from a foreign-source may not be subject to taxation, whether it is remitted or not. Usually, an individual is tax resident in Panama if he or she spends more than 183 days in a year within the territory.

Panama taxes its residents’ income earned within the territory at a 15% on annual income between US$11,000 and US$50,000 and 25% on the excess. Interest on Panamanian government securities, interest on savings accounts and time deposits maintained with Panamanian banks are tax-exempt. Non-residents are subject to a withholding tax on source of 12.5% on their Panamanian income.

Capital Gains are taxed separately. Gains derived from the transfer of immovable properties and the sale of securities and negotiable instruments are subject to a 10% tax. If the transfer of immovable properties constitutes the main economic activity of the taxpayer, capital gains may be subject to corporate income tax.

There is a property tax between 0% and 2.10%, depending on the value of the property. The ITBMS is the Panamanian Value-added tax, and it is currently 7%.

There are no transfer, net wealth and inheritance taxes in Panama.

Regarding corporate taxation, companies in Panama are also taxed on a territorial basis. This means that income earned outside the country, remitted or not, may not be subject to taxation.

Income earned within Panama is subject to a flat tax rate of 25% on the net profits or 1.75% on gross taxable amount. Dividends are not subject to taxation. Capital Gains are taxed at 10%. Payments to non-residents on dividends, interests and royalties are subject to a withholding tax of 10%,12.5% and 12.5% respectively. Companies whose business activities are exclusively outside Panama may be exempted from withholding taxes.

Other commonly-used legal entity in Panama is the Private Interest Foundation, which is fully tax-exempt and is used as a holding entity, for asset protection (tangible or intangible), for confidentiality and privacy, estate planning, tax planning or philanthropic reasons. Learn more about Panama’s corporate taxation, legal entities, legal framework and tax treaties at incorporatios.io/panama.

This should not be construed as tax advice. Flag Theory | Passports.IO has access to a global network of qualified attorneys and accountants who can give you the proper advice for your particular circumstances. Contact us for further information.

  • Property tax Yes
  • Transfer tax No
  • Inheritance tax No
  • Net worth tax No
  • CFC law No
  • Tax residency days 183
  • Personal income tax rate 25%
  • Capital Gains tax rate 10%
  • Investment income tax rate 25%
  • Territorial taxation Yes

Procedures

Flag Theory | Passports.IO and our qualified attorney in Panama, will guide you through each step of the process to ensure that it is as fast, efficient, pain free as possible.

First, we will introduce you to several Panama Banks to open a bank account and make the required deposit (see requirements above).

We will handle the Panama Company incorporation process. Our Panama Business Formation Package include:
- Statutes (articles) in Spanish including certified English translation.
- Registration in public registry, with registration certified by stamps.
- Registration tax (“tasa única”).
- Preparation of first minutes.
- Provision of initial subscribers with resignation letter.
- Apostilles on statutes + Certificate + translations + POA (4 Apostilles total).
- 3 nominee directors.
- Certificate of Incumbency and Good Standing issued by Registered Agent.
- Dedicated Account Manager.
- Yearly structure review (or on-demand as requested).
- Access to our global network of trusted business services.

After set up the corporation, it is must to request a bank reference to the bank, which must indicate that it has sufficient funds.

We will send you the application forms and provide assistance to complete the questionnaires, translate and authenticate documents. You will have to visit Panama (we recommend for a week) do a medical examination, and register with the National Immigration Service, take photos, submit all required documents and undergo the fingerprints procedures. Your dedicated account manager and your Panama lawyer will guide you through this process.

You may ask for a temporary visa while the application is processed. It costs US$ 300 and can be obtained within 72 hours. After approximately 6 months, you will be notified if the application has been approved. During this process, it is not necessary to be in Panama but you must visit the country when the process ends to receive all documents in person. We can also assist you in the work permit application if required.

For further information on Panama’s Friendly Nations Visa, Panama Citizenship and detailed procedures, contact us for a free private consultation.

Any time there is a change or new citizenship or residency by investment program, we'll send you an update via email. Your email will not be shared.