Visas to invest and reside in Panama

Its laws and regulations for the creation of companies, known as Special Economic Zones, allow local and foreign investors to establish their businesses in special areas that have a variety of tax, immigration and labor incentives with the main objective of developing different types of activities and promoting international trade, manufacturing production and complementary services.

This nation has an immigration standard that allows residency and/or the granting of visas to any foreigner who meets certain parameters. The following are the visa categories most requested by foreigners in Panama:

- Friendly Nations Visa Program ("Friendly Nations Visa Program"): This is a permanent residence permit for foreigners from specific countries that maintain friendly, professional, economic and investment relations with Panama. Due to changes in the migratory resolution of this country, the interested party must apply before August 7, 2021, in order to be eligible for permanent residence. After this date, the applicant will be granted provisional residency for 2 years and, subsequently, he/she may apply for permanent residency. Foreigners may apply for this permit if they work in Panama or express their willingness to invest [2] in this country and maintain a good economic solvency demonstrated by means of a bank reference letter with an amount greater than US$5,000.00. After August 7, 2021, the investment must be through a real estate property for an amount not less than US$200,000.00.

Among the citizens who may apply for this immigration permit, are those who have the following nationalities: American, French, English, German, Argentinean, Australian, Canadian, Spanish, Japanese, Chilean, Brazilian, Portuguese, among others.

- Qualified Investor: All foreigners who can make a minimum investment of US$500,000.00 to US$750,000.00 are eligible for this visa. The National Immigration Service and the Ministry of Commerce and Industries, admit some of the following options of how such investments can be proven:

• To invest the amount of US$750,000.00 in the acquisition of a fixed term deposit on a personal basis in a local bank free of encumbrances and for a minimum term of 5 years extendable.
• To be owner of a real estate free of encumbrances up to the amount of US$500,000.00 in a personal capacity or in the name of a corporation proving that the foreigner is the shareholder. Until October 15, 2022, the investment is allowed to be US$300,000.00.
• Signing a contract of promise of sale of a real estate free of encumbrances up to the amount of US$500,000.00 in a personal capacity or in the name of a corporation proving that the foreigner is the shareholder. Payments for the purchase and sale of the real estate must be made through a Fiduciary licensed in Panama. If the purchase and sale is not perfected, the permanent residence permit will be cancelled.
• To invest for a lapse of 5 years the sum of US$500,000.00 through a brokerage firm with a license approved by the Superintendence of the Stock Market of Panama.

- By Own Economic Solvency: Through this modality, a temporary residency is granted for 2 years and later you can apply for permanent residency, as long as you can make a minimum investment of US$300,000.00.

The National Immigration Service admits some of the following options of how the possession of US$300,000.00 can be proved:

• Acquisition of a fixed term deposit in a local bank free of encumbrances and for a minimum period of 5 years, extendable.
• Acquisition of a real estate free of encumbrances up to the amount of US$300,000.00 in a personal capacity or in the name of a corporation proving that the foreigner is the shareholder.
• Mixed investment in the acquisition of a fixed term deposit in a local bank and for a minimum period of 5 years extendable plus a real estate property where the sum of both is US$300,000.00 free of encumbrances.

- As Investor of a Macro-Company: An initial temporary residence is granted for two years. Subsequently, foreigners who wish to invest in a macro-company with a minimum capital stock of US$160,000.00 for each applicant of the permit, who must also be shareholders and officers of this company, may apply for permanent residence. Additionally, they must hire at least 5 Panamanian citizens.

-Short Stay Visa as a Remote Worker (Teleworker): This new permit, which will be valid for up to 18 months, is intended to attract foreigners who can perform their work remotely, that is, through digital resources and tools, applications, networks and programs, from Panama. It will apply to employees of companies not established in said Central American country, whereby law the exercise of most professions and trades are reserved for nationals.

To apply, the foreigner must consider, among others, the following:

- Demonstrate income from an operating company with transnational character, located outside the country, of more than $3 thousand dollars per month an annual sum, not less than US$36,000.00.

• The telework may be partial or complete.
• The overtime shall be governed by the provisions of the Labor Code of Panama;
• It has reversible character, that is to say, the employer will be able to request to be reincorporated to its activity in the offices of the company;
• The worker may consent to work as a guard, being "on call" for any emergency or situation, outside his working hours;
• The employer and employee will agree on the expenses to be covered by the employer at the employee's domicile, however, such expenses will not be considered as part of the employee's salary;
• The law states that the employer is responsible for the protection of the occupational health and safety of the teleworker.
• The teleworker will have all the rights and obligations inherent to the worker established in the Labor Code.

- For retired/retired persons: Those who are pensioned from a foreign government or private company with a minimum monthly amount of US$1,000.00 for life may opt for an indefinite residence. If they are spouses, between the two of them they can reach the amount of US$1,000.00, if they acquire a personal property of more than US$100,000.00 the pension can be US$750.00.

The visa and immigration team of the firm Ignacio Sanín Bernal & Cía. Abogados, in alliance with our Panamanian correspondent firms specialized in immigration matters, will be in charge of taking all the necessary steps to obtain the documents and comply with the requirements for each immigration status in which you may be interested. Likewise, our management will include the coordination for the opening of a bank account in Panama, assistance for the acquisition of a real estate property in the country, the incorporation of the necessary Panamanian corporate entities (Corporations or Foundations), the permanent coordination with the Panamanian law firm in charge of the process, among others.

If your objective is to invest, live permanently or obtain tax residency in Panama, do not hesitate to consult us [3] and we will help you choose the visa that best suits your profile.

[1] Where only Panamanian source income is taxed.

[2] Which is certified with the possession of shares that prove the control of a commercial corporation in Panama.

[3] This information is merely illustrative and does not constitute advice. In order to be able to advise the client regarding the alternative that best suits him/her, as well as the effects that this may have in tax matters, it is indispensable to have sufficient information to do so and to have received such specific assignment. Our obligation is one of means and not of result.