Panama: residency, citizenship, tax and living

Panama maintains a number of residency programs suited for specific circumstances, including programs for investors, retirees, and citizens of specific countries. To get residency in the country, you would have to choose one of the programs and meet its requirements. Typically, you will be granted a provisional permit before getting a permanent residence permit, though some programs for investors offer direct permanent residency.

Panama doesn’t offer a citizenship by investment program. However, if you choose to apply for permanent residence under the Qualified Investor Visa program, you can reduce the total time required to become a citizen of Panama to five years. The program recognises real estate, securities, and fixed-term deposits as eligible investments, with minimum amounts of USD 300,000, USD 500,000, and USD 750,000, respectively.

You can get Panamanian citizenship in as few as five years. Panama stipulates five years of permanent residency as one of the naturalisation criteria, and you can become a permanent resident directly. If you choose the Friendly Nations Visa pathway to permanent residence, you will first have a two-year provisional residence permit before being granted permanent residency, for a total of seven years to citizenship.

Under Panama’s territorial tax system, citizens and residents are liable for income tax only on the income that’s generated in the country. Non-residents are also only liable for income tax on Panama-sourced income, but their tax is withheld by the payer. The same principle applies for individuals (personal income tax) and businesses (corporate income tax).