If you believe that you are paying a bit too much in taxes, you should consider changing your tax residency. There are countries on this planet that do not overcharge their taxpayers and Panama in Central America is one of such countries. Your life can change for the better if you relocate to Panama.
What can Panama tax residency bring?
You may think that relocating to Panama will entail forsaking some of the comfort and amenities that you are used to. But it will not, as a matter of fact. It is true that Panama still qualifies as a developing country but it differs dramatically from other third-world countries. Its economy is growing at the rates much faster than those of the leading large national states.
Around fifty years ago, Panama was a poor country indeed torn with political conflicts and drug trafficking issues. However, serious political and economic reforms have overturned the situation and today Panama is the best-developed country in the whole of Latin America both in terms of economy and of social security. Moving to Panama will allow effectively protecting your assets and lessening your tax burden. At the same time, you will be able to enjoy all the conveniences of modern life that are found in Europe or North America.
The benefits of residing in Panama
We would like to offer you a dozen good reasons to relocate to Panama. The list of arguments in favor of such move that we provide below is far from exhaustive. However, these are the major aspects that make more and more foreign nationals want to leave their home countries and live in Panama instead.
- The first reason why Panama is attractive in terms of tax optimization is its territorial taxation principle. The application of this principle entails tax exemptions on all incomes that Panama citizens and legal residents obtain abroad. Only the income obtained within Panama national borders is taxed in this country. If you live in Panama and do some international business, you will not have to pay a penny in taxes on the incomes that you make in foreign jurisdictions.
- The second reason to move to Panama is its strict laws based on the British legal framework. The property owned by foreign nationals in Panama enjoys the same level of protection as the property of native Panamanians.
Besides, Panama is among the leading countries of the world as far as confidentiality of personal information is concerned. Panama laws prohibit unauthorized disclosure of corporate information. This information can be disclosed only on a court decision in case the judge deems the reasons for disclosure weighty and legitimate. Violations of confidentiality laws will entail fines and imprisonment.
- At the current moment, Panama has a good international reputation. It is not considered an offshore zone any longer, no sanctions are applied to it, and it is not included in any black or grey lists of ‘deviant’ countries.
- It is very easy for a foreigner to open a business in Panama.
It takes one week maximum to establish a business company in Panama. In addition, you can have the company registered remotely, via the Internet. You have to submit all the required documents to the registrar, though.
- The US dollar is an official currency in Panama, which is very convenient for international transactions. The country does have a national currency called Balboa, but Panamanian constitution disallows the Government to issue paper money so only balboa coins are in use. The exchange rate of balboa to dollar is 1 to 1 and it has been fixed since 1934.
- The principle of ‘freedom of capital’ is applied in Panama and there are no financial limitations whatsoever. Panama residents receive access to the world finances via Panamanian banks. The country is considered the banking center of Central America.
- Panama has a stable political environment, a growing economy, and an advanced infrastructure.
- There are no CFC (controlled foreign corporation) laws in Panama.
- The country has a warm subequatorial climate.
Even though Panama is only a small country, it has three distinct climatic zones: the temperate humid zone in the lowlands on the Atlantic and the Pacific shores; the cooler spring-like climate in the mountain areas; and the tropical rainforest climate in the northwestern part of the country.
The exotic beaches are most often found on Panama’s postcards. It has to be noted that the Atlantic beaches of Panama are dissimilar to its Pacific beaches. You can find both calm waters good for swimming or diving and high waves needed for surfing sports. Apart from that, there is over a thousand islands around Panama. Some of them are large and they carry five-star hotels, while others are small and uninhabited. The beauty of these islands can leave nobody untouched. The same goes for the natural wonders of mainland Panama.
- Panama cost of living is much lower than that in the western countries. At the same time, the living standards are as high as those in Europe or North America. You can feel it especially well in the capital of the country, Panama City. Some foreigners say that they actually find more infrastructure and amenities in this city than they do in large cities of their home countries. No wonder nearly two thirds of the entire Panama population live in Panama City.
- Panama offers a large choice of different visa programs, which is untypical of other countries that invite foreign immigrants. Besides, it is much less expensive to immigrate to Panama in comparison to the cost of immigration to most other countries.
- Some of these visa programs allow obtaining full citizenship of Panama after five years of permanent residence in the country.
What do you have to do in order to acquire tax residency in Panama?
To become a legal and a tax resident in Panama you have to demonstrate your economic interests in the country. For example, if you purchase real estate in Panama, it will serve as legal grounds for applying for a permanent residence permit.
If you buy residential accommodations, you can live or stay there with your family when you come to Panama. You can also use it as an investment instrument and let your property on a lease thus gaining a steady income.
If you are seriously considering making Panama the country of your (second) residence, we invite you to make use of our free consultation. Answering a few questions will let you learn a few important details and your answers will let us understand your desires.
In addition, you can go on a familiarization tour to Panama with us. It is certainly a good idea to see the country and the property for sale there with your own eyes before making the final decision. You will love Panama! We promise!
Please write to us to firstname.lastname@example.org and request the familiarization your or ask us anything about relocating to Panama. Here we would like to draw your attention to four most luring immigration programs that the Government of Panama uses to attract foreign investors to the country.
“Friendly Nations” visa program
This immigration program provides for a fast-track procedure of acquiring permanent residence in Panama. It also does not involve much investment. However, there are certain requirements that you have to meet anyway.
First, you have to show to the Panama immigration authorities a bank statement certifying that you have US$ 5,000 or more in a Panamanian bank account. Then you have to do one of the following three things:
- Find an employment in Panama.
- Establish a business company in the country (any small business is acceptable).
- Purchase real estate at the price of not less than US$ 100,000.
Any of these three alternative actions will make you qualified for legal residence in Panama. When you are sure that you meet all the requirements of the Friendly Nation visa program, you can submit a request for residency and obtain your permanent residence permit (a Panamanian ID card) after three to four months. After five years of permanent residence in Panama, you are entitled to apply for full citizenship of the country.
Acquiring a Friendly Nations visa is the easiest way to penetrate into Panama. This being said however, not everyone can use this immigration program. It is suitable only for the citizens of fifty national states that are friendly to Panama, as the name of the program suggests. You can find the list of these states and read more about this visa program if you click here.
“Pensionado” visa program
Obtaining a Pensionado visa is also a very inexpensive way to acquire permanent residence in Panama. All you have to show to the Panama immigration authorities is that you have a guaranteed lifetime monthly annuity of at least US$ 1,000. In case you buy real estate in Panama that costs minimum US$ 100,000, your guaranteed inalienable income shall be US$ 750 a month.
The name of the program may suggest that it is meant for pensioners only. The fact is, however, that anyone older than 18 can apply for a Pensionado visa provided that he or she can prove having a stable income of the required amount. Citizens of all countries are eligible to apply for this visa program. On the other hand, those who come from the countries with soft currencies are going to find it very hard to obtain a Pensionado visa. You can read more about this Panama immigration program if you click here.
“Economic Investor” visa program
With this immigration program, it does not matter at all what your home country is. Anyone who makes an investment into Panamanian economy in the amount of US$ 300,000 is eligible for a permanent residence permit. You can make the required investment by simply putting money in the bank, by purchasing some real property in Panama that costs not less than the specified sum, or by doing both of these things at a time. That is to say, you can spend a portion of the three hundred thousand on buying the property and deposit the remaining part into an authorized bank in Panama.
What is good about this immigration program is that you are not required to pay for residency in Panama in any way. You have to keep the money on your account for three years and after that time, you can do whatever you want with it. Nobody is going to take the residence permit away from you in case you close your account after three years.
The same goes for the property that you buy. You may sell it back after several years of ownership and when you do, it is most likely to cost more than it did when you bought it. In this aspect Panama beats some other countries that collect unrecoverable ‘immigration fees’, such a Cyprus, for example. You can find out more about the Economic Investor visa program by clicking here.
“Business Investor” visa program
This immigration program will suit those who are keen on entrepreneurship. A citizen of any country of the world is welcome to invest minimum US$ 160,000 into business in Panama thus qualifying for permanent residency there. You can open a new company, which is quite easy to do in Panama, or buy an existing business at the price not less than the one specified above. Another necessary condition is that your company shall employ five native Panamanians. Doing business in Panama is very comfortable and besides, there are Free Trade Zones that provide for huge tax incentives. Thus, this immigration program will be an attractive option for some indeed. You can read more about it if you click here.
What makes Panama an even more enticing country to obtain a second residency in is its relaxed immigration regulations. You do not actually have to permanently live in Panama in order to preserve your permanent residence permit in the country. There are no set terms of stay in the Panamanian immigration legislation. Practice shows that it is enough to come to Panama once every two years and stay there for a week or two and you can keep your permanent residence permit.
As most of Panama immigration-for-investment programs involve purchasing some real property in the country, we would like to suggest that you consider buying an exclusive piece of real estate in one of the most popular districts of Panama City.
Punta Pacifica district, Panama City
Punta Pacifica is a new fashionable district of Panama capital with a large number of modern skyscrapers containing comfortable apartments. There are also many banks and business centers in this city district.
The modern trends of exterior design are reflected in the buildings in Punta Pacifica. World-famous artists demonstrate their exclusive individual architectural styles in commercial and residential constructions there.
In Punta Pacifica, you cannot swing a cat without hitting a store, a cozy café, a nightclub, or a restaurant serving dishes of this or that national cuisine. The ‘South Corridor’ (Corredor Sur) highway that runs through the district will bring you to Tocumen international airport in about twenty minutes. Contemporary fly-over junctions and smooth speedways will take you to the city center in no time at all.
An apartment in Punta Pacifica with the view of the Pacific Ocean
We invite you to consider buying an apartment in a building that is under security surveillance 24/7. Concierge service is also available there.
- The total are of the apartment is 335 square meters (3,606 sq. ft). There are:
- A living room.
- Three bedrooms.
- Three and a half bathrooms with marble interiors.
- A housemaid’s room with a separate bathroom.
- A kitchen with modern gadgets.
- A cloakroom.
- Two wide balconies.
- The apartment has marble floors.
- The windows open onto the Pacific Ocean.
- Parking lots are reserved in the underground car park.
The price of this apartment is US$ 899,000.
We will provide residency acquisition services and help you choose real estate to buy in Panama via our managers residing in Panama City. They are fluent in both Spanish and English. We are also in close cooperation with a licensed Panamanian lawyer who specializes in property laws and immigration laws. He will ascertain that the purchase deals that you make in Panama are legal and secure.
If you would like to change your current tax residency and move to Panama (or simply acquire a tax residency there), we will be happy to assist you in this endeavor. Please send us a message to email@example.com, and we will get back to you ASAP to discuss the plan of actions. Our experience in helping people find a new home in Panama will let you make the relocation process as smooth and effortless as it can only be.