Purchase of real estate in Panama secures residence in the country
If you buy a luxury house or an elite apartment in Panama, you will not only have a comfortable place to stay in this beautiful country but also acquire solid grounds to apply for residency there. Panama can be your “paradise on earth” where you can enjoy the exotic tropical nature and do business freely without worrying for the security of your assets.
Why you should consider purchasing real estate in Panama
Let us start by saying that far from every country on the planet offers permanent residence permits to those who buy property there.
With such European countries as Malta, Cyprus, or Portugal, for example, that do offer residence and citizenship to foreigners, buying a piece of real estate is not enough. You will also have to make an irretrievable deposit to the bank account of a state agency there.
Besides, the possibility to sell property is restricted in some countries. If you sell the residence accommodation you bought when moving there, you will therefore cease to qualify for residency in the country.
In addition to that, many European countries have yearly quotas for the number of foreigners moving in. Thus, in case the upper limit has been already achieved, you will have to wait until next year before you can apply for residency in these countries.
Panama is drastically different in this respect. Purchasing some real estate there will not only help you diversify your assets but also guarantee acquiring a residence permit in the country with the possibility to later apply for full citizenship there.
Panama’s main advantages
The Republic of Panama has been demonstrating stable economic growth of 5 to 6% of the GDP over several years in a row now. The Government invests heavily in infrastructure development, as well as energy and construction.
- Unlike its European counterparts that usually have one or two immigration schemes, Panama offers a wide choice of migration programs to foreigners.
- Buying real estate in Panama is one of the most attractive options to be found in the western hemisphere. Accommodations in this country are equal to those located in the developed countries both in quality and in luxury, while their prices are considerably lower than the prices of real property in Europe or the United States.
In January 2019, a new Law on Taxation of Real Property was put into effect in Panama. This Law has increased the maximum cost of untaxable property from US$ 30,000 to US$ 120,000. This means that there is no property tax on relatively inexpensive real estate in the country. At the same time, an apartment in Panama that you can buy for US$ 100,000 or so is going to be much more luxurious than an apartment worth the same in Europe or the US.
- The US dollar is in free circulation in Panama. The local currency called ‘balboa’ is exchanged to dollar at the rate 1:1. Mainly small coins in balboa are used as replacements of American cents.
The fact that the American dollar is de facto the national currency in Panama means that the capital you keep in the country will be in a secure currency resistant to inflation.
- The Panamanian legislation equally protects the rights of the citizens of the country and the foreign residents. No state in the world can confiscate property in Panama through judicial procedures, as judges in Panama do not follow court decisions made in other countries. The laws of the country effectively protect private property and the right for personal privacy.
- The business regulations in Panama comply with all the international market norms providing for fair competition with everybody being on the same footing. The foreign investor will face no limitations when bringing capital into the country or disinvesting it: the “free capital” principle is strictly followed there indeed. The Law protects corporate secrets and their unsanctioned disclosure will lead not only to heavy fines but also to imprisonment.
The Government of Panama welcomes foreign investments and offers preferential taxation conditions available in Free Trade Zones found in the country.
- The strong banking sector in Panama gives foreign investors significant economic opportunities as well as access to the world finances.
Panamanian banks are famous for their reliability and security. The requirements to clients wishing to open an account in a bank are much stricter in Panama than in many European or US banks.
- Panama has warm subequatorial climate with the average yearly temperature of 27-28 degrees centigrade (80-82 degrees Fahrenheit). What makes this country especially attractive in terms of the climate is almost total lack of natural disasters such as tsunamis, hurricanes, or tornados. Panama is certainly luckier in this respect than some other tropical countries.
There is a wide choice of sandy beaches in Panama both on the Caribbean and on the Pacific coasts. A large number of small pretty islands can also be found near these coasts. In addition, Panama City already has wonderful infrastructure, and the rest of the country is rapidly catching up on that too. Finally, the Panama of today is a very safe country to live in. All these factors make more and more people come here every year. A considerable portion of tourists to Panama wants to come again for another holiday and some for life.
Advantages of tax residency in Panama
It is true that doing business in the so-called ‘first world countries’ is safe. But it is also true that the taxes in these countries are notoriously high. For this reason, relocating your business activities to Panama is an enticing opportunity indeed. Here are the main advantage of acquiring tax residency in Panama:
First, the ‘territorial taxation’ system is in use in Panama. This means that the profit that a private individual or a legal entity makes abroad is not taxable in Panama. Only the profit derived from business transactions made in the inner market is taxed.
Second, unlike in many European countries, there are no CFC (Controlled Foreign Corporation) laws in Panama. Such laws are used in Europe to regulate activities of foreign offshore companies.
Third, even though Panama is with the CRS (Common Reporting Standards) group, it has not made bilateral agreements on automatic exchange of taxpayer information with every single country in the world.
Thus, a businessperson making money internationally should find it lucrative to register a company in Panama, as it will pay no taxes in this country.
The most popular ‘immigration for investment’ programs in Panama
Panama offers a wide array of opportunities to come and stay in the country to those who are willing to invest into its economy. We will not innumerate all of them here but instead focus on those that look most inviting to middle-class residents of developed countries. Let us make three preliminary notes though.
First, the knowledge of the Spanish language – the official language in Panama – is not required to immigrate to this country, which certainly makes access to Panama easier to non-Spanish speakers.
Second, currently there are no restrictions as to the number of foreign people who may apply for residency in Panama. At the same time, the popularity of Panama among those wishing the change their domicile is growing rapidly and it should be expected that some limitations will be imposed in the near future. Thus, if you want to move to Panama, you had better move there fast.
Third, the cost of relocating to Panama is notably lower than that of moving to most other countries. Besides, there are no irretrievable deposits you would have to make when immigrating to Panama.
“Economic investor” visa
There are three alternative investment routes to follow if you decide to use this immigration program.
- Route 1 is purchasing real estate in Panama in the name of the primary program applicant (not in the name of a legal entity). The house or the apartment you buy must be worth not less than US$ 300,000. This is the main condition.
- Route 2 is putting the same amount – US$ 300,000 – into a fixed-term deposit in a Panamanian bank.
- Route 3 is combining these two types of investment. You can buy a less expensive piece of property and make a deposit in the bank. The essential condition is that your total investment must amount to at least US$ 300,000.
As far as the bank account is concerned, it has to be opened in a state bank of Panama (there are two such banks in the country). In order to retain the permanent resident status that such investment will entail you have to keep the money in the bank for minimum three years.
“Friendly Nations” visa
This immigration program is designed for citizens of fifty world countries that have established especially close relationships with Panama with respect to economic cooperation and cultural ties.
The Friendly Nations visa allows acquiring a permanent residence permit in Panama after only three to four months since the date of application.
Besides, there are very mild requirements to the investment amounts that holders of such visas have to make.
“Business Investor” visa
This visa program is designed for foreign business people who want to contribute to the growth of Panamanian economy while simultaneously making money for themselves. A foreigner can invest minimum US$ 160,000 in the country by whether establishing a new business company in Panama or buying an existing firm for the sum not smaller than the one indicated above. If you opt for this program, you will have to collect and submit quite a large number of legal documents proving your ownership and/ or directorship of the company. However, the required investment does not sound huge at all, and besides, we will gladly help you with the paperwork.
All the immigration programs described above will give the foreign investor the possibility to apply for full Panamanian citizenship after five years of holding any of the aforementioned visas. Application for citizenship will not entail any additional costs.
Purchase of real estate in Panama for immigration purposes
If you would like to make use of the Economic Investor immigration program mentioned above, we can assist you in choosing a nice piece of real property in Panama. Here we invite you to consider buying a villa in a resort area on the Pacific Ocean coast. The Buenaventura Golf & Beach Resort is famous throughout the world. It is located 130 kilometers (a bit more than 80 miles) away from Panama City. Driving from the capital to the resort takes only an hour and a half.
We would like to draw your attention to the fact that this offer is not copied from advertising booklets. Our company has a back office in Panama and we use the real property database that contains information about existing offers available on the market. Our Panamanian lawyers will also help you collect all the necessary documents and ensure that the deal you make is secure.
Buenaventura Golf & Beach Resort is a closed community providing round o’clock services to its residents. It is composed of eight living quarters each of which has its own name and architectural style. All the houses and villas in Buenaventura are located next to the sandy beach of Buenaventura bay.
There are open swimming pools on the territory of the resort as well as restaurants, fitness and SPA facilities, and a business center. One of the main tourist attractions that Buenaventura has is an international standard 18-hole golf course. World golf tournaments are regularly held on this course.
A villa in “Club Estates” quarters
Club Estates is the name of a living quarter in Buenaventura Golf & Beach Resort. It consists of 17 separate villas built in the “Golf Estate” and “Club Villa” styles. The Resort administration has put a two-story villa on sale in this area that is located close to the golf course.
- The total area of the villa is 2,063 square meters (2,468 sq. yards).
- The area of the house is 481 square meters (575 sq. yards). There are:
- Four bedrooms.
- Four and a half bathrooms.
- A study.
- A living room.
- A dining room.
- A spacious kitchen.
- A heated pool.
- A bathtub in the open air.
- A children’s playground.
- Two covered parking lots plus uncovered parking space.
- A generator providing electricity for the house.
The interior decorations are superb; the villa has parquet flooring and well-appointed terraces. All rooms are air-conditioned and the kitchen is equipped with all necessary machines.
If you like the description of the villa, we can show it to you when you come to Panama. It can become a second home for you and your family. We recommend that prior to travelling to Panama you apply for a free consultation with us on obtaining residence in this wonderful Latin American country.
Offshore Pro Group will assist you in making the purchase agreement and applying for residency in Panama. Please send your queries related to the cost of the property or residence acquisition, or any other questions about Panama to our e-mail address: firstname.lastname@example.org. We will be happy to serve you.