People like to discuss the Panama Friendly Nations visa. Essentially, citizens of this list of countries can qualify for residency in Panama IF they make an investment in Panama. They must either:
- Deposit $200,000 in a 3-year term deposit in a Panamanian bank
- Invest in $200,000 worth of Panamanian real estate and hold it for at least 3 years
You and your family initially get temporary residency for two years, and thereafter you can upgrade to permanent residency. Getting to permanent residency takes three trips, and once you are a permanent resident you just need to set foot in Panama every 2 years for at least a day to keep it active. It’s a great plan B.
However, I did it differently
Giovanna and Wi Men helped me create a local corporation which then hired me. I therefore obtained residency through a work permit as I have employment in Panama. Again, this only works for people coming from these countries.
The corporation will be paying me a salary. I’ll have to pay income tax on this salary as well as social security contributions. I’ll pay Wi Men and Giovanna for accounting services as well, and will pay some taxes on the income I choose to pass through this entity.
Once I am a permanent resident, I can choose to dissolve the corporation. Personally, I’ll keep it active as the taxes on corporate income are low (for income from Panama) to very low for overseas income (0% in most cases with minimal dividend taxes).
Being a resident of Panama is a great Plan A as well
Life is very comfortable in Panama. It is easy to get to, it is developed, there are many other expats around, the financial services are decent, and the nature is beautiful. I discussed the pros and cons of life in Panama in depth with my friend Calvin
Being a resident of Panama makes local banking even easier.
However, it is also possible to open a bank account remotely without being a resident of Panama. I would just not recommend it to European residents as banking between Europe and Panama is barely functional due to EU restrictions. For most other people it’s generally ok.
In this video Giovanna and Wi Men explain how to obtain the Friendly Nations Visa through incorporation and work permit. Excuse the audio quality, I ran into some issues.
There are many ways to obtain residency in Panama
It’s very easy for retired people as there is a special visa for retirees.
Also, you can get permanent residency immediately in a single trip. This visa is available to anyone, not just to people from the Friendly Nations list. More details on how to get residency in Panama here. You can also request a free brochure from Wi Men and Giovanna for whichever program you are interested in.
To a World of Opportunities,
The Wandering Investor.
Other services in Panama:
- How to obtain Residency in Panama
- Real estate Lawyer in Panama
- Open a Bank Account Remotely in Panama
Articles on Panama
- The Pros and Cons of creating a crypto and stock trading Corporation in Panama
- Affordable Tax-Free Caribbean Lifestyle and Real Estate
- Catching a falling knife in Panama City Real Estate
- The Pros and Cons of investing in the Boquete Real Estate Market in Panama
- How to Obtain the Panama Retirement Visa
- Panama Permanent Residency in ONE trip
- What is the Panama Travel Passport and how to get it?
- The Pros and Cons of living in Panama
- How to buy a gun in Panama – Gun rights in Panama
If you want to discuss your internationalization and diversification plans, book a consulting session or send me an email.
Transcript of “Panama Friendly Nations Visa through Company Formation”
LADISLAS MAURICE: Hello, everyone. Ladislas Maurice from thewanderinginvestor.com. So today, I’m in Panama City with my favorite couple here, Wi Men and Giovanna, who run a small family office here in the city. We already did a bunch of content together on opening a bank account remotely, how to obtain residency here, how to create corporate structures, etc., lots of different solutions. And today, we’ll be discussing a little known way to obtain the Friendly Nations Visa.
The Normal Way to Obtain the Friendly Nations Visa in Panama
LADISLAS MAURICE: So just as a bit of a background, the Friendly Nations Visa now is essentially you invest either $200,000 in real estate, or in a term deposit, and if you’re from the list of friendly nations, which is, typically, most European countries, North America, Australia, New Zealand, Japan, South Korea, South Africa, etc., there’s a few countries, then you qualify for the Friendly Nations Visa. So for the first two years, you have temporary residency. And if you maintain the investment, then after two years, it turns into permanent residency. So there’s flexibility, you can actually mix term deposit and real estate, which is really interesting, because in places like Costa Rica, you can’t, you have to choose one or the other. Here, if you want to buy a house for $130,000 and put 70K in the bank, this works. So you can really optimize your investments.
Obtaining the Panama Friendly Nations Visa through Company Formation
LADISLAS MAURICE: But there’s also a way for people to attain it without having to invest $200,000. So this is very interesting, especially for entrepreneurs out there. We’re going to be going into detail. So, let’s say, I don’t have $200,000, or I do have $200,000 and I don’t want to invest $200,000 in such investments, how can I, as an entrepreneur, get the Friendly Nations Visa here in Panama?
GIOVANNA: So if you are an entrepreneur and you have what we call an online business, it will be a great way to take the advantages of the taxes, and also being able to hire yourself through the corporation so you can get residency. It’s the same principle as you hire yourself, you pay Social Security. So we register as an employee, we register work contracts, we do everything following Panama laws.
When you get the temporary residency, you will have to wait, it’s around three to six months. So if they approve the residency, you come to Panama, you get the two years. So for these two years, we’ll pay Social Security, we will pay everything that’s following Panama laws. So once you get permanent residency, then you will get your cellular and you’ll get like your panama ID, and then you get like a Panama local tax ID.
Minimum Physical Presence Requirements for the Panama Friendly Nations Visa
LADISLAS MAURICE: So essentially, there are no minimum physical presence requirements, I can come here, set up my structure, run my business from Panama, but physically, myself, because, let’s say, I’m traveling a lot, I’m doing business internationally, I don’t actually need to stay in Panama, except for paperwork renewal, or, once I’m a permanent resident, every two years to keep the residency active. Am I correct?
WI MEN: That’s correct, that’s correct.
LADISLAS MAURICE: So I think this says a lot about Panama. The reason Panama changed the Friendly Nations Visa from just depositing $5,000 to making an investment of at least $200,000 in the country is because too many people were coming here without adding value to the country. So by putting 200K, the country sees that you’re adding value, but there’s also this option that very few people discuss, where you actually run a business here. So preferably, it’s a business where you recruit locally, but not necessarily. You can just, for example, myself, I could potentially create a business here, run an online business, receive money into my Panama structure and Panama bank account, and pay taxes on Panama-sourced income, but not on worldwide income, so from income outside of Panama.
So it’s a very interesting option for entrepreneurs who want to benefit from Panama’s really great tax structure, territorial tax system, but who also want to have the opportunity to live here, to then, potentially themselves, if they spend a majority of the year here, become tax residents on a personal basis as well. So you have a lot of foreign clients here at your family office. So from which countries, typically, are people who are using this path into Panama?
WI MEN: Normally, people from Canada, Australia, UK, Ireland, most popular countries prefer our country.
LADISLAS MAURICE: Yeah. Okay, cool. Fantastic. So if you’re interested in this unique path to Panama permanent residency, if you’re an entrepreneur, then really get in touch with Wi Men and Giovanna. They’ve been helping a lot of people with this process. It’s quite unique. It’s very helpful. It can make a big change in one’s personal lifestyle and tax situation to have a base here in Panama. So there is a contact form as well as their email. Just get in touch with them and they can send you an information package on how it works and how they can help you. Great, fantastic. So Giovanna and Wi Men, thank you very much.
WI MEN: You are welcome.