Question 1

What entry rights and short-stay conditions apply to foreign nationals in Panama?

Accepted Answer

Panama applies a tiered tourist-entry policy. Citizens of the United States and Canada receive up to 180 days on arrival under the reciprocity exception of Resolution 22706 of 10 September 2021, which remains in force. Citizens of the European Union, the United Kingdom, Australia, Japan, South Korea, Singapore and most other visa-exempt nationalities receive up to 90 days, the general ceiling reinstated from 1 October 2021 under Resolution 22068 of 1 September 2021 and set out in article 16 of Decreto Ejecutivo 320 de 8 de agosto de 2008. All visa-exempt visitors must hold a passport with at least three months remaining validity, demonstrate economic solvency of at least USD 500 in cash, traveler cheques, a recent bank statement or credit card statements, and present proof of onward or return travel. A six-month passport validity buffer is prudent for airline boarding but is not the core Panamanian migration requirement.

Tourists admitted for less than 90 days may request an extension from the Servicio Nacional de Migracion before their initial period lapses, but only up to a 90-day total maximum, under article 21 of Decreto Ejecutivo 320 de 8 de agosto de 2008. Border runs are no longer a legal or automatic means of extending tourist status. Nationals of Cuba, the Dominican Republic, Venezuela and other restricted countries listed by the Servicio Nacional de Migracion must obtain a stamped or authorized tourist visa at a Panamanian consulate before travel, with stays generally capped at 30 days. Under Executive Decree 521 of 6 August 2018, as amended by Executive Decree 196 of 28 October 2024, nationals from visa-required countries may enter Panama without a Panamanian tourist visa if they hold a valid visa, or a qualifying valid residence permit, issued by Canada, the United States, Australia, South Korea, Japan, the United Kingdom, Singapore or any European Union state. Decree 196 removed the prior conditions that the foreign visa be multiple-entry, have been used previously in the issuing country and retain at least six months validity. Entry under this waiver is granted for a maximum of 30 days, and Panamanian immigration officers accept a valid United States permanent resident card for this purpose.

Tourist status does not authorize local employment in Panama. Working formally for a Panamanian client or employer requires an appropriate migration category and, where applicable, a work permit, available through the Friendly Nations Visa, the Foreign Professional Visa or one of the foreign personnel categories. Foreign nationals working remotely for foreign clients may instead use the Short Stay Visa for Remote Workers under Decreto Ejecutivo 198 de 7 de mayo de 2021, which requires at least USD 36,000 in annual foreign-source income, is granted for nine months and may be extended once for the same period, but carries no pathway to permanent residency.

Question 2

What long-term residence options exist in Panama for internationally mobile individuals?

Accepted Answer

Panama offers one of the most diverse residency menus in Latin America, structured around investment, pension income, professional pathways and a special bilateral arrangement with Italy. The Qualified Investor Visa (QIV), established by Decreto Ejecutivo 722 de 15 de octubre de 2020 and amended by Decreto Ejecutivo 193 de 15 de octubre de 2024, grants direct permanent residence with no provisional phase, through one of three exclusive routes: USD 300,000 in Panamanian real estate, USD 500,000 in listed securities through a licensed Panamanian brokerage, or a USD 750,000 fixed-term bank deposit held for at least 5 years. The legal processing target is 30 business days once the file is complete, with 45 to 60 days more typical in practice. Funds must originate from abroad and the investment must be maintained for 5 years, with the family scope covering spouse, dependent children up to 25 if students, and dependent parents. The current real estate threshold is USD 300,000 under Decreto 193, whose operative text fixes that amount and does not set a fixed October 2026 sunset or an automatic reversion to USD 500,000, even though some market sources still describe the reduced threshold as time-limited. Investor visa approvals reached 327 in 2024, up from 187 in 2023, a 75 percent increase.

The Pensionado Visa, in force under Ley 9 de 24 de junio de 1987, requires a verified lifetime pension of at least USD 1,000 per month, reduced to USD 750 where the applicant owns Panamanian real estate worth more than USD 100,000, plus USD 250 per dependent. It grants permanent residence from approval and access to one of the broadest statutory retiree discount frameworks available internationally. The Friendly Nations Visa, restructured by Decretos Ejecutivos 197 and 226 de 2021 and effective from 7 August 2021, opens a 2-year provisional residence convertible to permanent residence for citizens of roughly 50 designated countries, through real estate of at least USD 200,000, a 3-year fixed-term deposit of at least USD 200,000, or genuine employment with a Panamanian employer. The 2021 reform removed the prior low-capital route based on incorporating a company and depositing USD 5,000. Italian nationals access a direct permanent residence upon approval under Ley 15 de 1 de febrero de 1966, the Italy-Panama Treaty of Friendship, Commerce and Navigation, with no provisional phase and processing of around five to six months. They must demonstrate an economic or professional purpose in Panama and adequate solvency, evidenced in practice by a bank balance of around USD 5,000 rather than a fixed statutory threshold.

Other tracks include the Self Economic Solvency Visa, based on USD 300,000 in real estate, a 3-year fixed-term deposit or a combination, structured as a 2-year provisional residence before permanent residence. The Reforestation Investor route operates three tiers: USD 80,000 for renewable temporary residence, USD 100,000 for a 2-year temporary residence convertible to permanent residence, and USD 350,000 for direct permanent residence, with the investment maintained for at least 5 years. The Foreign Professional Visa under Decreto Ejecutivo 804 de 9 de octubre de 2012 is open to university graduates whose profession is not reserved to Panamanian nationals and whose foreign diploma is homologated where required. Employment-based permits also exist, including the ordinary foreign personnel permit, which sits within the 10 percent foreign worker quota set by article 17 of the Labour Code rather than any constitutional rule and grants a 2-year provisional residence before permanent residence. Panama also created a Researcher, Scientist and Exceptional Talent residence permit under Decreto Ejecutivo No. 6 of 20 March 2026, processed through a dedicated desk at the Secretaria Nacional de Ciencia, Tecnologia e Innovacion (SENACYT) for foreign professionals with internationally recognised scientific, technological or innovation achievements affiliated with a Panamanian institution, granting an initial 2-year permit convertible to permanent residence.

The Short Stay Visa for Remote Workers, created by Decreto Ejecutivo 198 de 7 de mayo de 2021, sits outside the residency regime. It falls under the Non-Resident category and grants 9 months of legal stay, extendable once for a further 9 months, to remote workers earning at least USD 36,000 annually from foreign sources. It carries no family inclusion and no pathway to permanent residence or citizenship. Panamanian naturalisation is generally available after 5 consecutive years of residence under Article 10 of the Constitution, subject to a declaration of intent, express renunciation of the prior nationality, Spanish-language ability and basic knowledge of Panamanian geography, history and political organisation. Shorter routes apply in specific cases, including 3 years for applicants with a Panamanian spouse or child, or reciprocity-based categories for nationals of Spain and Latin American states.

Question 3

How does taxation apply to residents and foreign-source income in Panama?

Accepted Answer

Panama operates a territorial tax system codified in Article 694 of the Codigo Fiscal: only Panamanian-source income is taxable, while foreign-source income falls outside the tax base. For individuals in their personal capacity this exemption is unconditional, with no remittance trigger and no subject-to-tax test, which is the core of Panama's appeal for internationally mobile taxpayers. Tax residency is established under Article 762-N of the Codigo Fiscal by physical presence exceeding 183 days, continuous or alternating, in the relevant tax year or the year immediately preceding, or by establishing a center of vital interests in Panama. Personal income tax for residents follows a progressive scale applied exclusively to Panamanian-source income: 0 percent up to USD 11,000, 15 percent on the band between USD 11,000 and USD 50,000, and 25 percent above USD 50,000. Panama offers no opt-in special tax regime for individuals comparable to the Portuguese Non-Habitual Resident (NHR) regime, the Italian flat tax for high earners or the Cyprus non-domiciled status, because the territorial principle alone delivers the foreign-income exemption without any conditional structuring.

Resident companies pay 25 percent corporate income tax on Panamanian-source net profit, or alternatively the Calculo Alternativo del Impuesto sobre la Renta (CAIR) at 4.67 percent of gross taxable income for entities with annual gross taxable income above USD 1,500,000, whichever yields the higher amount. Several special regimes apply concessional rates. The Multinational Headquarters Regime (SEM) under Ley 41 de 2007 modificada por Ley 57 de 2018 taxes intragroup services at 5 percent. The Multinational Manufacturing Services regime (EMMA) under Ley 159 de 2020 grants a 5-year income tax holiday followed by 5 percent. The Panama Pacifico Special Economic Area under Ley 41 de 2004 modificada por Ley 66 de 2018 applies 0 percent or 5 percent depending on the activity. The Colon Free Zone, established by Ley 18 de 1948 and modernized by Ley 412 de 2023, exempts foreign-facing operations from income tax. The Ciudad del Saber regime under Decreto Ley 6 de 1998, whose fiscal benefits have been extended by Cabinet addendum until 31 December 2027, subject to the pending National Assembly ratification process, grants income tax exemption on qualifying science, technology and innovation activities.

Capital gains are taxed outside the ordinary scale. On the transfer of Panamanian real estate, a 2 percent transfer tax plus a 3 percent advance income tax apply on the higher of price or cadastral value, and the 3 percent may be treated as definitive or, at the seller's election, replaced by 10 percent on the actual gain with the advance credited. On the transfer of securities, the gain is taxed at 10 percent, with the buyer withholding 5 percent of the price as an advance that the seller may treat as final or reconcile against the 10 percent. Panama imposes no net wealth tax, no inheritance or estate tax, no gift tax beyond standard rules, and no exit tax. The Impuesto de Transferencia de Bienes Muebles y Servicios (ITBMS), the Panamanian value-added tax (VAT), is 7 percent generally, 10 percent on alcohol and hotel accommodation and 15 percent on tobacco. Cross-border payments to non-residents are taxed selectively rather than under a single flat rate: royalties, service fees and commissions remitted abroad are taxed by applying the 25 percent rate to 50 percent of the remittance, an effective 12.5 percent, and interest paid to a lender abroad is taxed on the same basis, while dividends to foreign shareholders carry 5 percent, 10 percent or 20 percent depending on the income source and whether the shares are bearer shares. The treaty network covers 17 active double-tax agreements (France, Spain, the United Kingdom, the Netherlands, Luxembourg, Portugal, Mexico, Korea, Singapore, Israel, Italy, Qatar, the United Arab Emirates, Vietnam, the Czech Republic, Ireland and Barbados), with no agreement with the United States, Germany or Switzerland.

The decisive 2026 development is Ley 526 de 28 de mayo de 2026, published in Gaceta Oficial No. 30534-B after approval in third debate by 70 of 71 deputies, which introduces economic substance requirements for entities of multinational groups that are constituted or domiciled in Panama and earn passive foreign-source income, namely dividends, interest, royalties, capital gains, real estate capital income and other movable capital income. The law does not create a general tax on foreign passive income. Its logic is the reverse: entities that demonstrate adequate substance in Panama, meaning qualified local personnel, premises, strategic decision-making and operating expenses proportionate to the income, retain the territorial exemption, while non-qualified entities that fail the test lose it and are taxed at 15 percent on the net taxable passive foreign income for the period, with no further tax. The regulated financial sector and the merchant marine are excluded, and an anti-abuse clause allows the Ministerio de Economia y Finanzas to disregard artificial structures. The regime applies from fiscal year 2027, with up to 90 days for the executive to issue regulations, and is timed to the October 2026 European Union review of its list of non-cooperative jurisdictions. The reform leaves the personal territorial exemption for individuals intact under Article 694. Separately, exposure to the Organisation for Economic Co-operation and Development (OECD) Pillar Two top-up tax for groups above EUR 750 million remains unaddressed by any domestic Qualified Domestic Minimum Top-up Tax, which Ley 526 is not.

Question 4

Can foreign residents open bank accounts and deploy capital in Panama without friction?

Accepted Answer

The Panamanian banking system is supervised by the Superintendencia de Bancos de Panama and operates in a fully dollarized economy where the United States dollar circulates as legal tender alongside the Panamanian balboa, which is pegged 1 to 1 to the dollar. General-license banks include Banco General, Banistmo, BAC International Bank, Banco Nacional de Panama, Global Bank and Multibank, alongside foreign banking groups operating through Panamanian subsidiaries or branches. Foreign residents can open accounts, but the process is compliance-heavy rather than frictionless. Banks typically require passport identification, residency or immigration documentation where applicable, proof of address, evidence of professional or business activity, tax identification, bank references and detailed source-of-funds and source-of-wealth documentation, reviewed rigorously under the customer due diligence obligations of Law 23 of 2015, Panama's core anti-money laundering and counter-terrorist financing statute. Timelines vary materially by bank, client profile, residency status and documentation quality, ranging from a few weeks to several months, and non-resident applications face heavier due diligence and a higher refusal risk.

Panama participates in the main international financial transparency frameworks. It has been a Common Reporting Standard (CRS) jurisdiction for the automatic exchange of financial account information since 2018, and it signed its Foreign Account Tax Compliance Act (FATCA) intergovernmental agreement with the United States on 27 April 2016. The country has materially strengthened its anti-money laundering and counter-terrorist financing framework, notably through Law 129 of 2020, which created the private and single registry of beneficial owners administered by the Superintendencia de Sujetos no Financieros. Panama exited the Financial Action Task Force (FATF) grey list on 27 October 2023 after completing its action plan, and was later removed from the European Union list of high-risk third countries through Commission Delegated Regulation (EU) 2025/1184, effective on 5 August 2025. These delistings reduce reputational and due-diligence friction, although banks remain conservative and OECD, European Union and United States scrutiny remains relevant.

Capital movement is open in principle. Panama maintains no foreign exchange controls and imposes no general restriction on capital flows into or out of the country, although large transactions remain subject to ordinary anti-money laundering, sanctions, tax transparency and source-of-funds review. Foreign nationals can purchase real estate freely, subject to the constitutional restriction under Article 291 that bars foreign persons and foreign-owned entities from acquiring land within 10 kilometers of the borders with Costa Rica or Colombia.

Investment in Panamanian listed securities is available through brokerage firms licensed by the Superintendencia del Mercado de Valores and supports the Qualified Investor Visa securities route, which requires a USD 500,000 investment in the local securities market. The crypto environment remains legally unsettled, as Panama has no comprehensive digital-asset framework in force. The main crypto bill, Proyecto de Ley 697 de 2021, was partially objected by the executive under President Cortizo and ultimately declared unconstitutional by the Corte Suprema de Justicia in 2023. Crypto activity is not generally prohibited but operates in a legal grey area, banking access and institutional custody options remain limited, and tax treatment follows Panama's territorial rules, with attention for entities of multinational groups to the economic-substance requirements on certain foreign-source passive income introduced by Ley 526 de 2026 and applicable from fiscal year 2027.

Question 5

Is Panama a viable operational base for foreign professionals?

Accepted Answer

Panama City offers a solid digital infrastructure, supported by the country role as a regional subsea cable and data connectivity hub and by the Panama Digital Gateway. Fiber broadband is widely available across the central business districts, and Ookla data published in the Digital 2026 report put the national median fixed download speed at around 186 Mbps at the end of 2025, up more than 22 percent year on year. Around 30 coworking and flexible office spaces operate in Panama City, with established operators including Spaces and Regus, Selina and Innova 109 in Ciudad del Saber, alongside several local independents in Casco Viejo and Marbella.

Tocumen International Airport (PTY) is the primary aviation hub of Central America and the home base of Copa Airlines, a Star Alliance member that operates a fleet of 126 Boeing 737 family aircraft as of January 2026 and serves around 88 destinations across 32 countries in the Americas. Tocumen handled 19.25 million passengers in 2024. Direct long-haul connectivity to Europe is real but concentrated, with 26 weekly nonstop flights to four European cities according to Panama official tourism data: Madrid with Iberia and Air Europa at 11 weekly, Amsterdam with KLM at 7 weekly, Paris with Air France at 5 weekly, and Istanbul with Turkish Airlines at 3 weekly. Spanish is the working language across all formal sectors, while English is widely usable in banking, finance, expatriate-facing services and the Canal professional environment.

A two-bedroom apartment in Costa del Este or Punta Pacifica typically rents for USD 1,500 to USD 3,500 per month, while comparable space in Casco Viejo or El Cangrejo runs around USD 1,000 to USD 2,200. A mid-range restaurant meal costs about USD 12 to USD 20. Supermarket basics are broadly in line with Costa Rica levels rather than materially above them, with cost-of-living aggregators placing Panama roughly even with or modestly below Costa Rica on groceries, and well below high-cost hubs such as Singapore or Switzerland.

Healthcare is a genuine operational strength. Pacifica Salud, with its Punta Pacifica hospital opened in 2006 and a Costa del Este branch since February 2022, is the first hospital in Latin America and the Caribbean affiliated with Johns Hopkins Medicine International and delivers tier-one care. Private health cover for a single adult varies widely by age, deductible and whether the plan is local or international, with comprehensive international policies that include United States coverage running materially higher than basic local plans. Personal security in central Panama City is comparatively strong by regional standards in the financial district and expatriate neighborhoods, but the risk profile worsens sharply outside core zones, notably Colon, San Miguelito and the Darien region, where the Darien Gap carries severe official travel warnings. The climate is tropical, with a dry season from December to April and a rainy season broadly from May to November.

Panama institutional risk profile has improved but is not clean. It exited the Financial Action Task Force (FATF) grey list on 27 October 2023 and was removed from the European Union list of high-risk third countries through Commission Delegated Regulation (EU) 2025/1184, effective on 5 August 2025. It nevertheless remains on the European Union list of non-cooperative jurisdictions for tax purposes as of 17 February 2026, with the next review scheduled for October 2026. The economic substance reform has now been enacted, as Ley 526 de 28 de mayo de 2026 imposes substance requirements on entities of multinational groups that earn foreign-source passive income and taxes non-qualified entities at 15 percent from fiscal year 2027, replacing the earlier draft known as Bill 641. For large multinational groups, exposure to the Organisation for Economic Co-operation and Development (OECD) Pillar Two top-up tax above EUR 750 million remains unaddressed by any domestic Qualified Domestic Minimum Top-up Tax (QDMTT), which Ley 526 is not. The Canal and ports question should be treated as an active geopolitical risk rather than resolved, as the Panama Supreme Court annulled the Panama Ports Company concession in January 2026, the government ordered the occupation of the two canal ports in February 2026, CK Hutchison launched international arbitration, and the BlackRock-led acquisition of the global port portfolio remains stalled.

Panama

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FAQ

What entry rights and short-stay conditions apply to foreign nationals in Panama?

What long-term residence options exist in Panama for internationally mobile individuals?

How does taxation apply to residents and foreign-source income in Panama?

Can foreign residents open bank accounts and deploy capital in Panama without friction?

Is Panama a viable operational base for foreign professionals?

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