Located in Central America, the Republic of Panama is a politically stable nation characterised by its diverse population. The country features a distinctive combination of contemporary urban living in Panama City and is also known for its rich biodiversity and various ecosystems, including tropical rainforests, cloud forests, and numerous islands in the Atlantic and Pacific Oceans.
As the vital junction between the Pacific and Atlantic Oceans, Panama’s high-income, service-oriented economy has experienced sustained economic growth driven by the Panama Canal, logistics and finance. Regarded as the strategic link of the Americas, Panama pro-investment and tax-efficient policies have made it a leading choice for global investors and businesses.
Panama provides new residents with an elevated standard of living, supported by advanced infrastructure, exceptional educational and healthcare institutions, with a low cost of living. Panama offers a fully dollarised economy that is aligned with US financial markets and supports a sophisticated banking and corporate services ecosystem.
As a result, in recent years Panama has emerged as a leading location for primary or alternate residency that enables investors, retirees and expatriates to easily secure permanent residency and, should they choose, to pursue citizenship after five years.
Panama Qualified Investor Permanent Residency Programme
The Panama Qualified Investor Permanent Residency Programme, or ‘Golden Visa’, provides international investors and their qualifying dependants, the right to live, work and study in Panama, with additional benefits including:
- Fast Track Permanent Residency Status – applications are typically processed within 30 to 45 days of submission.
- Option to include Qualifying Dependants – the main applicant can include their spouse and children under the age of 25 who are unmarried and in education.
- Multiple Investment Options – to suit most investor profiles.
- Minimal Stay Requirements – permanent residents are required to visit Panama at least once every 24 months to maintain their residency status.
- Strategic location for business – Panama offers good access to North, Central and South America.
- Significant personal and corporate tax benefits – Panama operates a territorial tax system such that income that does not arise in Panama, such as foreign-source income, is not subject to tax in Panama.
- Pathway to Citizenship – Panamanian residents qualify for citizenship after five years of legal residency.
Qualifying Investments
The Panama Qualified Investor Permanent Residency Programme offers three qualifying investment options:
- Investment of USD300,000 in qualifying local real estate.
- Investment of USD500,000 in securities listed on the Panama Stock Exchange BVPSI Index.
- Deposit of USD750,000 with a local licensed banking institution.
To retain permanent residency status, investments must be maintained for at least five years.
Territorial Tax System
Panama applies a territorial tax system, meaning individuals and corporations are not liable to taxation on foreign assets or foreign-source income. Key aspects of Panamanian taxation include:
- Zero Tax on Foreign Income – income generated, and assets held outside of Panama are not subject to tax in Panama.
- Foreign Capital Gains – capital gains from the sale of foreign assets are generally not subject to tax in Panama.
- Foreign-Sourced Dividends – dividends distributed from foreign-source profits are subject to a lower rate of 5%.
- No Wealth or Inheritance Tax – Panama does not levy global wealth, inheritance, gift or estate taxes.
- Local Bank Interest – interest earned on savings accounts or time deposits held in Panamanian banks is exempt from income tax.
Planning and Implementation
Working with professional local services partners, Sovereign can provide clients with comprehensive advice and support throughout the residency application preparation and submission process. Depending upon your chosen investment route, this may include:
- Introductions to qualifying investment providers.
- Application preparation and processing.
- Immigration meeting coordination and support.
- Assistance with identifying suitable investment or rental property.
- Setting up a company.
- Establishing local bank accounts (if required).
- Tax efficient planning and structuring.
International Mobility, Private Client and Corporate Services
Sovereign works closely with applicants during each stage of the planning and implementation process. When combined and managed correctly, the following Sovereign Group services enable individuals and families to develop and implement a comprehensive, flexible and tax efficient international Mobility, Private Client and Corporate Service strategy:
- International residency, tax residency and citizenship planning.
- International corporate establishment and management.
- Personal and corporate banking.
- Tax planning.
- Trusts and foundations.
- Estate and succession planning.
- International retirement plans.
- Wealth management.
- International life and medical insurances.
- Yacht and Aircraft registration and management Services.
Strategies are developed and implemented in accordance with each client’s specific needs. Comprehensive quotations will be provided during the planning process.
Contact Sovereign for further information
The Sovereign Group’s global network of offices, experienced client advisers and professional services partners ensures it is well-placed to assist, advise and support individuals, families, businesses and their advisers to plan, implement and manage their assets, as well as to unlock the potential of benefits of alternative residence or citizenship.
For further information or to discuss your or your clients’ requirements, please contact Ceri Pratley, Head of Residency & Citizenship Services.
