Fastest processing time on getting permanent residency in Panama through the newest immigration category as Qualified Investor.

The Government of Panama through the National Directorate for the Promotion of Investments of the Ministry of Commerce and Industries (MICI) under Executive Decree No. 722 of October 15, 2020,has created a NEW migratory subcategory for Permanent Resident as a QUALIFIED INVESTOR, in order to promote investments on the following areas: Real Estate, Securities and Bank’s Fixed Term Deposits.

According to ECLAC, latin america and the caribbean will present a positive growth in 2021 despite the significant contraction of -7.7% in 2020, their projections determine a growth of 3.7% for 2021 and among those countries Panama stands out with a growth projection of over 5% for 2021.

The efforts being made by latin american countries to keep a devastated economy afloat are critical, in particular the reception of foreign direct investment, the latin american region received 33% less investment in 2020 than the previous year. This has affected countries such as Argentina that already by 2019 were receiving only half the investment of 2018, and in 2020 received a mere 15% of the same value.

In this context, the role of the policies that create incentives for the investment promotion is highly necessary, not only at the macroeconomic level, but also as a mechanism that manages to energize and reactivate the economic growth severely affected by the COVID-19.

The new QUALIFIED INVESTOR program can be accessed through the following types of investments and their requirements:

By reason of Real Estate Investment:

• With a minimum Investment of 500,000 USD on a Real Estate property free of encumbrances; until October 15, 2022, the amount may be 300,000 USD.
• Certification of the Public Registry of Panama that proves the ownership of such real estate.
• Certification of the National Authority of Titling of Lands that proves the value of the real estate.

By reason of Real Estate investment by promise of purchase and sale contract:

• With a minimum investment of 500,000 USD made through a trust deposit handled by a local bank or trust company; until October 15, 2022 the amount may be 300,000 USD.
• Authenticated copy of the contract of promise of sale of the real estate property (s) duly registered in the Public Registry.
• To provide the original or authenticated copy of the trust contract in which must be established that the total amount given in trust will be disbursed in partial payments related to the payment of the obligations assumed by the settlor on the occasion of the promise of purchase and sale celebrated with the real estate company.

By reason of investments made through a brokerage firm with a license approved by the Panamanian Superintendence of Market Securities:

• With a minimum investment of 500,000 USD, on securities issued from business that impact on the national territory, through the Panama Stock Exchange.
• Certification issued by the Securities House with license approved by the Panamanian Superintendence of Market Securities, where the name of the investor, amount of the investment, the detail of the securities held,  and its custodian entity.
• Authenticated copy of the resolution where the Panama Superintendency of Market Securities grants the securities brokerage house license where the applicant’s investment account is held.
• Certification issued by the Panamanian Superintendence of the Market Securities in relation to the registration of the securities corresponding to such investment.

By reason of investment in Time Deposit in the Banking Sector:

• Minimum investment of 750,000 USD free of encumbrances. The deposit should be for the minimum term of five (5) years,
• Authenticated copy by the issuing bank of the fixed term deposit’s certificate, indicating holder, value and term.
• Bank’s certification stating the existence of the fixed term deposit, holder, value, term, also indicating that it is free of encumbrances and that the funds have come from a foreign source.

Evidence that the funds used for the investment come from overseas through one of the following:

• Letter from local or overseas bank, certifying the remittance of funds. If the document is issued abroad, must be legalized by a Panamanian consulate or by Apostille.
• Bank statement from the overseas bank, duly stamped and legalized.
• Notarized letter issued by the recipient of the funds, or original bank certification confirming the deposit or transfer and that the funds come from a foreign source.

What is the difference of the new Qualified Investor status with other similar investment subcategories in Panama?

Initially some migratory categories from different types of investments grouped by economic reasons were created, then how Qualified Investor status is different?.Here we mention all types in a brief summary.

1. Macro-Enterprise Investor. Where a minimum capital of 160,000 USD is invested into shares of a Panamanian company.
2. Economic Solvency by Fixed term deposit. Placing 300,000 USD in a local Panamanian bank for a period of 3 years.
3. Economic Solvency by Real Estate Investment. With the purchase of at least 300,000 USD in real estate.
4. Economic Solvency by Mixed Investment. In a mixed investment of minimum 300,000 USD between a Time Deposit and Real Estate.

Then, the NEW migratory subcategory for Permanent Resident as Qualified Investor is also created under the category of Permanent Resident for economic reasons, that is to say, now there would be five subcategories that an investor could apply.

But, what differentiates the NEW migratory subcategory for Permanent Resident as Qualified Investor from the four previous subcategories?

First of all, the initial application must be addressed to the Director of the National Directorate for the Promotion of foreign direct Investments and not to the immigration department, since this agency shall issue an investment certification made in any of the Qualified Investor options.

Secondly, the previous subcategories (1,2,3,4) should keep a holding period or maintain the investment  of two years in the case of Real Estate or Macro investment and 3 years on the Fixed Term Deposit, in the case of Qualified Investor it should be kept for 5 years and the National Directorate for the Promotion of Investments each of the five holding years, shall request good standing documents of the investment holding.

One of the greatest advantages of the new migratory subcategory for Permanent Resident as QUALIFIED INVESTOR, lies mainly in the processing time which the Permanent Residence resolution shall be issued, since it cannot be more than 30 working days from the moment of application filing. Unlike the other subcategories (1,2,3,4) for Economic Reasons, where the application for PERMANENT RESIDENCE must be filed a second time after 2 years from the first application, in order to issue the resolution of definitive permanence.

That is to say, with the new subcategory of QUALIFIED INVESTOR, you will have your Permanent Residence Card in approximately 30-40 days.

Another immense advantage is that the application can be submitted with the use of a proxy, meaning that the applicant and his dependents are not initially required to enter Panama for the application filing.  However, once the resolution is approved after 30 days, they will have to enter Panama for the process of affiliation in the Immigration Service and the issuance of the migratory card.

That is to say, the applicants arrive only once in Panama and takes their Permanent Residence card with them, unlike other subcategories of Investment, where applicant(s) should enter and stay in Panama two or three times during the application process.

As for the processing requirements before the National Immigration Service, the cost of the checks payable to the government as a Qualified Investor increases, both the check from the National Treasury and the payment to the National Immigration Service are 5000 USD each.

The requirements for the QUALIFIED INVESTOR permit:

• Power of Attorney granted by the applicant (notarized).
• Affidavit of Personal Background history Form.
• Request of the legal proxy.
• Three (3) passport size photographs.
• Payment to the National Treasury for 5,000 USD
• Payment to the National Immigration Service for  5,000 USD
• Copy of the passport duly verified ( Public notary or corresponding Authority).
• Certification issued by the National Directorate for the Promotion of Investments. (MICI).
• Apostilled Certificate of Criminal Record.
• Health certificate.

If you have dependents, provide in addition:

• Power of Attorney and joint application to the principal, the dependent who is of legal age.
• Certificate that proves the kinship: marriage or birth certificate (authenticated, apostilled and translated).
• Notarized Letter of Responsibility.
• Letter of Authorization in case of presenting only one of the parents.
• Payment to the National Treasury for 1,000 USD (for each dependent).
• Payment to the National Immigration Service for 1,000 USD (for each dependent).

The children older than 18 years of age, but younger than 25 years of age must contribute:

• Study center certification that accredits condition of full time and regular enrollment. Apostilled.
• Affidavit of bachelorhood before a Panamanian notary public.

Why is Residency by investment in Panama an option for me?

The COVID-19 has motivated to reengineer people investments and encouraged the desire to be prepared to relocate their company or domicile into another country or even acquire a new citizenship. Residency by foreign direct investment becomes the perfect vehicle to acquire citizenship in Panama, being able to obtain this status once you have completed 5 years of permanent residency.

As newer fiscal policies are implemented on the globe, for instace the Eurozone with tax deferrals, guarantees or direct fiscal measures will have an impact on growth, but will also create an impact on the budget to be recovered in the following years.

Before and during the Covid_19, Panama has maintained a favorable regime for foreign investment, such incentives to promote tourism activities regulated in Law 80 of November 8, 2012, as amended on December 31, 2019,  determine that all new investments in bonds, securities or financial instruments on new projects or expansions of tourism projects, the invested amounts will be considered 100% tax credit for income tax purposes.

Panama special Economic Zones are on great demand for business relocation, with operations in large complexes established geographically each one with different business friendly environments, logistic, manufacturing, scientific and industrial parks such as:

Colon Free Zone; law 18 of June 17, 1948.
Panama Pacifico; law 41 of June 20, 2004.
City of Knowledge; law 6 of February 10, 1998.
Law on Headquarters of Multinational Companies; law 41 of August 24, 2007.
Free Trade Zones; law 32 of April 5, 2011.

Furthermore, in the short term is not on the intention of the Ministry of Finance to raise taxes on companies, or to disadvantage current foreign investors, and explained that the reactivation strategy is focused on redefining the budget and going out to the capital market with the placement of State Bonds.