Panama Tax Lawyers

Growing German Diaspora in Latin America 2025

Alex A. — Sat, 08 Mar 2025 19:25:03 +0000

German Colonization in Latin America.

German ocupancy of latin america countries in 2021 (thousands).

Venezuela

The German diaspora in Latin America began around the year 1530 when the King of Spain Charles V gave part of Venezuela to the families of German bankers, the Welsers, and likewise to the Fuggers in South America. The Welsers would form colonies in Maracaibo, although they did not last among the Spanish colonies.

Brazil

It was only in the middle of the 19th century after the Second World War that the German settlements managed to be included in the Latin American society. German colonialism already existed in Brazil, taking advantage of the conflict with Uruguay in 1820 to settle in the territories of southern Brazil and with much more firmness in the last quarter of the 19th century, in spite of maintaining a history of difficulty in their adaptation during the time of the war, they excelled especially in agricultural activities.

Chile

In Chile, Argentina and Uruguay, a similar phenomenon existed, although Chile received a considerable number of German migrants since the First World War, being one of the most successful settlements of Germans.

Paraguay

In Paraguay they only appeared after the war of the triple alliance, although with failed settlements as the one originated by the sister of the well-known philosopher Friedrich Nietzsche, which founded Nueva Germania, although in 1938 its population declined to only 130 Germans. Hohenau in south-eastern Paraguay was the nucleus of colonization and much of its population remained of predominantly German ancestry.

Below represented on the map the concentration of german people in the world today.

Source: Allice Hunter, wikimedia

Main reasons for the departure of Germans from Europe 2025.

Millions of Germans have left Europe in the last two hundred years, although the vast majority went to Canada and the USA; the next region of major German migration has been Latin America. The reasons were mainly economic, with wealthy German families and other German-speaking families migrating after World War I and World War II and making significant settlements. Currently, the same phenomenon is looming but under the shadow of new “threats” to the German family and society such as the following:

Increase of refugees in Germany.

Currently the reasons for emigration of German citizens have changed, especially since the migration wave of refugees arriving to Germany of almost 1.24 million and with more than 200,000 asylum seekers, becoming the largest recipient of refugees in Europe, creating a social and cultural crisis which has been one of the main reasons for the departure of the teutons.

Increasing Discrimination and Intolerance.

As stated by Human Rights watch in its report – Germany events in 2020-, discrimination and intolerance have resulted in an increase in crimes, many of them anti-Semitic, which have provoked constant unrest, uncertainty and insecurity among citizens.

War situation in neighboring countries.

European tensions have increased considerably, due to the possible escalation of the conflict in neighboring countries. In addition to the instability it has created as a direct result of the economic impact of trade has led many German companies to migrate to other latitudes.

Panama: A new destination for Germans.

The main emigration destinations for Teutons in America are the United States and Canada, followed by Brazil, Chile, Mexico, Argentina and lately Paraguay. In the region of Caazapá, Paraguay; the community “El Paraiso Verde”, has received more than 3000 people in recent years in an urban development project that is criticized for its ideological currents, as The Guardian points out in its article on Covid deniers.

In Central America, Panama stands out with more than 84,822 German visitors in 2024 according the Panama immigration movement statistics of 2024, with 354 residence permits granted in comparison with the 273 permits granted in 2023, demonstrating a genuine increase of interest of the Teutons to settle in tropical lands.

Panama fosters multiculturalism and respect for ideological currents, with entire communities of expatriates located in every corner of the country, a clear example is the city of Boquete in the province of Chiriqui and also the Panama City itself. Chiriqui province stands out for being the agricultural production center of Panama, supplying the whole country with the main vegetables and meat products.

Unlike its South American neighbors, Panama enjoys reduced seismic activity and, compared to other Central American and Caribbean countries, there are no hurricanes, only tropical depressions during the rainy season.

Under the threat of conflict from neighboring countries, in the face of a possible escalation of actions due to different war conditions, Panama has been and will be one of the most stable destinations in the Central American region. Enjoying tax advantages once being residents of Panama makes it more attractive than other countries in the region.

The Panama Canal has always been the driving force of the economy and also one of the reasons why the country’s neutrality posture is relevant in geopolitical issues, as well as its importance in the world economy, in terms of investments and imports.

In search of family safety and access to natural enviroments, thousands of german families have benefit of the Panama immigration programs known as Friendly Nations visa, pensioner visa, and investment visa for permanent residence and later citizenship.

Visa for remote workers (Digital Nomads) in Panama 2025.

Alex A. — Mon, 03 Mar 2025 23:36:50 +0000

New working regulations caused by the pandemic are redefining the corporate culture in conjunction with the physical spaces. Teleworking has opened a whole range of global possibilities for the labor offer and with the entry of digitization the future of the spaces has no borders.

This is how Digital Nomads are taking advantage of the opportunities offered by the so-called “Nomadic Residency” that several countries such as Bermuda, Australia, Antigua and Barbuda and now Panama (new visa for remote workers) are offering.

Panama, historically a nomadic country.

Panama is a multicultural country that has historically opened its doors to thousands of foreign migrants, since according to Panama’s immigration statistics, from 2010 to 2020 more than 108,000 permanent and temporary immigration permits have been granted. In 2025 from the permits granted, the countries of Colombia Venezuela and Nicaragua together occupy 59% and approximately 6.55% came from countries considered by Panama as friendly nations or with treaties with Panama, where countries such as the United States, Spain, Italy, Mexico, Brazil, Canada, France, Chile, Argentina, Costa Rica have been the most representatives.

The reasons for relocating in Panama have been varied, since there is a large colony of mostly North American pensioners located in cities such as Boquete, Panama and its surroundings.

Panama is considered the first retirement destination in the world according to the annual global index published by International Living for 2025. These indicators compare and quantify people’s experiences in terms of quality of life and cost of living, governance, benefits, development, entertainment, access to health, visa programs, among others. Panama obtained highest scores due to their benefits and discounts that retirees enjoy and the ease of the legal visa process through its Pensionado Visa.

Another reason for getting Panama residence has been work, since the tax, immigration and logistical benefits of this jurisdiction attracts multinationals and companies that have operations abroad, in addition to its international air mobility allows movement within the region with little difficulty.

The Forbes magazine for 2021 has considered Panama among the first destinations of high value and security to relocate and live for working nomads, among its characteristics highlights its privileged location between two oceans, the warmth of its temperature, free of hurricanes and economic stability.

How do I obtain my Digital Nomad Residency in Panama?

First of all, let’s categorize the types of Digital Nomads that exist. We find the remote workers, freelancers and entrepreneurs. It is necessary to understand there are several immigration programs that are best suited according to the circumstances and needs, here below we review the most useful.

Remote Workers

Remote workers are employees or managers of companies that following the new Covid 19 corporate culture rues, do not need to reside at their headquarters, although they usually locate in a place of easy mobility in case they need to participate in face-to-face meetings. Normally the period of overseas residence is a year or more.

The following Panama programs are recommended for those type of workers:

When the worker’s citizenship is within the friendly nations countries, the friendly nations visa can be applied as well. The permit new regulations provides temporary residence for 2 years and afterwards a permanent status.
Panama-Italy Treaty, in case the applicant is has an Italian citizenship.
New digital nomal short stay Visa as a Remote worker. it grants temporary residency for nine months, renewable only one time for the same period.

Freelancer

Freelancers are independent professionals who provide their online services to third parties. Here we usually find software developers, stockbrokers, writers, copywriters, consultants, data analysts, language professionals, etc.

For those workers we recommend the following programs:

New digital nomal short stay Visa as a Remote worker. it grants temporary residency for nine months, renewable only one time for the same period.
When the worker’s citizenship is within the friendly nations countries, the friendly nations visa can be applied as well. The permit new regulations provides temporary residence for 2 years and afterwards a permanent status.
Panama-Italy Treaty, in case the applicant is has an Italian citizenship.

Entrepreneurs or Start-up

They are entrepreneurs with their own digital business and manage it from any city they are in. Here we find Bloggers, Youtubers, affiliate marketers, dropshipping companies, etc.

For entrepreneurs we recommend the following programs:

New short stay permit as a Remote worker. Temporary Residence for nine months, renewable once for the same period.
When the worker’s citizenship is within the friendly nations countries, the friendly nations visa can be applied as well. The permit new regulations provides temporary residence for 2 years and afterwards a permanent status.
New digital nomal short stay Visa as a Remote worker. it grants temporary residency for nine months, renewable only one time for the same period.

How to apply for the new Short Stay Permit as a Remote Worker?

With the executive decree 198 of May 7 2021, as a result of the COVID-19 situation, the Digital Nomad Short Stay Visa as a Remote Worker was created under the migratory category of Non-Resident and applies under the following conditions:

Have a contract as an employee of a foreign company of transnational character or be a self-employed worker, in the modality of telework.
Perform functions that take effect abroad.
Receive income from a foreign source and with an annual amount not less than thirty-six thousand U.S. dollars USD 36,000 or its equivalent in foreign currency.

Under contract with a foreign company.

For your application you must include the following documents:

Application form.
Three passport size pictures
Copy of the medical insurance policy with coverage in Panama with validity period of your term of stay.
Certification or proof of the existence of the foreign company in the place where it is registered.
Affidavit of not to engage in another work offers or service in Panama, with nationals, residents, tourists or companies to carry out business in Panama.
Payment of two hundred and fifty dollars (USD 250.00) to the National Immigration Service account.
Letter from the company with letterhead, signed by the legal representative, stating:

- The general data of the applicant.
- The position and functions performed.
- Salary, which cannot be less than three thousand dollars USD.3,000 or its equivalent in foreign currency; periodicity of payments and that the same comes from a foreign source.
- The work modality (remote work).
- The written commitment to bear the return or repatriation expenses to their country of origin or destination, if necessary

As an independent or self-employed worker.

Requirements:

Certification or proof of company ownership, duly registered abroad, through which you will carry out your business.
Affidavit before public notary, describing the commercial relationship with the clients to whom it renders services, which must include the following data: complete name, general information of the applicant and clients, which are the services provided, how much it earns for those services, the origin of the funds and the periodicity of the payments received in attention to the performed services.

For the application, the following documents are mandatory:

Application form.
Three passport size pictures
Copy of the medical insurance policy with coverage in Panama with validity period of your term of stay.
Affidavit of not to engage in another offers of work or service in the national territory, with nationals, residents, tourists or companies to carry out business in Panama.
Payment of two hundred and fifty dollars (USD 250.00) to the National Immigration Service account.

In both cases under contract or as independent worker, the foreigners who request the Short Stay Visa as a Remote Worker must prove that their income comes from overseas, providing any of the following documents:

Bank certification stating that the received income comes from overseas and is related to the declared working contract.
Certified bank statement from the overseas bank or from local bank, proving the remittance of the funds related to the declared working contract.

All documents issued abroad must comply with the provisions of Article 247 of Executive Decree No. 320 of August 8, 2008.

To request the extension of the Short Stay Visa as a Remote Worker, the interested party must comply with the same requirements at the time of filing the application for the first time.

Things to consider

All allowed nationalities may apply for this permit, in the case of stamped entry visa countries, first should apply to the corresponding entry visa at the nearest Panama embassy or consulate and consequently apply for a Short Stay Visa as a Remote Worker once in Panama.

It is forbidden to conduct activities or engage on business with effect within Panama territory.

The validity period of this visa is for 9 months, extendable for the same term only once.

This permit is an individual permit, dependents can’t apply under this program.

In the case of foreigners whose purpose is to provide non-profit social services, covered by agreements with the government, trusts or non-governmental organizations recognized by the Ministry of Economy and Finance, those who participate in student exchanges and those who provide these services under the modality of remote worker, this visa may be extended once for the same term, and they will be exempted from the payment of expenses for migratory services.

Peru is the new member of the Panama Friendly Nations program as of August 2021

Alex A. — Mon, 02 May 2022 17:50:45 +0000

By Executive Decree No. 226 of July 20, 2021, the Republic of Peru is included among the specific countries that maintain friendly, professional, economic and investment relations with the Republic of Panama.

As of August 7, 2021, all Peruvian citizens will be able to access the Permanent Residency Program ¨ Friendly Nations Visa ¨ as well as their South American counterparts from Brazil, Uruguay, Paraguay and Argentina. This subcategory has been one of the most requested since its creation in 2012.

How to access the new Friendly Nations Visa program?

Applicants must meet the following requirements (main applicant):

Apostilled Police Record.
Second identification.
Health Certificate.
Certified check in favor of the National Treasury USD 250.
Certified check in favor of the National Immigration Service USD 850.
Three passport size photographs
Documentation that demonstrates the purpose of requiring your residence according to the economic or professional activity to be carried out, demonstrable for any of the following reasons:

- Labor Reasons: in which the applicant must provide a working letter from a local company that employs him/her in Panama, indicating his/her position, salary and the commitment to assume his/her repatriation expenses. He/she must also provide the certificate of public registry of the company that employs him/her and the notice of operations. For the approval of the Residence Permit, the working permit must be processed on the Ministry of Labor and Labor Development.

- Investing on real estate: demonstrating the ownership of a real estate property in Panama with a minimum value of USD 200,000 in a personal capacity, or under the name of a Panamanian corporation where the natural person is the final beneficiary of the shares or under a Panamanian foundation where the natural person is the founder and beneficiary of the same. The acquisition of the property may also be financed through a local bank.

- Fixed term deposit with a certification issued by a general license bank in Panama for the deposit of USD 200.000 on 3 years fixed term into personal capacity, or under the name of a Panamanian corporation where the natural person is the final beneficiary of the shares or with a Panamanian foundation where the natural person is founder and beneficiary of the same one.

In case of dependents, the dependents of the main applicant are allowed, such as spouse/husband, children up to 25 years of age, parents of the main applicant, relatives with disabilities, whom should provide with a proof of kindship apostilled (marriage certificate, birth certificate), also with the payment of fees in favor of the national treasury and the immigration service, police record, health certificate, passport size photos and proof of domicile in Panama.

This permit grants a temporary residence for two years, after which Permanent Residence may be requested, fulfilling the same requirements with the exception of the payment of checks to the National Treasury and the National Immigration Service.

The procedure comprises two stages, the first one where you will have to visit Panama twice, once for filing your application, the second one 3 months later to pick up your temporary card. The second stage, two years later, you will also have to visit us twice, first for the submission of the requested documentation for the permanent card issuing and over the next 3 months a nsecond visit in order to have your photo taken for your permanent residency card.

What are the advantages of the new Friendly Nations Visa Program?

The requirements are more flexible than other permanent residency programs such as Spain, Portugal, Malta, Greece, Bulgaria or Canada.

You can bring your entire family on one application (parents, children, dependents).

Investment amounts are with a minimum of USD 200,000

It is also possible to obtain this visa without investing by obtaining a labor contract with an operating company in Panama. That is to say, you can also relocate your company from Peru to Panama, creating a new Panamanian company and making an employment contract with the applicant.

There is also a Free Trade Agreement signed between the Republic of Panama and the Republic of Peru signed in Panama on May 25, 2011, and approved by Law No. 82 of December 22, 2011. It establishes the preferences granted to goods originating from both Parties, Public Contracting, Investments, Financial Services, Maritime Services, telecommunications, among others.

This treaty between Panama and Peru establishes that 93.1% of Peruvian exports have zero tariff access, which also applies to 99.2% of Panama’s sales to the Andean country.

In other words, you can operate your company from Panama, receive your payments here and even send raw materials purchased through Panama or goods and send them to Peru or vice versa, taking advantage of the tariffs benefits of this FTA.

What is Peru’s Scenario for 2021-2022?

Experts such as the president of the Peruvian Central Bank, Mr. Julio Velarde, maintains a positive attitude, indicating that Peruvian monetary policy will accompany the recovery and will allow the access to cheap international financing. Peruvian fiscal policy is expected to have international stimulus. He also trusts that vaccines will continue to be distributed, although the vaccination process in Peru has not been satisfactory to date, he also considers that the ¨commodities¨ will go favorably in general terms of a 10% increase, such as copper.

Currently, Peru still maintains social and political controversy created by the last elections with the victory of the left leaning Pedro Castillo, the economic uncertainty has increased and is still looking for ways to overcome the 50% fall of formal and private jobs on affected sectors such as tourism, hospitality and construction.

According to Mr.Velarde, tax changes are expected, such as Wealth Tax, although it was considered non constitutional, but the courts may change their criteria on future.

According to The Economist magazine, Big Mac index, the Peruvian currency devaluation reached 42.2%, the second currency most devalued in Latin America so far this year 2021. Mexico has the highest devaluation currency rate with 43.7%.

How to invest in Panama´s Real Estate (house, apartment, commercial property, farm or land) ?

It is necessary to take into account several verifications such as:

Verify the legal status of the property (ANATI, Public Registry), that is, titling in the case of land and farms and that do not have any legal disputes of inheritance or disposition of assets over the property.
Property good standing with the tax authority (DGI), on property tax and improvement´s tax.
Seller should have full sale capacity (legal and health capacity) or in such case through a legally authorized proxy. To avoid unsuccessful transfers that can lead to frauds and the loss of your money.
In the case of properties with several years of construction and with a valid occupancy permit, checking the number of remaining years which tax exemption for improvements. ( new regulations for newly constructed buildings).
If your objective is to lease the property, first need to check the market situation of the area, in order to know the expected monthly income you will generate with the acquired property.
Determine if you will make the purchase as a natural person, corporation or you will use a Panamanian foundation.

Do not hesitate to ask any questions or contact us to discuss any of the above mentioned points.

Steps for the purchase of Real Estate in Panama:

Having undergone the above verification points. (1-6)
Make a promise of sale agreement with the property owner or developer for the downpayment if required.
Draft of the purchase and sale agreement for the transfer of funds to Panama indicating the payment terms. Depending on the developer, partial payments can be done in Peruvian Soles or a complete payment in American dollars or other currency may be accepted (call us for more information). On the agreement all the conditions for the purchase sale and the responsibility of each party on the payment of taxes, registry rights must be clearly stipulated.
The tax forms corresponding to 2% (ITBI) and 3% (profit gain) will be filed, and a payment certificate is issued.
Any mortgage over the property must be lifted, the process can take around 30 days.
The deed and minutes of the Purchase-Sale agreement are drawn up before a Notary Public between the buyer and seller (or by power of attorney of the buyer and seller).
Payment of registration fees and when the deed is duly registered, the Public Registry Certificate is issued under the name of the new owner, ANATI and DGI information shall be updated as well.

Check the offer of finished projects with different payment facilities in Panama here.

Major changes to Panama’s Permanent Resident ¨ Friendly Nations Visa ¨ Program in 2021.

Alex A. — Mon, 02 May 2022 07:54:42 +0000

Panama has issued more than 2000 yearly residence permits under the permanent resident immigration subcategory as national foreigner from specific countries who maintain friendly, professional, economic and investment relations in the Republic of Panama, ( Friendly Nations Visa ) of which a large percentage had come from the North American region, showing a yearly increase of 3.1%.

The Friendly Nations visa was created 9 years ago to promote Panama’s economic and commercial development with countries under this decree and the acquisition or creation of new companies in order to boost local employment generation.

In the last decade the countries that made the most applications for these migration programs according to statistics of the Immigration Department of Panama have been (in order of number of approved applications): Spain, Mexico, Brazil, Costa Rica, Argentina, France, Canada, Portugal, Chile, Germany, United Kingdom, Switzerland, South Korea, Japan, Israel, Uruguay, Holland, South Africa, Belgium, Australia, Taiwan, Denmark, Greece, Sweden, Hungary, New Zealand and Singapore.

The benefits of the so-called “Friendly Nations Visa” program are recognized worldwide, not only because is among the cheapest permanent residences in the region but also has a short processing time period of 3 to 4 months.

What are the changes enacted in May 7th 2021 and how do they affect my application?

On May 7, 2021 the new Executive Decree 197 amends the Decree 416 of June 13, 2012 that creates the ¨Friendly Nations Visa¨, adding new conditions and requirements for this migratory subcategory as we summarize below:

The countries that may opt for this permit are:

United Kingdom, Germany, Argentina, Australia, Korea, Austria, Brazil, Belgium, Canada, Spain, Finland, Netherlands, Ireland, Japan, Norway, Czech Republic, Switzerland, Singapore, Uruguay, United States, Chile, Sweden, Poland, Hungary, Greece, Portugal, Croatia, Estonia, Lithuania, Latvia, Cyprus, Malta, Serbia, Montenegro, Israel, Denmark, South Africa, New Zealand, Hong Kong, Luxembourg, Liechtenstein, Monaco, Andorra, San Marino, Costa Rica, Paraguay, Mexico and Peru.

The Republic of Taiwan has been removed from the list of friendly countries, we can assume that the decision may have been marked by the breakup of diplomatic relations on June 13, 2017 with Panama.

Article 3^rd on the Decree 416 of 13 June 2012 was also amended by including a new provisional permit card to be hold by the ¨Friendly Nations Visa¨ applicants for a two years period, thereafter applicant should file another request to receive the permanent residence card.

Formerly this was not considered in this subcategory, although a similar legal basis is found as foreground on the Permanent Resident permits for economic reasons. As a result, the processing time of this permit is extended from 3 months to 2 years.

Another major change to Article 3^rd, is the fork of the proof of economic solvency requirement through a bank certification or bank statement into two new economic solvency reasons that new applicants may opt on this new regulation as follows:

For Labor Reasons.
For real estate investment reasons

For both cases, applicants must present the below requirements such as:

Power of attorney and request letter (notarized)
Three (3) card-sized photographs
Notarized copy of passport (in Panama)
Certificate of Criminal Background with apostille (country of origin).
Health Certificate (in Panama)
250 USD Certified Check addressed to National Treasury (to be done in Panama)
800 USD Certified Check addressed to National Immigration Service (to be done in Panama)
Personal History Affidavit Form
Document demonstrating the purpose of establishing your residence (Investment or professional activity to be carried out)*
Copy of second ID , as ID or card or driving license of your country.

For labor reasons

* Purpose of establishing residency through professional activity

Working letter on company letterhead, signed by the employer’s legal representative, certifying the position, salary, commitment to bear repatriation costs, as the case may be.
Panama company Public Registration Certificate from the employer.
Company operational permit. In the event that the employer is not required to maintain an operational permit, support to the same shall be provided.

Is mandatory for the Residence Permit to be granted, the applicant and his/her employer shall be obliged to process the working permit authorization before the Ministry of Labor in Panama.

For Real Estate Investment reasons

Additionally, presenting the following requirements:

To verify property ownership, applicant must present the property certificate from the Panama public registry under applicant’s name, with a minimum value of two hundred thousand dollars (200,000 USD). Purchase could also be financed through a local bank.

In case of dependents:

Letter of Responsibility
Proof of kinship, birth certificate or marriage certificate apostilled or legalized by Panamanian consulate.
Children over 18 years of age, should present a non-marriage certificate and studying enrollment certificate.

We invite you to contact us and get further information and find out what program suit best for you and your family. info@panamataxlawyers.com

Panama, a valuable country to invest in 2021, post Covid_19

Alex A. — Thu, 01 Apr 2021 20:34:06 +0000

Great expectations for Panama’s recovery in 2021, post Covid_19.

2020 was probably the most astounding year of this new millennia and not precisely for good reasons, in the entire Latin-American region the economical expectations this year anticipate a slower growth or even commercial shrinking.

Panamá is nonetheless one of the countries that most prioritize economical restoration, because of that nowadays Panama is in a transition from lockdown to an economical reopening which points to a fast reactivation in various sectors of the economy such as real estate and construction.

Precisely this September 7^th the construction sector both private and public began to function again, among many others, loosening the mobility restrictions imposed to keep coronavirus in control. The rest of which have been planned to be eliminated by mid-October.

Whilst challenges exist in these times Panama shows one of the best business environments in the region, one way of showing this are this March 2021 Moody’s and S&P evaluations of Panama’s risk which portrayed the country as the richest Latin-American country in 2021 due to the uninterrupted growth that Panama has exhibited for the last 10 years.

In addition to this, Panama with its national currency: the Balboa, which presents a 1 to 1 exchange rate with the US dollar, is a strong currency that brings stability and security to every business, which together with the low living cost and Panama’s well-developed infrastructure make of this nation one of best environments in which to invest and by itself an opportunity to diversify.

Panama’s development nowadays is being watched from everywhere around the world and shows a noticeable and sustained growth not only because of its key positioning in global commerce but also because of its government, which favors foreign investments and strongly encourages development of the private sector, together with its nurturing and protection as the means of living of its citizens.

Panama’s private sector has been taking shape and is today more solid than ever, always open to new ideas and business not only in environment but in sources of founding, as Panama displays diverse options in capital raising, useful in the creation of new markets and business strategies.

A country with investment alternatives to relocate your company

About immigration to Panama, this is one of the friendliest countries to foreigners, its immigration law presents foreigners with the opportunity to gain permanent residency with a minimum 300.000 USD investment in various sectors such as:

Real state.
Exportation processing zones.
Big business investments.
Long term investments.
Panama Pacifico special economic area.

To countries with strong currencies such as the euro and sterling pound, investing in Panama today opens new options of generating significant dividends, taking advantage of having a stronger currency in dollarized markets, in addition to its enormous potential in the productive sector, natural resources and a privileged location supported by the Panama Canal which expansion hasn’t stopped in this country free of hurricanes and earthquakes, real risks for any potential investor.

One of the opportunities that Panama provides are its special economic zones, which present tax incentives for companies in those zones, it’s also worth mentioning the duty-free zones Colon and Panama Pacifico, in the shores of both the Caribbean Sea and the Pacific Ocean. Colon being the second biggest duty-free zone in the world and the main commercial center for Latin America and the Caribbean.

Nonetheless every opportunity exhibits its own challenges, because of the criteria and requirements even the simple process of opening a bank account can take up to two months, and because of Panama being a Spanish speaking country this process must be completed entirely in Spanish, therefor it is recommended to have good in situ support in any business or investments.

A strong economy with continuous development together with a growing real-state sector, a privileged location strengthened through robust logistics and also a high quality of life make of Panama a country great to invest and live in, which added to the low interference of its government, create a safe and profitable place in which your money works for you, making of Panama the perfect country in which to create your own business.

Qualified Investor, the newest Panama Permanent Residency program of just 30 days.

Alex A. — Thu, 01 Apr 2021 17:03:23 +0000

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.

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