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.