Permanent Residence in Panama

There are many reasons why Panama is an attractive country for foreign investment.  Its dollarized economy, the stability of its banking system, the logistical importance of the Panama Canal and its strategic position for connection with the rest of the continent are just some of the factors that place Panama among the preferred destinations for investors.

In view of the imminent arrival of foreigners, Panamanian legislation has been adapted in such a way that specific types of immigration have been created to make it easier for foreigners to obtain legal status in the Republic of Panama.

Despite the extensive list of immigration options, for the purposes of this article, we will focus on two modalities that grant the character of Permanent Residence in Panama:

By the nationality of the applicant

With the enactment of Executive Decree No. 1174 of 2013, citizens of approximately 50 countries were benefited, who may choose to apply for Permanent Resident status if they prove to have a professional, economic or investment relationship in the Republic of Panama.

It is popularly known as the “FRIENDLY COUNTRIES” immigration permit, through which the applicant must prove the existence of an economic or professional activity that links him to the country, as well as his sustainable economic solvency with the presentation of a certificate from a local bank showing a minimum balance of four (4) average figures.

The process takes 4-6 months and automatically grants the status of Permanent Resident without the need for periodic renewals.

For investment

This option is offered to foreigners, regardless of their nationality, who invest in the country a minimum of US$300,000.00 in any of the following modalities

Time deposit in the name of the applicant, in a bank with general license of the Republic of Panama, for a minimum period of 3 years.
The purchase of real estate located in the Republic of Panama, with a minimum value of US$300,000.00. The acquisition can be made in a personal capacity, in the name of a Corporation of which the applicant is a shareholder, or in the name of a Private Interest Foundation of which the applicant is the Founder and Beneficiary.
A combination of real estate and fixed term deposits for a value of US$300,000.00 or more.

The most important thing for this immigration category is to demonstrate to the National Immigration Service that the funds for the acquisition of the property and/or the opening of the time deposit, come from abroad and are free of liens.

In this particular case, a provisional residence is granted for the term of two years, and it allows to apply for permanent residence in the country afterwards.

In both cases the Permanent Residence grants the foreigner the right to receive from the Electoral Tribunal a Permanent Residence Card or “E Card”, without having to reside permanently in the country, and may extend this immigration category to their dependents (spouse, children under 18, dependent parents, etc.).

Obtaining Permanent Residence in the Republic of Panama offers you the following advantages:
Second Residence: a “Plan B” for nationals of certain countries with complicated political and economic situations.
Obtain a driver’s license renewable every 4 years.
Obtain bank credits under the same conditions as a Panamanian citizen.
Opt for Panamanian naturalization in the next 5 years (varies according to nationality). This will allow you to obtain a Panamanian passport and perform activities restricted to Panamanians, such as: Practice law or health-related professions.
With the proper planning, receive the Fiscal Residence in Panama.

An important aspect that you should not lose sight of is that Permanent Residence from an immigration point of view does not automatically make you a Tax Resident of Panama. These are two separate processes, before independent institutions and with different requirements, being the most important to demonstrate a minimum stay in the national territory of one hundred and eighty-three (183) calendar or alternate days in a fiscal year or in the immediately preceding year (Article 762-N of the Fiscal Code).  Likewise, individuals who have established their permanent home or center of vital interests in the territory of the Republic of Panama shall be considered tax residents of the Republic of Panama.

It may seem complex but the professional experts in legal matters of K&B FAMILY OFFICE will guide you to choose the most appropriate immigration category for you and your family.

 

Karyne Mora
Head of Legal – Partner
 

To learn more, contact us at:
info@kb-familyoffice.com

 
 
July, 2019

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