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The Land Of Promise

15 Jan

The Land Of Promise

You know I’ve been bullish on Panama for years.

Long-term, Panama will be one of the main global business hubs, competing with Singapore and Dubai…

All in all, Panama is a country where you should consider “planting a flag.”

Panama uses the U.S. dollar, so you won’t get any currency diversification, but for many people that may be a plus.

It’s centrally located—giving easy access to all of the Americas and even Europe at this point, with many direct flights across the Atlantic.

The financial and offshore structures industry is fairly mature, with many options for service providers who speak English.

Panama is a great place for a backup residency… in other words, an overseas residency option that gives you an escape hatch if things turn sour back home.

Other countries may have easier bureaucracies when it comes to applying for residency… and other countries may have cheaper legal and government fees… but once you have permanent residency in Panama, you only need to be in the country once every two years (and for only 24 hours each visit).

Panama gets an A+ for residency.

So, if you want to seek residency in Panama, what are your options?

Well, there’s a long list of residency permits…

1. The Golden Visa

The most straightforward is the permit that allows you to invest $300,000 (increasing to $500,000 in October 2024) and apply for residency.

The $300,000 investment can be in real estate (you have to hold title in your own name) or a bank CD in any combination you like. For example, you could buy a $200,000 condo and put $100,000 in the CD.

Besides being easy, the Golden Visa grants you permanent residency with the first application. The only other residency permit that does that is the pensionado residency permit for retirees. The rest require at least one subsequent renewal before you get permanent residency.

2. The Retiree Visa

The pensionado visa works for anyone who is receiving a pension—private or government. For Americans, that means if you’re on Social Security, you can qualify for this residency permit. The minimum pension income required is $1,000 for a single person and then $250 for each dependent, i.e. $1,250 for a married couple.

The government fees are cheaper for the pensionado visa than they are for the other options.

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3. The Friendly Nations Visa

If you’re interested in doing business or working in Panama… nationals of 50 countries, including North Americans, as well as EU and U.K. citizens, are eligible for the Friendly Nations visa.

You must invest $200,000 in real estate in Panama; or, invest $200,000 in a fixed-term deposit in a Panamanian bank; or, secure a contract of employment.

You must also open a local bank account with a minimum deposit of $5,000 for the main applicant and $2,000 for each dependent.

You first get a temporary residency card that is valid for two years. After the two years are up, you can apply for permanent residency.

4. The Business Investor Visa

To qualify as a business investor, you must invest a minimum of $160,000 in a new or established business in Panama. A minimum of five Panamanian employees must be hired.

If you are applying with dependents, the minimum investment increases by $2,000 for each dependent. Or you can deposit that amount in a bank account in Panama.

This route also gives you a two-year temporary residence permit. And then you can apply for permanent residency.

5. The Forestry Investor Visa

Designed to encourage the replanting and preservation of Panama’s forests, the reforestation visa is another investment option.

You can apply with an investment of at least $100,000 in timber (plus $2,000 for each dependent) in an approved reforestation project.

Again, this route gives you two-year temporary residency; after that, you can apply for a permanent residence permit.

However, an investment of $350,000 will get you near-immediate permanent residency.

All visa applications must be made through a Panamanian lawyer…

The Path To A Panama Passport

Acquiring a second citizenship is typically a later step in any go-offshore plan.

Most people start with residency… and at a later point may seek citizenship in the country where they have residency.

Not everyone is interested in the idea of getting a second passport. Understand, though, that this can be the single most powerful option for creating options, not only for you but also for your children—as second citizenship grants a permanent right to live and work in the country, and you pass it on to your descendants.

Panama allows you to apply for naturalization after five years of permanent residency. This means you can apply five years after you’re approved for the Golden Visa permit. If you qualify for residency under one of the investment options that require renewals before getting permanent residency, it’s important to note that your timeline doesn’t start when your temporary residency is first approved—but when you receive permanent residency.

Panama does allow for dual citizenship if you’re born with Panamanian citizenship. If you’re naturalized, you’re meant to renounce all previous citizenships. For someone looking to give up their current citizenship (for example, renouncing your U.S. citizenship so that you no longer have obligations to the IRS), that’s not a problem. However, most people are looking to hold multiple passports.

Panama doesn’t specifically require proof of renunciation, so most people who get naturalized don’t bother giving up their previous citizenships… and the reality is that it probably doesn’t matter. Just be aware that if you do that, it’s possible to have your Panama naturalization revoked.

Don’t expect to have your Panama passport quickly once you apply for naturalization. It can take a year or more to be approved for naturalization. One friend of mine waited more than two years from applying to getting his passport.

Once you have a Panama passport, you’ll be able to travel to 144 countries without getting a tourist visa in advance. That’s a good number, but 65 other countries have more countries they can visit without a visa. The countries that most people would want to visit—most of the Americas and Caribbean as well as Europe—are included in the 144 countries as well as some Asian and African countries.

All in all, a Panama passport is a great travel document… once you get it.

Stay diversified,

Lief Simon Signature

Lief Simon

Editor, Simon Letter