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Panama as a Relocation Destination: Standing apart from the rest.

By: Emilio Cornejo Vernaza LL.M.

Founding Partner of PGS Attorneys and PGS Realty

Overcoming a Scandal

For decades, the name “Panama” has been linked to many positive and negative concepts: from the engineering marvel of the Canal, the country’s rich biodiversity, and its multicultural background to an unfortunate link to illicit activities, such as dictator Manuel Noriega’s role in a drug cartel in the 1980s, and of course, more recently, a scandal that seems to have revealed a network of the most corrupt and unscrupulous people from all over the world, where Panama ended up assuming the full blame in a much larger scheme.

It has been over four years since the infamous Panama Papers, a scandal that portrayed Panama as a convenient place for celebrities, politicians, and wealthy people from all over the world to hide their illicit profits. The funny thing is that these assertions served more as misleading headlines than as factual statements.

The reality is that a law firm originally established in Panama (we all know the name) decided to branch out to over 50 jurisdictions and franchise its offshore services, allowing third parties to sell incorporated entities to high-end clients in all of these jurisdictions. Anyone who has researched the scandal would realize that from those 11.5 million documents leaked from that law firm’s database, only 20% of the entities involved were Panamanian in origin. Most were actually incorporated in the Bahamas, Seychelles, New Jersey, Andorra, Isle of Man… you get the point.

Another interesting fact to consider was that the funds involved in the scandal were not deposited in Panamanian banks. Panama’s strict and over-regulated banking policies do not actually make it easy for those who need swift, flexible offshore banking. Due to these and other issues, most of the entities involved in the scandal had to set up bank accounts in other jurisdictions, as well.

Nevertheless, these explanations will never be enough to undo some of the reputational damage the country has received. So, how is it that even in the aftermath of the Panama Papers scandal and all the constant back and forth grey-listing by other nations that Panama somehow still manages to be a desired destination for people and businesses to find a second or new home?

Panama's strategic geographical location that has benefited commerce and logistics-related business for over 500 years - together with a strong, secure international banking center that operates without a central bank and a stable democratically-elected government - has positioned Panama as an ideal hub for Latin America. In addition, the country welcomes people from all over the world who may opt to live in a modern high-rise apartment its cosmopolitan capital city, a quiet retreat in the mountains, or a paradisiacal beach community on its Pacific or Caribbean coast.

What should one consider when moving to Panama in terms of regulations?

As with any life-changing decision, relocating your family, your business, or both to a new destination requires a cool-headed plan, which starts by evaluating the available residency programs in the country of your choice and the level of complexity involved in applying and attaining permanent residency status for you and your family.

Any residency process in Panama may require at least two separate visits: one to file the initial residency application and obtain a temporary residency identification card and a second trip, three to four months later, to obtain your formal residency card. However, applicants may opt to stay in the country in-between visits, given that the applicant is no longer considered a tourist once the application has been filed and is not subject to tourism visa limitations.

In addition to your residency status, you should also consider how feasible it would be to sustain a living in your new country based on your current source of income. Panama prohibits the practice of certain professions by foreigners to protect its citizens, such as those related to the health industry, architecture, engineering, retail and legal fields. Labor is also regulated, and in order to “work” as a foreigner, you will need to apply for a work permit, as well. Nevertheless, those who are considering investing in their own start-ups may do so, even before the approval of their residency permit.

In terms of required documentation, applicants must have a passport valid for at least six months prior to its expiration date. In addition, a police report or criminal record report, with a nationwide validity in their country of origin or country of current residence, must be provided.

If the applicant will include dependents in their residency, additional documents proving their kinship or affinity, such as birth or marriage certificates, will be required. An applicant may include his or her spouse, children under 25 years of age, and the applicant’s parents in their residency status. All dependents of legal age (18 years or older) should provide their own police or criminal records, as well. All of these aforementioned documents should be authenticated for international purposes, either by the nearest Panamanian Consulate or by means of an Apostille stamp, and must be within six months of the date of issue at the time the residency application is submitted.

Depending on the type of residency program chosen, the applicant may be required to open a personal bank account in Panama, incorporate a Panamanian company, or formalize a particular type of investment.

Let’s review some of the most relevant and accessible Permanent Residency programs available in Panama.

What are the easiest ways to acquire a Permanent Residency in Panama?


Panama has three types of residency-by-investment programs, all of which first grant the applicant a two-year residency permit that can later be transformed into a permanent one, as long as the applicant proves they have maintained their investment in place at the moment of requesting permanent status.

If dependents are to be included in the application, all basic investment amounts must be increased by USD $2,000.00 per dependent.

Let’s briefly examine each one of the programs.

  1. Forestry or reforestation investment. This first program entails investing a minimum of USD $80,000.00 in a government-approved reforested lot. This lot must comply with several requirements in order to qualify for such approval, from its size of no less than five hectares to the type of plantation and even its maintenance and thinning process.

  2. Own business investment. In order to apply under this program, the applicant should own shares of a Panamanian company capitalized with at least USD $160,000.00, invested either in supplies, inventory, or infrastructure. This company must hire at least five Panamanian citizens at minimum wage. This has to be an operating company, with a physical address and the necessary licenses and permits to operate.

  3. Self-managed investment. Investing USD $300,000.00, either in real estate, a bank certificate of deposit, or a combination of these two will also grant the applicant a residency permit. For real estate, the required investment amount can be met by purchasing one or more residential or commercial properties. If a fixed-term deposit or certificate of deposit is included in the investment, the minimum length of the deposit must be at least three years.

As mentioned, all of the above programs will first grant the applicant and their dependents a temporary two-year residency permit, which can later be extended to a permanent one, as long as the applicants prove that they still have their investment in place.

Friendly Nations Program.

Panama offers a special permanent residency permit to applicants from over 50 different nationalities, who can demonstrate either a professional or business intent in the country. Such intent may be proven either by means of a labor contract between the applicant and a Panamanian company or by incorporating a Panamanian company, in which the applicant holds at least fifty percent of the issued shares.

Applicants will be required to set up a personal account at a local bank in Panama and deposit at least USD $5,000.00 as proof of economic solvency.

Citizens from North America, some countries from Latin America, such as Mexico, Costa Rica, Brazil, and Argentina, all nations of the European Union, the United Kingdom, Oceania, and a limited number of Asian countries are included in this list. Permanent residency is granted with the first application; hence, no renewal process needs to be considered.


One of Panama's original and most renowned residency programs is known as the Foreign Retiree Program, which is addressed to retirees and pensioners from any country without limitation, as long as the applicant can prove to be actively receiving a lifetime pension equivalent to or greater than USD $1,000.00 per month.

Applicants will also attain permanency with the first application, together with several tax benefits and discounts that range from restaurants and medicines, to plane tickets, utilities, and professional services. This is one of many reasons why Panama has been chosen for several years in a row as one of the top countries in the world in which to retire.

All of these residency permits may lead to a tax residency status first and eventually to citizenship.

Our consistent advice when it comes to these types of investments is to always hire legal representation from day ONE, guaranteeing you an uncomplicated, straightforward transaction.


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