| TABLE OF CONTENTS Connectivity Visas Types of Visas Visas for Retirees Benefits for Retirees Fiscal Residence Judicial Security Community Quality of Life |
Known for hosting one of the seven modern wonders of the world, the Panama Canal, the country has consistently worked on attracting hundreds of businessmen, retirees and companies who have taken advantage of the benefits that the State offers when settling here.
Learn about some of these benefits.
Yes, you have probably heard about that wonderful engineering project called the Panama Canal. A bioceanic pathway that literally revolutionized the international economy. It has always been the icon for which the country has been known for.
However, you are probably unaware about the cosmopolitan lifestyle that is present in the city. Panama has a growing stable economy, with a modern capital and ongoing nightlife 365 days per year, local and international gastronomical options that are creating a name worldwide in the main rankings and a series of exceptional conditions such as connectivity, weather and of course, the benefits that the country offers foreigners when they settle here.
Since the return of the Panama Canal to Panamamian management, the nation has developed a consistent policy of promotion and attraction of foreign investment. This has allowed it to make a quantum leap – as economic authorities have classified it around the world – in its development. So much so, that in 2018 Panama consolidated itself as the country with the best GDP per capita in Latin America.
Due to its privileged geographical position, the country has transformed into one of the most important business centers in the continent, with great tradition in areas such as banking, finance, services, logistics and commerce, which, along with political and economic stability, have placed it as one of the most attractive places for investment.
However, the most important aspect is: Panama has always welcomed with open arms those who wanted to come live here. The foreigner will always be well received. It is part of the Panamanian DNA.
Panama is more than the Canal and it has everything you need to ensure it becomes an ideal place to enjoy life. Discover some of the benefits the country has to offer.
1. Connectivity
Panama’s connectivity represents an important feature of competitiveness at a global level as well as an advantage capable of expressing and being measured by multiple focuses and dimensions.
Due to the characteristics that Panama holds, the latest technological and structural reforms have reinforced its predominant position in the continent. Such changes included projects like the widening of the Canal and Tocumen Airport, as well as diverse plans to democratize internet access.
According to information from pertinent sources in the United Nations Conference on Commerce and Development, Panama’s maritime trade is headed by the Asian continent as of 2019, with the Republic of China as its main representative.
Other international events highlight Panama’s standing regarding aerial connectivity, such as Panama Aviation Day, one of the most important conferences in the world about the industry. Tocumen Airport moves around 16 million passengers per year and connects the country to over 84 destinations worldwide, with almost daily flight frequency to the most important locations.
The measure for connectivity in a country constitutes a qualitative parameter subject to multiple variables. The most relevant of these is the index of connectivity and how it is stipulated in the World Economic Forum (WEF). The annual study that is completed by these statistical organizations involves a total field of 138 countries around the globe. Given its different technological and commercial contributions, Panama holds the 50th place in this ranking.
This position allows it to be categorized as a leader in connectivity in Latin America and the Caribbean. This prestige allows it to place before other Latin American powers such as Mexico, Argentina and Brazil.
Panama is hours away from any destination both North and South. A strategic advantage for any person that wishes to be close to the world either for business or pleasure.
2. Visas
Panama wants foreigners to be able to establish themselves comfortably, calmly and legally in the country, offering diverse visas that adjust to different needs.
Why choose Panama?
- Competitive residences in regards to costs and formalities compared to other countries.
- Attractive investment options for visitors.
- Different residential programs that grant provisional or indefinite residence, in some cases immediately.
- Competitive time lapse in residential approval.
- No minimum stay in Panama required throughout the year.
- Territorial tax regime
All of this from the need of the national government to offer the country as a product or platform that is attractive for investors coming from around the globe.
All you need to know about the types of visas in Panama: Main facts about the process and obtainment of the document
Generally speaking, there are a total of nineteen types of visas granted on a national level. The most relevant fact being that for the most part these fall under the category of permanent formalities, assisting the visitor according to their individual form of incorporation into the national economic system.
All these types of visas have a common element of an approval time period that spans between 6 to 8 months. All processes must be completed through a local lawyer.
With the exception of a few countries, most of the people that visit Panama are allowed a stay of up to 6 months. If the stay is extended past this time period it is necessary to request a safe passage or pay a fee.
Main types of Visas
Permanent Residence Permit by Economic Solvency
This visa is for foreigners looking to invest in the country with a minimum capital. A foreigner will be able to initiate any type of legal business, except for those reserved for nationals such as: lawyers, doctors or retail business.
Friendly Countries Visa
It is a reciprocity visa – where countries such as the United States, Canada and some European countries are included – that can be requested when a few basic requirements are met and that ensures resident access.
And if there is something that has been a public policy is the benefit for the retired person. For this reason, regardless of nationality, the retired person has a series of rights completely guaranteed.
Over the past ten years, Panama has led the rankings for quality of life for retirees and the elderly.
Retirement Visa
The Retirement Visa, also known as Pension, is one of the most coveted internationally. Especially given the opportunity that the Central American state offers to be included in the non active population within its productive, tourism and workforce.
There are multiple reasons for which this is a current product or opportunity. The initiative was born during the decade of the 80’s. Its permanency up until present time has been conditioned by the rise in residential tourism, very characteristic of the 1990’s and 2000’s.
Retirement Visa and all the required documents for its arrangement and procurement.
After obtaining a retirement visa, its owner will only be required to present or declare their monthly income. This must be active and has to possess a minimum of one thousand dollars monthly. Such a quantity requires to be declared under a retirement pension, always coming from a retirement agency or private business. The other requirements associated with the visa will depend on the nature or degree of association that the retiree has gained through his work life.
In general terms, the set of documents needed will be composed by civil requirements such as a passport as well as the document indicating retirement along with a certified income statement. A federal criminal record must also be included as well as health certificate and affidavit form. Lastly, the Proof of Address in Panama can only be effective by including documents such as service bills or a rent contract.
Its main benefits are the following:
- One time exemption from the mandated tax payment when purchasing home goods for up to $10,000 American dollars.
- 50% discount across the country in places of entertainment such as: Movie Theaters, Concert Halls, Sports Events, etc.
- 30% discount on Bus and Boat fees.
- 25% discount on airfare.
- 50% discount on hotel stays between Monday and Thursday.
- 30% discount on hotel stays between Friday and Sunday.
- 25% discount in restaurants.
- 15% discount in fast food restaurants.
- 15% discount on hospital bills (in cases where insurance does not apply).
- 10% discount on prescribed medicines.
- 20% discount on medical consults.
- 15% discount on vision and dental exams.
- 20% discount on professional or technical services.
- 50% discount on mortgage agreements.
- 25% discount on public service bills.
- 15% discount on loans under his or her name.
- 1% less in home mortgage for personal residence.
The Retirement Visa in Panama is also justified given the economic and environmental properties of the nation. First of all, its weather is extremely stable, defined by two main seasons however mostly devoid of significant tropical storms.
Economically, Panama is dollarized as well as also backed by low inflation rates and low unemployment rates.
3. The perfect place to establish a business
For over a century, Panama has been an important asset for commercial growth in the region and the world, far beyond the merchant or corporate point of view.
The different reforms also include the civilian area where any person that complies with the required characteristics can be incorporated into the national productive line and employ the rights that are granted to improve their quality of life and their international patrimonial planning.
a. Fiscal Residence in Panama
For years, Panama has promoted a series of public policies to attract foreign investment through laws that encourage legal security and protection for the investor and for all qualified professionals that wish to work in the country.
Additionally, Panama has been complying with the required regulations established by international organizations regarding taxing.
Even so, local legislation does not require tax reports for income generated outside of the country’s borders, thus its residents can minimize their income without breaking any laws.
By establishing their fiscal residence in the country, after the appropriate visa is approved, the foreigner immediately becomes a taxpayer.
This means that at the start of the “Principle of Territoriality” that the state operates, the resident will only pay taxes on income obtained within Panamanian territory.
Tax exemptions can be grouped in the following manner:
- Income generated through operations managed in Panama but held in the exterior.
- Income from rebilling for goods or external services.
- Dividend distribution derived from external income (including those mentioned above).
Panamanian banking has a well renowned reputation worldwide as one of the safest places, fulfilling all the required norms that international organizations have set.
Panamanian permanent residency documentation allows for exemptions in practically all personal income. The main exception is the United States; however, the first 160.000 USD will not be taxed.
This facilitates that a person constitutes a business under Panamanian fiscal residence and can manage it outside of the country, this way generating income outside of the territory and thus this capital would be exempt from paying taxes.
b. Societies
For years, Panama has created a series of public policies with the intention to attract foreign capital through laws that ensure legal security and protection for the investor and all qualified professionals looking to work here.
Panamanian law has multiple legal structures for businesses. The most used is “Anonymous Societies” due to their flexibility and easy maintenance both for local and international management.
One of the advantages that these societies offer is that they can engage in activities that are not tax deductible in the country.
Law 32 of 1927, which regulates Anonymous Societies in Panama, holds unique characteristics that are favorable for both nationals and foreign residents who need some form of legal figure to complete their commercial activities in the exterior.
Its functioning falls under the principle of the Social Pact in the Civil Registry, which states that it requires the participation of a shareholder, two Panamanian lawyers and a board of directors with at least three signers.
On a general level, the average time to open this type of society does not surpass six business days.
c. Legal Security and foreign investment promotion
Law 54 of July 22, 1998, states that foreign investors and companies in which these participate in have the same rights and obligations as nationals, without more limitations than those presented in the Constitution. However, the law is very clear in highlighting strategic areas in which only Panamanians can work.
Panama has worked hard to develop a unique ecosystem for business development. With the publication of Law 41 of 2007, which creates the special regime for the establishment and management of Multinational Corporation Headquarters and the Commission of Multinational Corporation Headquarters, new rules are established.
Today over 150 multinational corporations have established their headquarters in Panama, enjoying the regulatory and economic benefits as well as a strategic location and logistic development. Some of these companies include Procter and Gamble, Adidas, Halliburton, Dell, Bayer, Caterpillar, Bauer, Phillips, Nestle, and more.
d. Tax Benefits
From a legal point of view, Panama holds a total of 21 tax benefits. There is a wide variety included under this category.
All of this represents a totaled system that responds to social, political and public needs that the country has experienced throughout its recent history, marked by the constant goal of attracting foreign investment.
Furthermore, Special Economic Zones have been developed that help potentialize its strategic position and transform into the perfect platform for business development. Some of these areas are:
- City of Knowledge
- Panama Pacifico
- Processing Areas for exportation
- Colon Trade Free Zone
4. Discover the wonders beyond the city
Panama is not only a city. The amount of highly developed touristic areas have gained traction as a good evolution pattern. It is common to see expat communities in areas such as Cocle and Boquete where many of them have established their residences and their businesses.
Panama has developed a highly coveted real estate market. A modern city, first world tourism developments, and a wide range of opportunities for investors or foreigners to have the same benefits as the locals.
Just like some have decided to invest in permanent residences, there is another group of foreigners, who, taking advantage of the benefits that the country provides, aim for an investment such as a residential project through so called “residential tourisms”.
Developments such as Santa María, Buenaventura or Santa Mónica, are clear examples of projects based on high end amenities with an economic return within a medium range of time.
5. Quality of Life
Panama offers all the assurances needed to establish yourself here either in a permanent or temporal fashion. You get to choose. But one key aspect is yet to be mentioned: Quality of life.
International rankings such as those done by Mercer or other sources such as The Economist, include Panama City as one of the cities with the highest scores.
Amongst the endogenous variables, being far from the hurricane strip and the low reputation for natural disasters as well as overall safety in the streets.
A good education, good health, good infrastructure; Panama has it all. And due to the fact that it is a meeting point for multiple nationalities, you can find everything here.
In Panama golf is a way of life 365 days of the year, with world acclaimed courses. Within its 75.517 km² of territory, Panama holds 11 golf courses distributed between the city and the beach, allowing it to become one of the preferred destinations in the region. Green areas, places to discover and adventures. All of these circumstances have led to Panama becoming a priced destination for people from Canada and the United States, who come to enjoy everything the country has to offer.
Panama awaits you with open arms.
