Panama improves the conditions to qualify for Permanent Residence to Qualified Investors.
The Executive Decree No. 722 of October 15, 2020 reduces to USD 300,000 the amount necessary to invest in real estate in the country to qualify for this visa, in addition to opening other opportunities in the capital market and fixed terms.
With the aim of stimulating and invigorating different sectors of the economy -such as real estate and construction- the Government of Panama launched the Permanent Residence program for Economic Reasons for Qualified Investors.
The program sets the required investment amount for two years at USD 300,000 from foreign sources and free of real estate encumbrances to qualify for this visa. After 24 months, the amount will go up to $ 500,000.
In the event that the investment amount exceeds this amount, the surplus may be financed by a local bank through a mortgage loan. Investments may be made in projects already completed or through the incorporation of a trust that guarantees the purchase of real estate.
The decree also incorporates other investment modalities to qualify for this visa category.
The first is through the purchase of securities on the Panama Stock Exchange for a minimum amount of $500,000 and the establishment of fixed bank terms for a minimum of $ 750,000.
In both cases, the investments must have an impact on the national territory and must be kept here for a minimum of five years. Once the information has been validated by the corresponding authorities, the issuance of the visa will take 30 days.
One of the important changes introduced by the decree is that the program allows the investment to be made from abroad, carrying out the procedures through a local lawyer and finalizing the process once it enters the national territory through the Ministry’s of Commerce and Industries single investment window, in which the National Migration Service also participates.
Both authorities will watch over and ensure adequate controls so that the applicant complies with Panamanian security and immigration regulations.
Fiscal Residence in Panama
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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 makes it easier for a person to establish a business under Panamanian tax residence and to manage it from abroad, thus generating their income outside the territory and, therefore, this capital would be exempt from taxes.
