A few months ago, we posted an article about potential upcoming changes to Panama’s residency laws in the context of the elections. We wrote that article because we were getting tons of inquiries from people all over the world concerned that obtaining Panama residency may become more difficult (or more expensive) under a new government administration.
One anticipated change concerned the Qualified Investor Visa, which was slated to see an increase in the minimum real estate investment threshold from $300k to $500k (all monetary references in this article are to USD).
But in a delightful twist, yesterday President Mulino signed Executive Decree 193, ordering that the threshold for qualifying real estate investments will remain at $300k. This decision has been met with relief and enthusiasm, as it retains Panama’s allure as an accessible destination for global investors and residents.
Speculation About Changes to Panama’s Residency Laws
In the lead-up to the elections in July 2024, there was tons of buzz and conjecture about potential changes to Panama’s immigration laws. And since the elections, many have wondered how the new government might reshape policies that impact thousands looking to invest, relocate or settle in Panama.
We’ve been pretty optimistic about how the Mulino administration would approach immigration laws. But our optimism has mostly come from our expectation that this government would generally be more pragmatic than the last administration. Actually, President Mulino didn’t say a ton about his immigration policies during the campaign.
One specific change that was on many people’s radar was the Qualified Investor Visa (often called the Panama Golden Visa) program. That’s because a big change to the Panama Qualified Investor Visa program was already programmed long before the election of President Mulino and his administration. More specifically, the minimum investment amount to qualify based on a real estate investment was set to increase from $300k to $500k on October 15, 2024. Yet, with the stroke of a pen, President Mulino has altered the course, keeping the minimum investment threshold steady at $300k.
What is the Qualified Investor Visa?
When we explain the Panama residency options to a would-be client we divide them conceptually into:
- Visa programs that one can qualify for based on their circumstances.
For example, some people can qualify for Panama residency based on their lineage, the person with whom they are married, their university-level education, a job opportunity, or even the passport they hold. Panama’s famous Pensionado Visa also falls into this first category. - Visa programs that grant residency based on investment.
There are investor visas that grant short-term, long-term or permanent residency based on different types and levels of investment. And there are all different types of investment options.
The Qualified Investor Visa is the crème de la crème when it comes to investor visas. That’s because it offers a direct and expedited path to a permanent residence permit in Panama in just 30 days. It also isn’t restricted to specific passport holders. The primary requirement is a foreign investment (meaning the investment funds come from outside of Panama) that meets any one of the following criteria:
- A real estate property in Panama with an equity investment of at least $300,000.
- A purchase of securities in the Panama Stock Exchange for more than $500,000.
- A 5-year certificate of deposit (“CD” or “Time Deposit”) with a bank in Panama of at least $750,000.
But, as we said, the minimum investment threshold for a real estate investment was set to increase to $500k on October 15, 2024.
Why Was the Minimum Investment for Real Estate Increasing to $500k?
Well, it was always eventually meant to be set at $500k. The law was drafted to allow for a $750k in a fixed-term deposit (the “CD” option) or a $500k investment in the Stock Exchange or in real estate. But the law provided that a real estate investment of $300k would qualify for the first 2 years. That was set to expire in October 2022.
But then-President Nito Cortizo signed an Executive Decree No. 109 (October 13, 2022) extending the $300k real estate investment threshold for another two years. This was welcome news as the Panama economy was still recovering from the Covid-19 lockdowns.
So, now the 2-year extension was set to expire again on October 15, 2024. And this time it seemed like it was probably going to happen. In fact, there are several countries around thew world that maintain different types of golden visa programs, and the investment thresholds generally seem to be trending is upwards. And Panama is in relatively high demand at the moment when it comes to relocation.
What Are the Implications?
Yesterday, with the signing of Executive Decree No. 193, President Mulino has rewritten this narrative. Let’s talk about what this really means.
FIRST – it means that Panama will remain accessible for a whole lot of foreign investors and potential incoming residents. The real estate option is probably the most popular investment program within the Qualified Investor Visa.
That’s because:
- you get the opportunity for appreciation;
- many people who relocate to Panama will invest in Panama real estate anyway; and
- a $300k equity investment is accessible for a lot of people.
But the bump up to $500k was going to price a whole lot of people out of the market. With the threshold now cemented at $300k, a broader audience can explore the benefits of investing in Panama and seeking permanent resident status.
SECOND – the way President Mulino implemented this change is noteworthy. Unlike President Cortizo’s 2-year extension in 2022 – President Mulino appears to have drafted Executive Decree No. 193 in a way that amounts to a more permanent change to the legislation. In other words, the $300k real estate investment threshold was not just extended for any set period of time. Rather, that real estate investment threshold for the Golden Visa now appears to be established at $300k.
THIRD – this is sure to draw significant attention and optimism from the global community. Getting second residencies and even additional passports is very popular right now in lots of places around the world where things are getting a little weird. And this move is also a great indication that President Mulino understands and appreciates the value that foreign residents bring to Panama.
By the way, President Mulino has also said some things that seem to indicate that he wants to streamline the process to apply for Panamanian citizenship through naturalization. Let’s see if that comes to fruition.
Anything Else to Know?
Beyond maintaining the $300k threshold, President Mulino’s Executive Decree No. 193 introduces further clarity and flexibility for potential investors. Specifically, it provides detailed instructions for applying for Panama’s Golden Visa if the investment property is not yet delivered. This allows individuals to base their applications on a promissory purchase-sale agreement for a real estate investment in an upcoming project (often referred to as buying “pre-constructions”).
Additionally, the decree outlines how partners in a real estate venture can collectively apply for and qualify for the visa. These clarifications enhance accessibility and attractiveness, making it easier for collaborative investments.
Bottom Line?
President Mulino’s decision to maintain the real estate investment threshold at $300k is a game-changer for Panama’s attractiveness to international investors. This move promises long-term accessibility and signals a positive shift in Panama’s approach to welcoming global investors and residents. By preserving the threshold, the government extends an open invitation to those looking to call Panama home, ensuring the country remains a preferred destination for investment and residency.
If you have questions, comments or criticism about this article, then let us hear from you. You can write to us at info@theindependentlawyer.com.
