Panama is a popular destination for those seeking a second residency in a country that offers political and economic stability, affordability and access to modern amenities. Panama checks numerous aesthetics boxes, with an impressive, cosmopolitan capital city set against a backdrop of diverse, stunning landscapes. And our dollar-based economy and territorial tax system coupled with a strategic location in the heart of the Western Hemisphere makes Panama a relevant option for anyone doing business in the Americas.
Panama also offers considerable upside opportunity for global investors with many different types of investment options. And when it comes to Panama residency, foreign investors have a fairly extensive menu of options to obtain legal residence in Panama. This article will give an overview of some of the most popular Panama investor visa programs for those looking to match their residency strategy with business opportunities.
Choosing a Residency Strategy
If you approach us as a potential client to pursue residency in Panama, then during the initial consultation we will often start by trying to understand a little bit more about your background and plans in Panama. We aren’t just being nosey, and these questions aren’t meant to just be an ice-breaker. The reason we ask these kinds of interview questions is that conceptually, we divide the different residency visa options into two categories:
The first category consists of visa programs that one can qualify for based on their circumstances. Some people can qualify for Panama residency based on their lineage, the person with whom they are married, their university-level education, or even the passport they are holding. For example, Panama’s famous Pensionado Visa also falls into this first category.
The second category is made up of the visas that provide residency based on investment. And for these, what matters is the type, timing and amount of the anticipated investment. Let’s take a high-level look at some of the residency programs in this second category, focusing on what we like (and dislike) most about each of them.
This article will focus specifically on the investment visas. We will categorize them into 3 groups, listing them in ascending order by the level of required minimum investment amount in USD. Here is a table of contents in case you’d like to jump to any particular residency visa on the list:
Entry-level Visas that offer a temporary residence permit:
Mid-range Visas that offer a 2-year residency, with an option to then apply for permanent residency:
- US$100,000 – Reforestation Visa
- US$160,000 – Macro-Business Investor Visa
- US$200,000 – Friendly Nations Visa for Investors
- US$300,000 – Self-Economic Solvency Visa
Top-shelf Visas that offer a direct path to permanent residency:
- US$350,000 – Reforestation Visa
- US$500,000 – Qualified Investors Visa (Real Estate / Panama Stock Exchange)
- US$750,000 – Qualified Investors Visa (Fixed-Term Deposit)
Ok, hopefully we’ve thrown in enough key words for Google to find this article interesting. Let’s get started with the list:
Entry-Level Investment Visas for < US$100,000
Panama offers a few residency options based on five-figure investments (below US$100,000). Some of the ones we work with include:
US$60,000 – Agricultural Investor Visa
This one grants a 2-year residency (renewable for up to 6 years) based on an investment in a qualifying agricultural project. The applicant can hold the investment in his/her own name or in the name of a corporate entity, such as an S.A. company. The applicant can also apply with a dependent spouse and/or minor children by increasing the investment by US$500 per dependent.
This one does not offer a path to permanent residency. However, it is a much smaller ticket than the other investment visas, making it a nice entry-level investment visa for someone who wants to spend some time in Panama before making a major real estate or other type of local investment.
This may also be an interesting option for someone who is eventually planning to qualify for the Pensionado Visa, but who hasn’t started receiving their Social Security, Canada Pension Plan or other retirement benefits just yet.
We also like that this type of investment is in production, meaning that it lends itself to the type of investment that can give a reliable return. For example, we know of one project just a couple of hours outside of Panama City that offers the chance to acquire farmland with an immediate leaseback for an 8% per annum return. Or, you can invest directly in their ongoing lime production, which is current generating returns approaching 12% per annum.
US$80,000 – Reforestation Visa
There are actually 3 different versions of the Reforestation Visa, based on an escalating scale of investment. The entry-level Reforestation Visa requires just a US$80,000 investment in a qualifying reforestation project. The applicant can hold the investment in his/her own name or in the name of a corporate entity, such as an S.A. company. And like the Agrarian Investor Visa, this one grants a 2-year residency (renewable for up to 6 years).
We like this one for some of the same reasons we like the Agrarian Investor Visa. It offers a chance to get your feet wet in Panama with a lower-ticket investment. But this one is +30% more expensive than the Agrarian Investor Visa. And while it allows you to apply with dependents (again, like the Agrarian Investor Visa), this one requires you to increase your investment by US$2,000 per dependent.
Mid-Range Investor Visas between US$100,000 – US$300,000
This next group does offer a path to permanent residency in Panama – albeit an indirect path to permanent residency. Each of these initially grants a 2-year residency, but qualifying applicants are then able to apply for permanent residency so long as they still meet the requirements.
US$100,000 – Reforestation Visa
This one works just like the US$80k Reforestation Visa. But by increasing the investment to US$100k (held in the investor’s own name or through a company), the investor can place him/herself on a path toward permanent residency. Add US$2,000 for each dependent.
In our opinion, this one seems more worth-while than the entry-level Panama reforestation visa . If you are going to invest US$80k in a temporary residency, then why not increase it by 25% to be able to pursue permanent residency?
US$160,000 – Macro-Business Investor Visa
This is potentially an interesting one that not many people seem to know about. The investment requirement is US$160,000 in the capital stock of an operational Panamanian company.
There are additional, more precise requirements as well. The investor must be both a shareholder and an officer (President, Secretary, Treasurer) in the company. And the company should hire at least 5 Panamanians as employees. The investor also needs to prepare a business plan and include it in the applicaion package.
I think the reason the Macro-Business Investor Visa doesn’t get much attention is that it sort of puts the cart before the horse. Practically speaking, an entrepreneur who is starting an active business in Panama, hiring employees, etc., probably already has some ties to Panama. If he/she is a foreigner, then more often than not the residency question would have already come up before they pulled the trigger on launching a business.
Still, under certain circumstances, this one may be a relevant consideration.
US$200,000 – Friendly Nations Visa for Investors
The Friendly Nations Visa for Investors is, by far, one of the most popular residency visas that we process for our clients. It offers a path eventually to permanent residency for passport holders from well 56 different countries designated as having “friendly” diplomatic relations with Panama. On that list, you’ll find Canada, the United States, Israel, South Africa, and most of the Western European countries (among many others).
The main requirement is a minimum investment of at least USD 200,000 in real estate in Panama or a 3-year time deposit (a “certificate of deposit” or “CD”) at a local bank. The investment does not have to be all-equity (it can be financed by a bank), and you can hold the investment in your name or in the name of a corporation.
If you are applying based on a real estate property purchase, then the property title needs to have transferred to you (or to your corporation). You can’t apply prior to closing, based on a promissory purchase-sale agreement. And you’ll need to hold the investment long enough to apply for your permanent residence status after the initial 2-year residency.
The investment threshold doesn’t increase for a spouse or dependent children, but you will need to open a bank account in Panama in order to provide a bank reference letter as part of your application package.
US$300,000 – Self-Economic Solvency Visa
This one is a lot like the Friendly Nations Visa for Investors, but it is not limited to passport holders from specific countries. And the investment threshold increases to US$300k – again, in Panama real estate or in a 3-year fixed-term deposit at a local bank.
Another key difference is that to qualify for the Self-Economic Solvency Visa, the US$300k investment has to be all-equity. And you need to provide bank statements showing US$300k in new money actually coming into Panama by wire transfer.
Just like the Friendly Nations Visa for Investors, this one initially grants a 2-year residency, but then you’ll be eligible to apply for permanent residency so long as you still meet the requirements. This one does allow you to mix and match a real estate investment with a CD. So, if you already bought a US$250k property, then you could make up the difference with a $50k CD. And interest rates are pretty good right now.
And like the Friendly Nations Visa for Investors, when applying with dependents the main applicant will need to provide a reference letter from a local bank in Panama. But the US$300k investment threshold also increases by US$2,000 for each dependent.
Top-shelf Investor Visas > US$300,000
The main thing to note about this last group of investor visas is that they all offer a direct path to permanent resident status in Panama.
US$350,000 – Reforestation Visa
This one works just like the US$80k and US$100k Reforestation Visas. But with a US$350k investment in a qualifying reforestation project, the investor can apply for permanent residency right away. And, once again, the investor can invest in his/her own name, or through a company. And the investment threshold increases by US$2,000 for each dependent.
A lot of people approach us about the reforestation visa, because they are interested in a socially-conscious investment that will make a positive impact in the local economy and the environment. But the actual qualifying investment opportunities that people find could be something like a teak plantation, which may or may not fit squarely into their philanthropic aims. And if they are looking for a return on investment, then they may prefer to invest in something like real estate with greater perceived upside potential, or a fixed-term deposit with a shorter investment horizon. US$350k is a lot of money, and the US$100k would ultimately get you to the same result.
Still – investors who find a qualifying project that meets your needs (or if you are planning to execute your own reforestation project), then this may be one worth considering.
US$500,000 – Qualified Investors Visa (Real Estate / Panama Stock Exchange)
Often referred to as Panama’s “Golden Visa”, Panama’s Qualified Investor Visa one is the crème de la crème when it comes to investor visas. That’s because it offers a direct and expedited path to permanent residency in Panama based on an investment that a lot of people were going to make anyway.
Actually, we should clarify that we are referring to the real estate investment, which is a far more popular way to qualify than a substantial securities investment in the Panama Stock exchange. There are a couple of important things to note when applying for the Golden Visa based on a real estate investment:
- Most important – as of the writing of this article, the required investment in real estate is just US$300,000. But that investment threshold is set to increase to US$500,000 in October of 2024.
UPDATE – 16 OCTOBER 2024
Yesterday, President Mulino signed Executive Decree No. 193 ordering that the threshold for qualifying real estate investments will remain at $300k. You can read about it here.
But needless to say, this is fantastic news for anyone considering the Qualified Investor Visa, and it is great news for Panama! - Like the Self-Economic Solvency Visa, the investment threshold has to be met entirely with equity. To clarify, if you own a US$400k property with a bank loan, then you may qualify for the Golden Visa (at least until October of 2024) so long as you can show that you invested at least US$300k of your own equity into the acquisition. And you will need to show where that US$300k in new money came into Panama as a foreign investment from abroad.
- You can hold the investment in your name, or in the name of a corporation.
- You can apply prior to taking title, based on a promissory purchase-sale agreement. But you need to show that you meet the equity investment requirement by having the full required equity sitting in Panama in trust with a local licensed bank.
- The investment has to be held for at least 5 years. Actually, this applies to a real estate investment or a securities investment in the Panama Stock Exchange.
The Panama Qualified Investor Visa involves a more expensive application process than all of the other investment visas, because it involves more pretty hefty government fees than any other residency application. But while most Visa applications take around 6 months to process, the Golden Visa offers an expedited process of just 30 days.
US$750,000 – Qualified Investors Visa (Fixed-Term Deposit)
This is just another version of the Golden Visa program, but with a bank deposit as a 5-year “CD” with a local bank. But it offers the same immediate permanent residency via an expedited application process.
When it comes to the Qualified Investor Program, this route has been far less popular than the real estate investment option – mainly because the investment threshold of US$750k is more than double the current US$300k real estate investment requirement. But this could change now that the threshold for a real estate investment is increasing to US$500k in October of this year. A lot of people are afraid of getting stuck with a real estate investment, since there is some risk of not being able to time your exit the way you want. A certificate of deposit with a bank offers a more predictable return and investment horizon.
Bottom Line?
If you research Panama residency, you’ll find that Panama has a ton of residency visa options. So, when we have an introductory call with a new client, we usually ask them some questions to try to understand a little more about their circumstances and plans in Panama. This is to understand whether they may qualify for residency based on their current circumstances, or whether they paln to make an investment that would allow them to qualify for residency via one of the investor visa programs.
If you are investing in farm production, reforestation, real estate, a certificate of deposit with a local bank, or even the Panama Stock Exchange – then there may be a visa for you. The ones on this list start at just US$60,000 and go up to US$750k. The main question is how (and how much) you are planning to invest, and whether you are looking for short-term or permanent residency.
By the way, this article is full of links to more in-depth explorations of many of these visa options. And if you are planning to qualify for any of these residency visas based on a real estate investment, then be sure to book-mark this article about How Does a Real Estate Transaction in Panama Work?
If you have any questions or comments about anything you’ve read here, then we’d love to hear from you. You can reach us by email at info@theindependentlawyer.com.
