In these wacky and uncertain times, many around the globe are contemplating leaving their home countries for a new and better place to call home. This post gives you some great reasons to move to Panama, what you should know before you go, and helpful tips on what to know after you’ve moved.
Reasons to Move to Panama in 2017
Panama is affordable. Of course, your cost of living greatly depends on how large you live, but day-to-day life on a budget is generally less expensive than in the U.S., Canada, or Western Europe. Food costs are low, especially local produce, as are public transportation and taxi prices. Labor costs are cheaper allowing many to be able to afford housekeepers, gardeners, and other hired help. Affordable housing and real estate “deals” can still be found in the city, coastal areas, and other rural parts of Panama. Additionally, property taxes are lower than the U.S. and Canada, ranging from low to non-existent depending on government incentives.
Panama is sunny and warm. The tropical climate provides sun and warmth year-round with temperatures at sea level between mid-70s and high-80s. In the higher elevations, the temperatures can cool down a bit, but rest assured you will never again have to shovel snow off your drive! Also, because of Panama’s location, hurricanes are not an issue either.
Panama has great health care. In Panama City you have access to medical and dental care equal to U.S. standards, at a fraction of the U.S. cost. There are three high quality hospitals in Panama City, and one, Hospital Punta Pacifica, is affiliated with Johns Hopkins in Baltimore, Maryland. Although certain specialists can be harder to find (Panama has a population of fewer than 4 million people, or roughly the same population as Oklahoma), most medical conditions are treated by qualified doctors who are well equipped to treat you and your loved ones with a high level of quality and care. Many doctors have been schooled in the U.S. as well.
Panama is accessible. Panama City’s airport is a world class multinational transportation hub. You can easily travel to the U.S., Canada, and other destinations on a wide variety of airlines. Flights between Miami and Panama are under three hours, only five hours to New York, and a seven-hour flight to Los Angeles. Flights to Mexico, Colombia, and the Caribbean are under two hours. Plus, because Panama splits the year between the Eastern and Central US time zones, jet lag is never a serious problem. So, you are never more than half a days travel from most places in the continental U.S. or Latin America. In addition to Panama’s convenient proximity to the States, the exchange rate is easy. The U.S. dollar is the official currency in Panama!
Panama is full of adventure. Despite being a small country, Panama is full of a diverse mix of people, places and activities. From islands and beaches to mountains and rainforests, Panama offers a variety of beautiful places, ranging from modern and cosmopolitan to simple and rural. If learning Spanish is something you’ve always wanted to do, you can easily immerse yourself in the language with locals who are (for the most part) kind hearted, patient and hospitable.
Things to know before you move to Panama
Before you move you should take time to meet with an immigration lawyer about different visas available and other residency requirements. Also try to find a competent accountant who understands international tax implications. Below is some (hopefully) helpful general information about different visa options and tax information.
Panama Tourist Visa 2017
Panama is not as strict as other countries when it comes to immigration policies. Many expats live in Panama without obtaining permanent residency, though new enforcement of immigration policy is putting an end to this practice. If your plan is to move to Panama with minimal commitment and see how things will shake out, the tourist visa will allow you to stay in the country for 180 days (six months) with only a passport and a stamp upon entry. Essentially, the entry stamp on your passport is your tourist visa. If you really want to get technical, by law, tourist visas are only valid for 90 days but by executive order they are automatically extended to 180 days.
*Update: As of March 6, 2017, Panamanian authorities have starting to crack down on permanent tourists. According to guidance from the US and Canadian embassies, immigration officials have been instructed to be stricter about the enforcement of the regulation that foreigners entering Panama with tourist status prove that they are in fact entering Panama as tourists and not residing in Panama. In some cases officials are requiring that tourists with expired visas need to leave Panama for a minimum of 30 days before reentering as a tourist. To comply with immigration rules make sure you have proof of a return ticket to your host country and that you are financially viable by showing a bank (or ATM) statement that shows you have more than $500. This situation is still fluid and we will update this post when more concrete information is available. IF you’re looking to reside in Panama for longer than six months, you can skip to the other visa options.
For a tourist visa, passports from the US, Canada, and most Western European countries need to be valid for at least three months beyond your intended stay. Additionally, you must present a departure ticket from Panama. The departure ticket needs to be within the 180 days covered by your tourist visa. Your departure ticket can be for a plane, bus or boat. If you’re flying one way to Panama, most likely the airline check-in representative will ask you to show your departure ticket. If you’re traveling by land across the Panama-Costa Rica border, a customs official will ask.
Tourist visa holders can rent and own property in Panama, but cannot work. With this type of visa you can drive with your international driver’s licence but only for the first 90 days. Be aware of this fact if you plan on driving a car. The authorities set up checkpoints on the roads all over Panama, and if you’re caught you could face a big fine.
Panama Pensionado Visa 2017
One reason Panama tops lists for the best place to retire is the Pensionado visa. It provides fantastic benefits to retirees and grants immediate permanent residence. If you qualify for the Pensioner Visa, you are entitled to a one-time tax free exemption to import up to US$10,000 of household goods, and will receive a tax exemption every 2 years on the import of a car. The visa also provides discounts on many things including airline tickets, restaurants, energy bills, entertainment, doctor bills, and much more. (Note: any Panamanian citizen or permanent resident who is eligible for Jubilado status (age 55 for women and 60 for men) are entitled to the same discounts as those with a Pensionado visa (except for the import benefits). If you receive permanent residency through another visa, and meet the age requirements, you will still receive most of the benefits.)
To qualify, you must draw a pension of at least US$1,000 per month, and an additional US$250 for each dependent. The annuity or pension can be paid by a private company, military, government agencies, corporation, bank, insurance company, or a trust. If your monthly lifetime income for a pension is less than US$1,000, but greater than US$750, you may be able to qualify by purchasing a property of at least US$100,000, which reduces the monthly lifetime requirement to a minimum of US$750.
The minimum age is 18 and there is no maximum age to qualify, so if you receive a lifetime pension early (through Social Security Disability, for example), you can apply for a Pensionado Visa. Pensionados are granted permanent residency for as long as they call Panama their home and are protected from any future changes in the law. Like a tourist visa, someone with a Pensionado visa cannot work in Panama but can rent and own property.
Friendly Nations Visa 2017
The fastest path to permanent residency in Panama is the Friendly Nations Visa. If you are a citizen of any of the 50 countries that Panama considers “Friends of Panama”, you and your direct relatives can apply for immediate permanent residency. Direct relatives include a spouse and children up to 18 years of age or 25 if they are full time students.
The 50 Friendly Nations
There are now 50 countries listed as friendly in the ever expanding list of countries Panama considers as qualifying for this visa. Here they are, in alphabetical order.
Andorra, Argentina, Australia, Austria, Belgium, Brazil, Canada, Chile, Costa Rica, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hong Kong, Hungary, Ireland, Israel, Japan, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Mexico, Monaco, Marino, Montenegro, Netherlands, New Zealand, Norway, Paraguay, Poland, Portugal, Serbia, Singapore, Slovakia, Spain, South Africa, South Korea, Sweden, Switzerland, Taiwan, United States of America, Uruguay, United Kingdom (Great Britain & Northern Ireland).
To qualify, you must open a Panamanian bank account with a minimum balance of US$5,000 (and US$2,000 for every dependent), and either open a new company or buy an existing business in Panama. You can also find employment in “any professional services company in Panama”, but you will need proof of employment when you apply. Talk to an attorney about the specifics of starting a company in Panama or what requirements you would need to meet to work for a Panamanian company.
Panama Professional Employment Visa 2017
As a foreigner, you need a work permit to be employed in Panama, and you cannot be hired for a job without legal status. Panamanian companies can hire a limited number of foreign workers (maximum of 10% of their workforce), and if you receive a job offer, you will be eligible to apply for a work permit. The company will need to be able to prove that the work you provide cannot be done by a qualified Panamanian and certain professions are restricted for only Panamanian citizens like; architects, attorneys, engineers, and medical & veterinary doctors.
To apply for a Professional Employment Visa you must have a university education and proof of any professional license needed from your home country. After two years as a temporary resident, permanent residency is usually granted, but, unlike other visas, you must make two applications two years apart to qualify. When filing the final application, applicants must show that they have been employed in Panama for the last nine months and have been paying local social security.
Self Economic Solvency Visa
Panama’s Self Economic Solvency Visa requires a US$300,000 investment. This visa has 3 options in order to qualify. The first option is to invest a minimum of US$300,000 in a Panama bank CD for a minimum of 3 years. For dependents, you must invest an additional US$2,000 for each.
The 2nd option is to invest at least US$300,000 into titled Panama real estate. This must be cash equity, as the loan amount from a mortgage does not qualify. An additional US$2,000 must be invested for each dependent. Keep in mind that you will still need to provide proof that you will be able to support yourself and your family.
The 3rd option is a combination of the other two options. A minimum total of US$300,000 can be invested in Panama real estate and a Panama bank CD. Again, an additional US$2,000 must be invested for every dependent.
Panama Investor Visas 2017
Three types of visas allow you to invest in different types of businesses in Panama:
- Reforestation Investor Visa: As the name implies, to qualify for this visa you must invest in a government certified teak or mahogany reforestation project. Various reforestation companies offer a turn-key package that includes the land purchase contract of at least 5 hectares of timbered land, a management contract, and legal fees required to process the visa. By investing US$80,000 or more in a reforestation project, you will be able to apply for a Permanent Residency Visa for you and your family (again, an additional US$2,000 for each dependent). After 5 years as permanent residents, investors can apply for Panamanian citizenship.
- Business Investor Visa: A minimum US$160,000 investment in capital stock of a Panamanian corporation will qualify you for this visa. The investor can be a shareholder and/or an officer, and the business must employ at least 5 local employees. An additional US$2,000 must be invested for each dependent.
- Agriculture Investor Visa: Foreigners can become temporary Panama residents by investing in Panama aquaculture, farms, or agriculture with a minimum investment of US$60,000. The aquaculture or agriculture business must be deemed by the Department of Farm Development to be in the national interest of Panama. The maximum period for temporary residency under the Panama Agriculture Investor Visa is six years with the temporary residency permits being extended every two years. This investment program does not provide Panama permanent residency or Panama citizenship. Each dependent requires an additional US$500 investment.
If none of these options sound good to you, your only other options are to marry a Panamanian citizen and/or have your baby in Panama. If you go this route, your marriage must be legal and can’t be a sham, of course. And if you do have a child in Panama, as parents you can apply for a permanent visa when the child is over five years old.
Panama Tax Implications 2017
In addition to residency and visa requirements you should make yourself aware of your home country’s tax implications before you move to Panama. For example, you may leave the United States, but the US won’t necessarily leave you. Even if you reside overseas, the IRS will still insist that you keep filing tax returns. It doesn’t matter that you don’t live in the U.S. any more, don’t have any income or assets there, or don’t visit. If you’re still a citizen, the U.S. will tax you on your worldwide income.
The IRS does offer a Foreign Earned Income Exclusion. This allows U.S. citizens who live abroad for more than 330 days a year to exclude a certain amount of earned income (not passive income) paid outside the U.S. (somewhere around US$100,000).
Just as you should consult with an immigration lawyer about visas and residency requirements, you should also talk to a qualified accountant to understand what your financial tax consequences might be.
Things to know once in Panama
Carrying ID in Panama
If you’ve come to Panama on a Tourist Visa, the first thing you should do is make a copy of your passport and entry stamp and carry it with you always. You probably won’t need to show it, but it will save you enormous amounts of time, energy, and hassle from the police if you do.
Opening a Panama Bank Account 2017
To open a bank account in Panama you will need a copy of your passport photo and information page, as well as a copy of your Panama immigration entry stamp page. You will also need at least one letter of reference from a bank and a reference letter from a professional (lawyer, accountant). These letters must be on the company or bank’s letterhead addressed to the Panama bank and signed by a manager or high authority. All documents must be recently dated (usually within three months). You will also need a second ID, such as a driver’s license.
Different banks may require more information; such as the source of funds you intend to deposit. Every bank has its own application forms. If you are in Panama on an immigration visa, you will need to provide copies of the immigration visa and immigration identity card (carnet). If a business account is being opened, most banks will require copies of your income tax returns from the previous two years. Plus, all documents must be translated into Spanish.
Getting a Panama Driver’s License 2017
Your driver’s license from your home country is valid for driving in Panama for 90 days. If you are stopped during that time just show your valid license from another country, your passport, and your entry stamp that is less than 90 days old. If you’re a Panamanian resident or a tourist who is past your initial 90 days, you must obtain a Panamanian driver’s license.
Getting a license is a bit of a hassle, but not hard to do. First, you’ll have to go to your embassy and have them certify that yours is a true and valid copy of your driver’s license. Your embassy should have the paperwork required to apply for a driver’s license. Next you will go to a certified clinic to take a blood test (unless your license has your blood type on it), then you go to SERTRACEN (the private company that issues the driver’s license) where you’ll take a vision and hearing test. If you have presented your original license from your home country, a driving test is not required. If you have all the proper paperwork and pass the test, it should take about an hour to process your driver’s license and cost $40.
Choosing a Panama Cell Phone
If you have your own phone and it is not locked to a specific network, you just need to buy a SIM card. If it is locked, a local electronic store can unlock it for about $15. You can then buy the SIM card in any part of the country from a mobile service provider for less than $5.
The three main providers in Panama are + Movil / Cable & Wireless, Movistar and Digicel. Once you have chosen your provider (each provider’s coverage differs around the county), you will have to choose between a prepaid service or a postpaid contract. If you choose prepaid, you will simply buy a card (usually from $5 to $40), enter the code into your phone, and receive your minutes. The more you pay for the card, the less you pay per minute on your calls.
Contract plans vary between $10 to $200 depending on your personal use, and some come with options such as free calls to some phone numbers and Internet access. As many people do, you can also opt to purchase a contract plan just for unlimited Internet access, especially if you have a BlackBerry or iPhone, and use a prepaid service for your calls. To give you an idea, local calls can be as low as 10 cents per minute, and incoming calls are free.
WHATSAPP is also a great app to have. It’s free to download and you will be able to call, text and send voice messages locally and internationally for free using wifi. Just make sure your friends and family also have WhatsApp on their phone, too. Nearly all Panamanians use WhatApp.
Connecting Panama Utilities and Water
To connect your utilities and water you must be able to present a lease or title to a home or apartment (condo) along with your passport. You must appear in person at Union Fenosa (electric company) and IDAAN (water department) to make an appointment to have the services installed and turned on.
Receiving Mail and Packages in Panama
Panama does not have traditional street addresses so there is no door to door mail delivery. Most neighborhoods in Panama City don’t even have numbers on houses or apartment buildings and there is no Zip Code system, which confuses U.S. shippers. Most people residing in Panama rent a box at the local Panama Post Office, but this system is not always reliable and mail can occasionally get lost or misplaced.
If you order online from out of the country and want something more reliable than the Panama Post Office, there are many private companies that offer mail forwarding services. These companies will set up a mailing address for you in Miami where you can send your packages. From there, the company will ship it to their offices in Panama where you can receive the packages. You pay by the weight of the package, usually between $3-$5 per pound. Some companies also charge a monthly fee to maintain your box, while others only charge by weight. Packages usually take about 3 business days to arrive in Panama, after departing Miami.