Tax residency in Panama: the definitive guide
The complete handbook to optimize your taxes, secure your assets, and start your new life in the financial hub of the Americas.
Panama tax calculator
Enter your annual income by category to get an accurate estimate of your tax burden in Panama, based on the principle of territorial taxation.
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Contact an expertDisclaimer: This calculator is for informational purposes only and does not constitute tax or legal advice. The calculations are based on standard tax rates and do not consider specific deductions or credits. The EUR/USD exchange rate used is approximate.
Guide contents
What is tax residency and why Panama?
Tax residency is the place where a person or company has their tax obligations. Choosing the right jurisdiction is one of the most important financial decisions you can make. Panama has established itself as a top-tier destination for establishing tax residency thanks to its stability, its dollarized economy, and, above all, its favorable tax system designed to attract global investment and talent.
“Establishing your tax residency in Panama is not an evasion strategy; it’s a smart optimization decision. It’s about legally structuring your finances to protect your assets and maximize your growth in a global economy.”
The key: the territoriality principle
The pillar of the Panamanian tax system is simple and powerful: only income generated within Panama’s borders is taxed. All income you earn from foreign sources is completely exempt from income tax. This is what makes it so attractive to investors, entrepreneurs, digital nomads, and remote professionals.
Main paths to obtain tax residency
Panama offers multiple immigration programs designed to attract specific profiles. These programs are your gateway to subsequently certifying your tax residency. Here are the most common ones:
| Feature | Friendly Nations | Qualified Investor | Pensioner / Retiree |
|---|---|---|---|
| Minimum Investment Required | Yes (Real Estate or Deposit) | Yes (From $300,000 USD) | No |
| Approval Time | Moderate (Months) | Fast (30 days) | Moderate (Months) |
| Passive Income Requirement | No | No | Yes (Lifetime pension) |
| Ideal For | Professionals & Entrepreneurs | Large Investors | Retirees |
🤝 Friendly Nations Visa
Designed for citizens of over 50 countries with economic ties to Panama. It requires a real estate investment or a fixed-term deposit to demonstrate economic solvency.
See Requirements💰 Qualified Investor Visa
A fast-track program to reside in Panama, granting permanent residency in just 30 days in exchange for a qualified investment (real estate, stock market, or banking).
Program Details🌴 Pensioner or Retiree Visa
Ideal for individuals receiving a lifetime monthly pension or retirement income. It requires no investment and offers numerous discounts and benefits throughout the country.
Learn About BenefitsYour residency process, simplified
Profile Analysis
We evaluate your nationality, income profile, and goals to determine the most suitable and efficient residency program for you.
Document Collection
We guide you in obtaining and legalizing all necessary documents, such as your passport, criminal background check, and certificates, ensuring they meet the requirements of the National Migration Service.
Application and Certification
Once you have obtained your migratory residency, we guide you through the process of applying for your tax residency certificate from the DGI, the final step to consolidate your status.
Key documentation for your application
Although each program has its specific requirements, most residency applications require a common set of documents. Preparing them correctly is essential for a smooth process.
- Valid passport: With at least six months of validity.
- Criminal background check certificate: Duly apostilled or legalized.
- Proof of economic solvency: Bank letters, account statements, or property titles.
- Marital status or birth certificates: If applying with dependents, they must be apostilled.
Frequently asked questions about tax residency
How long does it take to get tax residency in Panama?
The process varies depending on the chosen residency path. Programs like the Friendly Nations Visa can be relatively fast, with initial approvals in a few months. It is crucial to have all documentation in order to avoid delays. Our advisors can give you an estimate based on your specific case.
Do I need to live in Panama year-round to maintain my tax residency?
Panama is flexible regarding physical presence requirements compared to other jurisdictions. However, to establish and maintain tax residency credibly, it is recommended to spend a substantial amount of time in the country. Specific requirements may vary, so proper planning is important.
Can I include my family in my residency application?
Yes, most residency programs in Panama allow for the inclusion of direct dependents, such as spouses and children. Additional documentation will be required for each family member, such as duly legalized marriage and birth certificates.
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