Panama is home to amazing white-sand beaches, tropical rainforest, diverse wildlife and the Panama canal. It also is home to one of the world’s best territorial taxation system. A system that has made it a famous financial center and tax haven, for better or worse. Thanks to the Friendly Nations visa, Panama is also becoming increasingly famous as a residency option. This guide covers how to acquire residency using this visa, how taxation works, how to open a bank account, the practicalities of relocating along with useful travel information.


The Friendly Nations visa is a fast track program to permanent residency offered to the citizens of a select number of “friendly” countries. Under the terms of the program, successful applicants are granted the right to live and work in the country with no time limit or restrictions. For those who qualify, it is one of the easiest programs out there and because of Panama’s taxation system, one of the most valuable. That is especially true for perpetual travelers as permanent residents of Panama are considered tax resident as long as they spend at least one day in the country every year.


Qualifying for residency

Qualifying for the Friendly Nations visa is simple: you must be the citizen of a friendly country and you must be able to demonstrate at least one tie to Panama. Such a tie can be a job offer, a real estate purchase or ownership of a Panama company. You must also be able to prove that you have at least 5000 USD in a Panama bank account and that you have a clean criminal record.

As the “friendly” countries, they are:
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.


Applying for residency

Before traveling to Panama, you will need to prepare a set of documents in your home country. Please note that if you intend to qualify by virtue or ownership of a Panama company, you should register said company before traveling to Panama (at least one month prior).
1. Criminal background check (certified by your local Panama embassy or consulate)
2. Two certified checks (for both the immigration fee and the deportation fee)
3. Personal sworn affidavit
4. Three passport photos
5. A written statement describing your ties to Panama

Once in Panama, you will need to pass a local medical examination and open a local bank account (in which you will deposit the 5000 USD). You will also need to fill in the application forms, make copies of your passport and your national ID card or driver’s license (if applicable). Once you have every document, your next step will be to apply for the visa itself. While it is possible to apply by yourself, I recommend hiring an immigration attorney as it will prevent you from making mistakes as well as save you time. The whole process can take up to a year to complete (when you apply, a one-year temporary residence permit will be issued to you). Physical presence in Panama is only required at the time the application is submitted and when it is time to collect the residence certificate.



After residing in Panama for five years, a permanent resident becomes eligible to apply for citizenship. It is important to note that most of those five years must have been spent in-country in order for the application to be successful. Other requirements include a decent knowledge of Spanish, the country’s history and its culture.


Immigration expert – Mata & Pitti

Mata & Pitti is a Panama law firm with more than 30 years of experience focused to an international clientele interested in the Offshore Legal Services that Panama provides to the world. Our areas of expertise are mainly related with; Incorporation of Panama Offshore Companies and Private Interest Foundations. Our Firm also specializes in Vessels and Yachts Registrations in Panama as well as Panama trademark registrations and migration law.


Panama is a territorial taxation country. As such, residents and non-residents alike are only subject to taxation on their locally-sourced income. In practice, this means that it is possible to live in Panama tax-free provided that best practice guidelines are followed and that a proper structure is in place. In most cases, this simply means registering a resident company abroad, keeping the proceeds from that company abroad and not engaging in any business in Panama.



A tax resident of Panama is an individual who has spent over 183 days in the country in a given tax year OR who has established permanent residence. Tax residents must file an annual tax return if they have any taxable income (not subject to withholding). The fiscal year is the calendar year. The income tax applies to income from employment, income from conducting business as well as investment income. The rates are progressive up to 25%. Capital gains are subject to a 10% tax.


Powerful tax strategies

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Panama is Latin America’s main financial center and banking hub. It would thus be normal to assume that opening an account would be straightforward but such an assumption would be dead wrong. Imagine Latin bureaucracy combined with due diligence requirements from hell and you would be closer to the truth. So much so that you should only consider banking in Panama if you also intend to apply for permanent residency.


Opening an account

While requirements vary from bank to bank, in most cases they are as follow (you should confirm with your bank of choice before traveling to Panama):
1. Your passport along with copies of every page.
2. A second ID is also often needed (with copies as well). A national ID card or driver’s license is fine.
3. Two bank reference letters. These need to be on official letterhead, signed by an officer and addressed specifically to the bank you are opening an account with.
4. Two professional reference letters. These can be from lawyers, government officials, doctors etc.
5. Copies of your last two income tax returns.
6. A proof of origin for the funds you are depositing with the bank.

Once you have prepared all due diligence documents, you will need to book an appointment with a bank officer who speaks English (unless you speak Spanish). At the appointment, you will be asked to present your due diligence documents along with the account opening deposit (bring it in cash, this will make things easier). During the appointment, do not forget to request access to the bank’s online banking facility. Also, I recommend applying for a credit card (a security deposit will be required). The reason why I recommend getting a credit card is that Panama debit cards then to be fee heavy and cannot always be used online. Typically, the account will be activated within 7-10 business days provided that the bank is happy with your documents.


If you are seriously thinking about relocating to Panama, you should first visit the country for a few weeks. You could go alone and plan your own visit but I recommend using a relocation service. Most offer relocation tours in which you not only get to visit the country but also meet other expats and experience what your life in Panama will be like. The main reason why I recommend the use of a relocation service, however, is so that you have an expert on hand during your visit to answer any questions you may have. If the visit is successful, your next step will be to start planning the relocation itself. Steps I recommend taking before the move include learning Spanish, setting up mail forwarding, setting up a VPN server and joining the expat communities in Panama. Members of Freedom Surfer’s Insiders Club should also announce their plans via Slack so that they can connect with members already in Panama. It is important to note that you should not start gathering your documents more than two months before the move as they need to be recent.


Not only is Panama a great residency option, it also is a great place to travel. It is blessed with natural diversity, year-round warm weather and amazing scenery. Panama’s main entryway is Panama City’s international airport, PTY. From there, one can easily reach the capital city (via taxi or bus) and other destinations around the country. It is also possible to enter the country overland from Costa Rica and as well as by sea. Once in-country, the best way to move around is by rental car or, if on a budget, bus. While most visitors can visit Panama visa-free for up to 180 days, I recommend having a look at the “Visa requirements for Panama” link below to confirm whether a visa is required or not for your passport.



Visa requirements for Panama
Panama on Wikivoyage
Official website of Panama’s tourism office


Where to stay

Panama City
Whether you are going to Panama to acquire a residency, register a business or open a bank account, it is very likely that you will end up spending at least a few days in the capital. All the important government offices are there as well as all the banks. My favorite place to stay is the Hilton Garden Inn. It is centrally located, is part of the Hilton family and is usually a real bargain. For those who would rather stay somewhere a bit more special, I recommend checking out the Sortis Hotel and the Waldorf Astoria. If you are on a budget, the Los Mostros Hostel is both very cheap a lot of fun.

Bocas Del Toro
Regardless of the reason why you are going to Panama, Bocas Del Toro should definitely feature on your itinerary. The island chain boasts some of the best surfing and diving spots in the world as well as a laid back lifestyle and excellent seafood. My favorite place to stay is the Tropical Suites. It is simply outstanding value. If you are looking for a unique experience, the Punta Caracol Acqua Lodge is the place to stay. Their overwater bungalows will make you feel as if you were in Polynesia. If on a budget, the Sun Havens Apartments is well located and good value for the money.