Panama Country Profile

Passport
For more details visit Panama Passport Ranking
  • Passport Grade
    B
  • Passport Ranking
    61/198
  • Passport Score
    138.5/198
  • Visa-free Countries
    125
  • Visa-required Countries
    73
  • Access to the World's GDP
    40%
  • Access to the World's Surface Area
    45%
  • Access to the World's Population
    36%
  • Access to the Unesco Sites
    71%
Citizenship and Naturalization
Birthright citizenship (Jus Soli)
  • Birthright citizenship (Jus Soli)
    Yes
    Unrestricted: Any child born in the country automatically becomes a citizen.
Naturalization - Standard Conditions
  • Minimum residency period
    5 years
  • Physical presence requirement
    Officially, need to visit the country every 2 years to keep permanent residency active. In reality, better to spend significant time on the ground
  • Language test
    Yes, Spanish
  • Need to renounce original citizenship?
    Yes, but not enforced
  • Can minor children naturalize?
    Yes
  • Can naturalized parents pass citizenship to a child born abroad?
    Yes
    A child can become Panamanian by birth, after establishing domicile in Panama and submitting an application before turning 19
  • Can you lose naturalization due to prolonged absence/ naturalization elsewhere?
    No / Yes
Naturalization - Your Spouse is a Citizen
  • Living IN the country: Residency/marriage requirement
    3 years / 3 years
    Must be both married and reside in the country for 3 years.
  • Living ABROAD: Marriage requirement
    Not allowed
  • Language test
    Yes, Spanish
  • Need to renounce original citizenship?
    Yes, but not enforced.
Naturalization - Other Beneficial Provisions
  • Your child is a citizen
    3 years
    May apply immediately after having a child with a Panamanian citizen or giving birth in Panama (jus soli), assuming you have resided there for 3 years.
  • Citizens of specific countries
    1/2/3 years
    Based on resiprocity rules: 1 year for citizens of Colombia, El Salvador. 2 year for citizens of Argentina, Ecuador, Honduras, Mexico, Nicaragua, Peru, Spain. 3 year for citizens of Uruguay.
"–": The provision has not been analysed.
Taxation
For more details visit Cost of Living
  • Taxation Type
    Territorial
A tax resident of a country with a TERRITORIAL tax system pays taxes on the income generated within the country only. Income generated outside of the country remains tax-free.
Schiff Sovereign's Take on Panama
Our founder, Simon Black, used to spend significant amounts of time in Panama. He started going there in the early 2000s. 

Back then, the only positive thing you could say about the country was that you could drink tap water safely. Otherwise, it was very much a backwater type of place.

Today, Panama is an entirely different country. Its GDP grew fivefold. Panama City’s skyline reminds one of Hong Kong. The changes over the past couple of decades have been simply remarkable.

The country is profoundly pro-business. Revenues from the Panama canal have also been a major boon for the country,

The country has also received a high level of press visibility pre-Covid. Yes, we are talking about the Panama Papers – the “scandal” that helped demonize, once again, the entire idea of asset protection structures.

But despite all the negative coverage by breathlessly anti-liberty activists with little understanding of how the global economy actually works, Panama remains a reputable jurisdiction within which to structure your company – if you conduct most of your business in Latin America.

But if your focus is not that region, we would probably abstain from Panamanian structures or even banking – there is simply too much negativity swirling about it.

Panama’s cost of living is also still quite reasonable, though it now tends to be the highest in Latin America (after Puerto Rico).

One reason for this is that they don't have control over their currency, the balboa. It has been pegged to the US dollar since 1904. Dollarization brought fiscal stability, but also an inability to control (read: “inflate away”) the currency, which generally meant a higher cost of living for Panamanians. 

For many years, Panama was home to one of the world’s most attractive residency programs – the Friendly Nations Visa. Westerners could obtain Panamanian permanent residency after starting a local corporation and depositing around $5,000 in a local bank account. 

But its conditions have become much stricter as of 2021. 

Today, Panama is still interesting for residency if you are a retiree with a stable income, or if you’re willing to purchase local real estate.

We’ll close by pointing out that Panama is a great retirement destination. In this regard, Panama competes with neighboring Costa Rica. 
Schiff Sovereign's Rolodex
Service Providers available in Panama
  • Immigration (residency, citizenship)
  • Full relocation services (real estate search, bank account opening, driver's licence, etc.)
  • Tax advice (attorneys and/or accountants)
  • Asset protection (specialized LLCs, trusts, etc)
  • Corporate services (company formation, etc.)
  • Real Estate (agents, lawyers)
  • Banking contact
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Sovereign Global Explorer

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Panama Overview
  • Region
    North and South America
  • Capital City
    Panama City
  • Largest City
    Panama City
  • Currency
    United States dollar
  • Languages
    Spanish
  • Population
    4.3 million (128th)
  • Life Expectancy
    77.6 years (84th)
  • GDP (Nominal)
    $71.1 billion (81st)
  • GDP/Capita
    $16,614 (68th)
Useful Data
For more details visit Cost of Living
  • Cost of Living
    Inexpensive (3/7)
  • Climate
    Average (3/5)
  • Safety
    Safe (3/7)
  • Pollution
    Average (3/5)
  • English Proficiency
    Low (4/5)

Sovereign Global Explorer

Benefiting from over a decade of our team’s boots-on-the-ground experience, Global Explorer is where your international journey begins.
PREMIUM REPORTS
Panama inside Sovereign Man resources

Articles featuring Panama

No inflation here...
Trends & News

No Inflation Friday: Dollarized Panama issues price controls for basic goods

July 25, 2014 Prague, Czech Republic Less than four weeks after starting his new job, Panama’s President Juan Carlos Varela already has a serious challenge to deal with: empty grocery shelves. This is largely a self-inflicted wound that was bound to happen. Fresh on the heels of his victory in May, the then President-elect announced […]

Trends & News

Actually, Panama has a higher corporate tax than Denmark…

Last night I got robbed. Not in the literal sense of the word. There weren’t armed men in masks holding me up on the sidewalk in Panama City. (I’ve been coming here for 13 years and have never once felt unsafe…) It was at the cashier’s cage at the Veneto Casino. After a few hours […]

Podcast

Panama and Southern Spain… where the real estate isn’t insanely overpriced

When Gideon Gono became the Governor of the Reserve Bank of Zimbabwe in late 2003, his country was already suffering from terrible hyperinflation. Throughout the 1990s, inflation in Zimbabwe averaged well over 20%. And just a few years later inflation had reached 200%. That’s when Zimbabwe’s government hired Gideon Gono to fix the inflation problem. […]

International Diversification Strategies

Panama rolls out new residency options in 2021

If the idea of packing up and leaving has crossed your mind lately, you certainly aren’t alone. With so many people across the globe staring at a new wave of COVID lockdowns, higher taxes, more chaos in their cities, etc., heading out for greener pastures is a really attractive proposition, especially now that so many […]

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