People are increasingly attracted to the idea of having a second residency. Some people love travelling and are always on the move so they want to become a resident of a country that can complement their nomadic lifestyle. Others are business-oriented and want to live in a country where they’re not burdened under taxes; while the rest just want to live in a country that has a decent, peaceful job market. Irrespective of the reasons, getting a second residency is not easy. It can be expensive, involve heaps of paperwork and long waiting periods. What if I tell you there’s still a way to get easy residency without any hassle, unnecessary costs, and delays? That’s what the Panama-Friendly Nations Visa is all about.
Understanding The Panama-Friendly Nations Visa
In 2010, the Panamanian government passed a law to streamline the permanent residency to foreigners through the Panama-Friendly Nations Visa which welcomes professionals and entrepreneurs from 50 countries that have friendly ties with Panama. The eligible countries include most of the European countries, the U.S.A., Hong Kong, Argentina, Taiwan, Japan, Israel, Canada, and Brazil.
The Panama-Friendly Nations Visa has gained popularity due to a range of benefits it offers. Let’s have a look at some of its benefits:
It’s One Of The Easiest Ways To Get A Second Residency
Qualifying for the friendly nations visa is very easy and applications are accepted within 2 months. The requirements are also simple and straightforward. To apply for the Panama-Friendly Nations Visa, you don’t have to be living in Panama and just need to show economic and professional ties with it and provide proof of financial solvency. There are three ways to do it:
- Find a professional job in Panama and provide proof of employment, like an offer letter from a Panamanian company.
- Incorporate a company as a shareholder or a board member of the company. The business is not required to have a physical presence in Panama, which means you can conduct business activities anywhere in the world.
- Buy real estate in Panama or buy a local company.
You can show financial solvency by depositing $5000 in a Panamanian bank and an additional $2000 for every dependent you have. After your application, you’re issued a temporary residence card that’s valid up to one year and are then issued a permanent residence card once your case is approved.
Living In A Tax-Free Country
As a resident of Panama, you become eligible for all its tax benefits. Panama is a low-tax country with a territorial tax system which means you’ll be taxed on income sourced within Panama only. According to Investopedia, Panama is one of the top 10 secure tax havens in the world.
The taxable income of residents is taxed on progressive rates. Taxable income of PAB 1100 (approximately $1100) is exempt from tax. Taxable income between PAB 1101 ($1101) and PAB 50000 ($ 50,000) is taxed at a rate of 15% and taxable income over PAB 5000 ($50000) is taxed at 25%.
Benefits For Companies:
The tax benefits apply to companies as well. Your company incorporated in Panama is not subject to tax on its income generated outside the country, including the dividends and interest income; you can be operating anywhere in the world and still enjoy the tax benefits in Panama. This is a major reason why many online businesses choose to incorporate their headquarters in Panama.
The Panamanian business laws also ensure confidentiality for offshore companies. Offshore companies aren’t required to declare the names of directors and shareholders or publish any public documents. It’s illegal for Panamanian banks to disclose any information about their clients, which makes Panama a good choice for offshore banking.
However, if you’re operating a company that sells products or services in Panama, you’ll have to pay an income tax, but the rates are lower than many European and Latin American countries.
A Peaceful Place To Live
Panama is a politically stable country where people enjoy civil liberties and personal freedom. Owing to its well-developed and modernized infrastructure with affordable and quality health care, fast-speed internet, and good roads and bridges; Panama offers excellent quality of life.
The cost of living depends on the city you’re based in and are lower as compared to many other countries in the region. It has good air connectivity with frequent international flights to almost every country. And to top everything off, the weather is warm all year around.
Panama is one of the most popular tourist destinations in the world with white sandy beaches, lush green mountains, a mix of old country life and modern skyscrapers, colourful buildings, and beautiful architecture. Imagine making all this your second home!
Panama is also a popular choice for retirees. Forbes listed it as one of the top 10 places to retire in 2019. Retirement income is not taxed at all and retirees get attractive discounts on a number of things like 50% off on entertainment, 35% off on medication, and 25% on domestic air tickets.
It’s A Booming Economy, Ideal For Business
If you’re an entrepreneur and want to be based in a country that’s tax-friendly and affordable, Panama is the ideal option. It has great infrastructure and rent is inexpensive even around the city center. According to the World Bank, Panama is one of the most promising economies with an annual growth rate of 5.6%.
Road To Citizenship
As a holder of the Panama-Friendly Nations Visa, you can apply for Panamanian citizenship after 5 years by spending a few days in the country and becoming a permanent citizen of this gorgeous tax haven. So if you’re looking for a Panamanian passport, the Friendly Nations Visa is the easiest way to get it.
With Panamanian passport, you can visit 151 countries without a visa or with visa on arrival including the United Kingdom, Schengen states, Israel, Bulgaria, Egypt, South Korea, Singapore, and Qatar.
If you would like more information on obtaining a second residency in Panama, please contact us HERE.
For any other information, you can contact our office HERE
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About The Author
Mikkel Thorup is the host of The Expat Money Show podcast and Director of Content at Escape Artist. He is also the author of #1 Best-Selling book Expat Secrets on Amazon. He has spent nearly 20 years in continual travel around the world, visiting more than 100 countries including Colombia, North Korea, Zimbabwe, and Iran. His goal is to help people just like you to generate additional streams of income, eliminate your tax bill, and take advantage of offshore structures so you can travel the world freely and never have to worry about money again. For more information on his legal (but creative) tax strategies for Expats watch this free video.
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