Panama Friendly Nations Visa: What It Really Requires After 2021

Who qualifies

The programme's official name is "Residente Permanente en calidad de Nacionales de Países Específicos": it is aimed at citizens of specific countries with which Panama maintains friendly, economic and investment relations. It was created in 2012 by Executive Decree 343. The list covers around 50 countries and is extended by decree, Peru for example was added in 2021.

Germany has been on the list from the start, as have Austria, Switzerland and most EU states, plus the United States, Canada, the United Kingdom, Australia, Japan and South Korea. What counts is citizenship, not where you live. A German passport holder living in Dubai is eligible.

On top come the usual conditions of any Panamanian residence permit: a valid passport, an apostilled police record from your home country, a health certificate and a sworn personal declaration. Family members can be included, in which case the main applicant has to show they can support them.

The 2021 tightening

With Executive Decree 197 of May 2021 and above all Executive Decree 226 of 20 July 2021, Panama reorganised the programme. The changes have applied since August 2021 and have two consequences.

First, there is no immediate permanent residency any more. Anyone approved today first receives a provisional residence permit for two years. Only after that can you apply for permanent residency.

Second, a token account is no longer enough. Decree 226 names exactly three grounds an application can rest on: employment, real estate or a fixed deposit. The old 5,000 dollar version is gone, even if it still appears in headlines.

The three routes and their amounts

Route 1: Employment with a company in Panama. You need an employment letter signed by the employer's legal representative stating the position, the salary and a commitment to cover repatriation costs if needed. Add the company's Public Registry certificate and its operating notice. Above all, a work permit has to be obtained from the Ministry of Labour, MITRADEL. That is the catch: a shell company of your own that "employs" you does not get far, because the work permit checks for a real employment relationship. Panama also reserves many professions for its own citizens. Without a minimum investment, this route is only the cheapest on paper.

Route 2: Real estate from 200,000 dollars. Proven with a Public Registry certificate showing you (or a company of which you are the beneficial owner) as owner of property worth at least 200,000 balboas. The balboa is pegged 1:1 to the dollar. The purchase may be financed through a bank with a general licence in Panama. The property has to be free of liens other than that financing, and you should hold it at least until permanent residency.

Route 3: Fixed deposit from 200,000 dollars. A certificate from a bank in Panama for a fixed-term deposit of at least 200,000 balboas, free of encumbrances and with a term of at least three years. This route still exists. It sounds simplest, but it has a precondition many underestimate: you first need an account with a Panamanian bank. More on that below.

For comparison: under the separate "Qualified Investor" programme, which leads to permanent residency without a provisional phase, the real estate threshold sat at 300,000 dollars during a transition period, with the increase to 500,000 dollars already written into the decree. Retirees have the Pensionado visa with a lifetime pension from 1,000 dollars a month. For working people below retirement age, the Friendly Nations Visa remains the cheapest durable route.

Costs and timeline

Government fees are modest. You pay a cheque of 250 balboas to the National Treasury and one of 800 balboas to the immigration service SNM, plus costs for the ID card, translations and apostilles. Legal fees vary by firm, roughly between just under 2,000 and 5,000 dollars for the main applicant, a guide value rather than a tariff. In practice the application is always filed by a Panamanian lawyer under power of attorney.

The sequence looks like this:

• Entry and filing. You enter with your original passport, the lawyer files the application and your entry is registered. You receive a temporary card that proves your status while the case is processed.
• Processing, as a guide value four to six months. The duration depends on the authority's workload.
• Provisional residency for two years. After approval, photos and biometrics are taken in person and the card is issued.
• Application for permanent residency shortly before the two years expire. Again with proof that the basis (job, property, deposit) is still in place, and again with an appointment on site.
• Cédula and naturalisation. With permanent residency you can apply for a cédula, the Panamanian ID card for foreigners. Naturalisation is possible at the earliest after five years as a permanent resident, with an exam on language, history and civics.

Realistically it takes two and a half to three years to reach permanent residency, not six months as before 2021.

"No presence required": what is true

True: Panama sets no minimum annual stay for this permit. There is no 183-day obligation to keep the residency.

False is the claim that the whole thing can be done remotely. At the very least you must be in Panama for the filing, for biometrics and card issuance, and for the permanent residency application. In most cases there is also an appointment to open the bank account if you take the deposit or property route. With good planning, two to three trips over the first two and a half years are enough, but not zero.

After permanent residency, common practice is: enter at least every two years and stay longer than 24 hours, a transit flight does not count. If you miss that, you risk a suspension that the officer decides on at entry. After a very long absence the permit lapses altogether. And for later naturalisation a pro forma residency is not enough anyway.

Taxes: residency is not tax residency

Panama taxes on a territorial basis. Income tax applies only to Panamanian-source income, meaning work, business or rentals in Panama. If you are employed there or generate local revenue, you pay progressive rates of up to 25 percent. Foreign income, such as dividends from a European brokerage account or fees from clients outside Panama, is not taxable in Panama.

That sounds like the perfect Plan B, but it has two catches.

First, the residence permit does not automatically make you tax resident. You are tax resident in Panama if you spend at least 183 days in the country in the tax year or keep a permanent home there with your centre of vital interests. A tax residency certificate from the tax authority DGI is only issued with evidence such as a lease or title, proof of your stays and an economic connection, and it has to be renewed every year. A residency card alone is not enough, and a certificate without real presence does not survive scrutiny by a European tax office.

Second, German tax liability does not end with a Panamanian ID. Anyone who keeps a residence or their habitual abode in Germany remains fully taxable there. Keep the flat and you stay in the system, whatever card is in your wallet. Germany and Panama have no general double tax treaty, only an agreement covering shipping and aviation, so there is no tie-breaker rule that could release you from German tax liability. If you really move, you also need to consider the exit tax on company shareholdings of one percent or more and the extended limited tax liability for ten years after a move to a low-tax country. On top, Panama has been on the EU list of non-cooperative tax jurisdictions for years, most recently confirmed in October 2025, which triggers additional obligations for business relationships with Germany. Other countries' exit rules work differently, so readers outside Germany should check their own.

How this plays out depends on the individual case and belongs with a tax adviser who knows emigration cases.

Banking: the real bottleneck

Many providers sell the visa with the promise of "banking access included". Residency does not create any right to an account. Since the Panama Papers and the years on the FATF grey list, Panamanian banks have been among the strictest in the region on know-your-customer checks.

Typically required:

• Passport and a second form of ID.
• One or two bank reference letters from your current bank, often no older than 30 to 90 days.
• A professional reference, for example from a lawyer or accountant.
• Proof of income and a source of funds explanation, backed by documents such as tax assessments, financial statements or sale contracts.
• Proof of address and a reason why you need an account in Panama.
• At some banks a five-figure minimum deposit, and usually an in-person appointment.

Foreign documents need an apostille and a Spanish translation. Rejections without explanation are not unusual, and some banks do not accept US persons at all because of FATCA.

For the deposit route this is the critical path: no account, no deposit, no application. If you plan this route, treat opening the account as step one and choose a bank your lawyer works with regularly. How a non-EU account fits in more generally is covered in the article on the non-EU bank account, the tiers from fintech to private bank in the banking ladder.

Who the visa suits

The Friendly Nations Visa fits people who want a foothold in Latin America anyway or are looking for a dollar location with property. If you want to buy a flat in Panama City or on the Pacific coast and are spending 200,000 dollars on it regardless, the residency comes almost as a bonus. It can also make sense as a pure fallback: a second residence permit outside the EU that is kept alive with one trip every two years.

It is of little use as a shortcut to tax freedom without moving. If that is what you are after, you end up with an ID card that changes nothing for taxes. Other options with lower entry costs or a different logic are compared in the overview of Plan-B residency options, such as Paraguay at much lower cost or Cyprus inside the EU.