Key Numbers to Know (2026)

• Personal income tax on foreign source income: 0% (territorial system)

• Personal income tax on Panama-source income: progressive up to 25% in the top bracket

• Short-Stay Visa for Remote Workers (the ‘Nomad Visa’): launched 2020 — USD $36K/year proof of income

• Friendly Nations Visa (FNV): now requires USD $200K real estate OR USD $200K bank deposit + $5K income (reformed 2021 from simple bank deposit)

• Qualified Investor Visa: USD $300K real estate OR USD $500K securities

• Pensionado Visa (for retired/semi-retired nomads): USD $1,000/month pension (plus $250/dependent)

• Physical presence to maintain residency: minimum 1 day every year

• Corporate tax: 0% on foreign sourced income, 25% on Panama-sourced income

Why Panama Works for Nomads

Panama uses territorial taxation — you’re only taxed on income sourced within Panama. As a digital nomad earning income from foreign clients or foreign business entities, your worldwide non-Panama income is generally outside the Panamanian tax net, meaning you can essentially pay zero income tax. Combined with historically flexible physical presence requirements, and a great central location with direct cheap flights to all the major destinations of North and South America plus Western Europe, this made Panama a popular residency choice for nomads who wanted a real, defensible, tax-efficient residency without being tied to one location year-round.

The Visa Options

1. Short-Stay Visa for Remote Workers (2020). Aimed specifically at digital nomads. Requires proof of $36K+/year foreign income and remote work. Renewable. Doesn’t lead to permanent residency but provides legal tax residency status.

2. Friendly Nations Visa (reformed 2021). Historically the simplest — bank deposit + friendly nation passport. Reformed in 2021 to require economic substance (real estate purchase, longer bank deposit + employment). Still viable but no longer trivially easy.

3. Pensionado. For those with $1,000+/month pension. Very affordable route for retirees or semi-retirees (e.g. no longer work a day-to-day salary job but still oversee your business interests) but doesn’t fit most nomads.

4. Qualified Investor. For those making $300K+ real estate or $500K+ securities investment.

Physical Presence Reality

Panama historically required only minimal physical presence to maintain residency. This has been tightening.

Nomads should:

• Establish a real Panamanian address

• Maintain some genuine ties (bank account, address, occasional visits)

• Track physical presence carefully

• Consider that requirements may continue to evolve

If you’re an FTR client, we help you with all of this, including referring you to our real estate partners in Panama City to fast-track finding the ideal rental.

Banking Reality

Getting a Panamanian bank account as a foreign resident is not automatic. Banks have tightened significantly since 2018.

Expect:

• Substantial minimum deposit requirements ($10K-$50K+ typical)

• Multiple professional references required

• In-person visits usually required

• Some banks refuse certain nationalities entirely

• An ~40-60% refusal rate on the best rated banks

…unless you’re an FTR client. Our membership packages include bank account introductions, meaning we can assist you to open a bank account remotely, with zero minimum deposit requirements, in under 10 days. We have the relationships and the know-how to make things happen.

Where Panama Doesn’t Fit

Americans: Panama residency doesn’t help with US citizenship-based tax. See Article A11.

High social profile: Panama has faced international scrutiny (Panama Papers legacy). Some clients - such as politically exposed persons - prefer lower-visibility jurisdictions from a reputational point of view (i.e. not drawing media attention for having Panamanian residence if you’re famous).

Those wanting European or Asian access: Panama is Latin America, and it’s perfect if you want to spend most of your time in the Americas. If your business or lifestyle requires constant EU access, consider Cyprus, Malta, Portugal instead. Similarly if you require constant access to the Asia-Pacific region, consider Thailand, Singapore, or Malaysia instead.