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Category Archives for "Panama"

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Panama as Residence and Canada LLP as Business?

The San Blas Archipelago stretches off the Atlantic coast of Panama, whose 378 islands and islets await visitors with crystal blue waters and palm-fringed icing sugar beaches. Welcome to the easy-access tax haven Panama!

Panama Residency and Canada LLP
Crystal blue sea, beautiful Caribbean islands, deep green jungle, a relaxed attitude to life and wonderful hosts? Right, I am talking about Panama.

Is Panama a good choice?

Language

Unfortunately English is not a common language in Panama. Fortunately, they speak Spanish and not some little-used language, as for example in Thailand.

Security

Panama is a very safe country with no noteworthy attacks on tourists or foreigners. Only border regions such as Darién should be avoided. Yes, there are some dangerous drug dealers near the columbian border.

Weather

In the tropical environment of Panama is always good weater between 24-33°C. Even in rainy seasons you’ll enjoy it for sure. A breathtaking variety of flora and fauna meets highly civilised cities and also simple villages.

Supply and Prices

Panama is providing a lot of agricultural products like bananas, cocoa beans, coffee, coconuts, timber, beef, chicken, shrimp, corn, potatoes, rice, soybeans, and sugar cane. However, Panama imports also a lot of food from the US and some other countries.

The tap water in Panama City is very safe to drink, as is the water in most other parts of the country. Just some provinces require a water purifier or bottled water.

Traffic

In Panama one drives on the right side of the street. The traffic in the capital is not for the faint of heart. However, beside that it should be OK.

Relocation

With the Panama Friendly Nations Visa it is very easy to get a permanent residence. Countries: 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, Montenegro, Netherlands, New Zealand, Norway, Paraguay, Poland, Portugal, San Marino, Serbia, Singapore, Slovakia, Spain, South Africa, South Korea, Sweden, Switzerland, Taiwan, United States of America, Uruguay and United Kingdom.

What about taxes?

Tax system

Those who live in Panama are subject to local territorial taxation. In plain language: only income that is earned in Panama or funds that reach Panama are taxed. All other foreign income does not have to be declared and is therefore tax-free. So enjoy this beautiful environment with a value added tax of 7%.

Within Panama the corporate tax is very high (25% but multinationals can negotiate). If you want to earn money in Panama, we advice you to combine it with another tax haven like Canada.

Income tax (wages, rent, etc.), progressive
0 – 11 TUSD Annual Income: 0%
11- 50 TUSD Annual income: 15%.
> 50 TUSD Annual income: 25%

Capital Gain Tax 10% (Taxation of profits)
Interest income is tax-free.
There is no inheritance tax in Panama.

The real estate market in Panama is internationally one of the most interesting locations for real estate investments.

Real estate

The following information has some special rules which you can benefit from in several situations.

Real estate sales tax: 2% on the sales value
Real estate tax
up to 30,000 USD / exempted
30,000 – 250,000 USD / 0.6% p.a.
250,000 – 500,000 USD / 0.8% p.a.
over 500,000 USD / 1.0% p.a.

How You Can Apply for a Panama Citizenship?

You need to prove “professional and economic ties with the Republic of Panama“. That’s why you first have to establish a Panama company.

You additionally need “Proof of Economic Solvency is a requirement“. That’s why you first need to get a Panama bank account and deposit temporarily 5,000 USD in it. Solvency is not defined but this amount should be enough as experience says. It depends on immigration officer.

After the application is filed along with all required documents the immigration office will issue a one year temporary residency card (carnet) which will be replaced by a permanent residency card once the application is approved.

Preparation:

  • All required documents for immigration processing must be apostilled or authenticated by the Panamanian Consulate in the country of issue.
  • All your documents must be valid for at least 90 more days.
  • All documents must be sent to the agency per e-mail, too, before starting the process.
  • All authenticated or apostilled documents must be sent physically to the agency at least 2 weeks prior to your arrival in Panama. This will allow our attorneys enough time to process the necessary authentications of the documents at the Ministry of Foreign Relations. Authorized translations of all documents must be done. Either by the agency or you. I guess you can get cheaper translations in your country!
  • The required documents (police/criminal history report, etc.) must be issued in your home country.
  • Establish a company in Panama through the agency
  • Documents needed:
  • 8 passport size photos
  • The Panama immigration department requires the applicant to provide an authenticated criminal history report issued by a “federal”, “central”, or “national” police force or criminal investigation authority. This document must be authenticated by the Embassy or Consulate of Panama, or Apostilled. After getting the police report you can have only one stamp of Panama in your passport. So, after getting the report and before traveling to get the process going you cannot enter Panama.
  • written Statement describing the economic activities to be conducted by the applicant in Panama: Provide documentation that the applicant is a member of the Board of Directors or majority shareholder (50%) of a Panama Corporation or is the owner of a Panama company.  If the Panama Corporation or Panama Company is new, provide proof of its franchise tax being paid.  If the corporation or company is over one year old, provide proof of its tax return, and good standing certificate. In other words, the applicant must set up a Panama Corporation and be appointed in the Board of Directors. This Corporation must be existent until the Residency process is approved. Under the current law, the corporation does not need to be active in business, it simply needs to be formed (inscribed in the Public Registry of Panama). Retail business is excluded.
  • Copy of Applicant’s second I.D. (other than Passport): Issued from applicant’s country of origin, such as a driver’s license or government issued photo I.D.  This requirement is in addition to the passport to prove residency and citizenship.  This document must be Apostilled or authenticated by a Panamanian Consulate where the document is issued. If you do not possess a second ID from your country of origin you can provide a birth certificate that is apostilled or authenticated by the Panamanian consulate in the country of issuance.
  • Proof of Solvency: Bank letter or reference proofing that you have at least 5,000 USD deposited.
  • Personal Sworn Affidavit explaining the purpose for seeking Panama Permanent Residency and ability to support family and dependents. (This form will be supplied by Panama Offshore Legal Service’s immigration attorney.)

Process:

Trip 1

Get a personal bank account in Panama. Maybe you need to try several banks. We can set up interview dates as soon as you know when you can come to Panama. Here you better have some documents prepared. I don’t know if all are always necessary but those are the recommendations I can give. The better you are prepared the easier it will be:

  • Passport copy
  • Second I.D. copy (drivers license, ID, …)
  • Original bank reference letter addressed to the bank in Panama
  • Annual tax declaration, employment letter, or retirement income document (document that proves your source of income). This requirement is very important since the bank needs to know how you make money or the source of your funds to be deposited to the account.
  • Personal resume / curriculum vitae, describing your education and work history.
  • Letter addressed to the bank, explaining the purpose of establishing the bank account, what banking services will be required such as checking/savings account, debit card, credit card, online banking, etc, the estimated monthly deposits / withdrawals, and estimated average balance of the account.

Trip 2

Get your documents in your country and their authorization by the Panama consulates.

Trip 3 

When the immigration application process starts you need to be at least 7-9 business days in Panama City.

  • When entering Panama you need to get the stamp into your Passport with which you apply.
  • Dresscode: Male applicants must wear long pants, collared shirt, and shoes with socks. Do not wear shorts, cut-off shirts or t-shirts, or any footwear that shows toes.
  • Procedure during the 7-9 business days:
  • Registration at the Immigration Office in Panama City
  • Document preparation (usually by the agency): notarized photocopy of entire passport
  • Get a health certificate by a licensed medical doctor in Panama
  • Presentation of the documents to the Immigration Office (usually done by the agency)
  • Temporary resident card issuance which is valid for 1 year. Usually the  residency resolution comes within 3-6 months.
  • Multi Entry-Exit Visa application and processing (needed until the final resolution and to exit the country without getting a 2,000 USD fine)

Trip 4 

Finishing the immigration process: Once the approval comes in you will get informed by the agency and you have 3 month time to go to Panama for personally getting your new Panama ID card.

Trip 5 

Getting the Permanent Residency Card. 2-3 month after your ID you need to come back to get your Permanent Residency Card issued by the Civil Registry (“cedula”). It takes 2-3 business days.

You have to visit Panama every 2 years to keep the Permanent Residency. You can now check for an affordable “address” with utility bills. The agency might know how to get one.

Fees and Costs to Become a Permanent Resident

Estimated Fees & Costs
FEES:  Legal Fees $2,140.00
FEES:  Company Formation

FEES: Our Service Flat Rate

$1,500.00

$325.00

EXPENSES: Rights of Application $250.00
EXPENSES: Immigration Deposit $800.00
EXPENSES: Temporary Card $50.00
EXPENSES: Permanent Card $100.00
EXPENSES: Multiple Return Visa $150.00
EXPENSES: General (Notary, Health, etc) $150.00
EXPENSES: Translations $100.00
EXPENSES: Banking Lobby $535.00
The total is approximately = $6,000.00

Less bureaucracy with the Canada LLP

Now it is Your Turn

What questions and additions are on your mind right now? Share them with us!

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