The Friendly Nations Visa, as it works now.

This is Panama's most-searched residence route, and also its most misunderstood. Most of what circulates online still describes the programme as it worked before 2021, when a corporation and a few thousand dollars in a bank account were enough. That version no longer exists. What follows is the programme as it actually operates.

The Friendly Nations Visa was created in 2012 and for nine years was the cheapest serious residence programme in the Americas. An applicant incorporated a Panamanian company, deposited a modest sum, showed “economic or professional ties”, and received permanent residence almost immediately.

Executive Decree 197 of 7 May 2021, refined by Decree 226 of July 2021 and effective from 5 August 2021, closed that route. The changes were structural, not cosmetic:

• Permanent residence is no longer granted up front. The first permit is temporary and runs for two years.
• Economic ties must now be substantiated through one of three defined routes, each with a hard threshold. A company and a bank balance no longer qualify on their own.
• The investment figure is USD 200,000, whether in property or in a term deposit.

Panama maintains a list of countries it regards as having friendly diplomatic, professional and economic relations. It runs to roughly fifty nationalities and is set by executive decree, which means it can be amended without primary legislation.

The list above is indicative rather than exhaustive, and it is the single element of this programme most likely to have changed since this guide was reviewed. Confirm your own nationality against the current decree before you spend anything. If your nationality is not on the list, the Friendly Nations route is closed to you and the Qualified Investor Visa, which has no nationality restriction, is the usual alternative.

This is the route most applicants take. The property must be titled in your own name or in the name of a Panamanian entity you control, and the public deed must be registered. You will be asked to evidence that the purchase funds originated abroad.

• Bank financing is permitted. Unlike the Qualified Investor Visa, you do not have to arrive with the full USD 200,000 in cash. A Panamanian mortgage against the property is acceptable, provided the registered value clears the threshold.
• The registered value is what counts, not what you paid or what an agent tells you the property is worth. Under-declaration to reduce transfer tax is common in Panama and will sink an application.
• Off-plan carries timing risk. The deed has to be registered for the application to proceed, and Panamanian delivery dates slip.

A three-year fixed-term deposit of USD 200,000 with a Panamanian bank, held free of liens and in your own name. Mechanically it is the simplest of the three: no title search, no valuation, no developer.

The practical obstacle is not the money, it is the account. Panamanian bank onboarding for non-residents is slow and document-heavy, and it has become more so as the country has worked to stay off international grey lists. Expect several weeks, a source-of-funds file and, frequently, a request for documents you have already supplied. Start the banking before anything else.

A genuine employment contract with a Panamanian company, accompanied by the employer's corporate documents, its social security registration and evidence that the position is real. There is no capital requirement at all, which makes this the only route into Panama that costs nothing but a job.

It is also the route with the least margin for error. The authorities look at whether the employer trades, whether the role is plausible and whether the salary is consistent with the position. Arrangements constructed purely to produce a permit are refused, and a refusal on those grounds is difficult to recover from.

A spouse and dependent children are included as dependants on the principal application. Each dependant adds government and legal fees, and each brings a separate document set: marriage certificate, birth certificates, and for adult children, evidence of continued dependency and study.

Panama treats dependant documentation strictly. Certificates must be apostilled and recent; a marriage certificate issued a decade ago will usually need to be reissued.

The USD 200,000 is the visible number. The costs that decide whether this route makes sense are the ones underneath it.

This is the step that catches people out. The two-year permit is temporary, and conversion is not automatic: you apply, and you demonstrate that the condition that qualified you still holds. Sell the property, break the deposit or leave the job before the conversion is granted, and the basis for the permit is gone.

Plan the conversion filing well before the two-year mark. A permit that lapses cannot be converted, and the alternative is starting again.

Panamanian naturalisation requires five years of residence, and in the usual reading the clock runs from permanent residence rather than from the first temporary permit. Under the Friendly Nations route that means roughly seven years in total: two temporary, then five.

Naturalisation is a separate petition with its own requirements, including Spanish and Panamanian civics. It is covered in full in our guide to Panamanian citizenship.

Panama operates a territorial tax system: income arising outside Panama is not subject to Panamanian income tax, regardless of residence status. Panama-source income is taxed on a progressive scale.

Holding a residence permit is not the same as being tax resident, and neither, on its own, changes how your country of origin taxes you. US citizens are taxed on worldwide income wherever they live. Several European countries apply exit taxes or continue to treat you as resident until you have genuinely severed ties. Take advice in the country you are leaving before you take advice in the country you are joining.

The honest summary: Friendly Nations is cheaper and slower, the Qualified Investor Visa is dearer and immediate. If you qualify for both and the objective is a second passport, the two years you lose at the start of the Friendly Nations route usually cost more than the extra capital.

1. Acting on pre-2021 information. By far the most common. The programme was rewritten in 2021 and a great deal of outdated material still ranks well.
2. Buying property before checking title. Panamanian title includes derecho posesorio, or possessory rights, which is not registered title and does not qualify. Verify at the Public Registry.
3. Under-declared purchase price. Widespread, and fatal: the registered value is the value the application is assessed on.
4. Letting the temporary permit run down. Conversion has to be filed inside the two years.
5. Assuming the nationality list is fixed. It is set by decree and has been amended before.
6. Treating residence as tax residence. They are different tests with different consequences.

Executive Decree 197 of 7 May 2021; Executive Decree 226 of July 2021, in force from 5 August 2021; Panama's Servicio Nacional de Migración; the Gaceta Oficial for the current nationality list and thresholds.

◇ Panamanian immigration rules are set by executive decree and are amended more often than legislation. Every figure in this guide was verified at the review date shown below and should be confirmed against the Gaceta Oficial before you act on it, including by us.