Central America / Caribbean & Pacific · Friendly Nations Visa
Investment
$5,000–$7,000
Presence Required
None required
Residency Timeline
1–3 months
Citizenship Timeline
5 years
Overview
Panama's Friendly Nations Visa is one of the most popular residency pathways in Latin America. Available to citizens of 50+ countries (including the US, UK, EU, Canada, Australia), it requires a small investment of $5,000–$7,000 in a Panamanian company or property. Panama has both Caribbean and Pacific coastlines, a territorial tax system, and is a major financial hub. After 5 years of legal residency, you qualify for Panamanian citizenship.
Pros & Cons
Pros
Available to citizens of 50+ countries
No minimum physical presence requirement
Territorial tax system — foreign income completely exempt
Caribbean and Pacific coastlines
Major financial hub — Panama City has excellent banking
Spanish language required for citizenship naturalization
How to Complete the Process
Verify your country is on the Friendly Nations list: Check that your passport country is on Panama's Friendly Nations list (50+ countries including US, UK, EU members, Canada, Australia, Japan, and more).
Form a Panamanian company or purchase property: Option 1: Form a Panamanian corporation (S.A.) — cost: ~$500–$1,000 in government fees and legal costs. Option 2: Purchase property worth at least $200,000. Company formation is the most common approach.
Apply for Friendly Nations Visa: Apply at the Servicio Nacional de Migración with company documents (or property title), passport, clean criminal record, and proof of economic activity. Processing time: 1–3 months.
Obtain permanent residency: The Friendly Nations Visa grants permanent residency immediately — no temporary permit required. You'll receive a Panamanian cédula (identity card).
Apply for citizenship after 5 years: After 5 years of legal residency, apply for citizenship at the Tribunal Electoral. You'll need to pass a basic Spanish language test and demonstrate integration.
Requirements Checklist
Be a citizen of one of the 50+ Friendly Nations (includes US, UK, EU, Canada, Australia, and most developed countries)
Make a minimum investment of $5,000 in a Panamanian company (company formation) OR purchase property worth at least $200,000
Obtain a temporary residence permit at the Servicio Nacional de Migración
After 5 years of legal residency, apply for citizenship
Tax System
Tax System
Panama has a territorial tax system — foreign-sourced income is completely exempt from Panamanian tax. Corporate income tax is 25%. Personal income tax is 0–25% progressive on Panamanian-sourced income only. No capital gains tax on foreign assets. Panama is one of the most tax-friendly jurisdictions in the world for people with foreign income.
Frequently Asked Questions
What countries are on the Friendly Nations list?
Panama's Friendly Nations list includes 50+ countries: all EU member states, US, UK, Canada, Australia, New Zealand, Japan, South Korea, Singapore, Israel, and most other developed countries. The full list is maintained by the Panamanian immigration authority.
What is Panama's territorial tax system?
Panama taxes only income earned within Panama. Foreign-sourced income — including foreign dividends, rental income, capital gains, and business profits — is completely exempt from Panamanian tax. This makes Panama particularly attractive for people with significant foreign income.
Is Panama a good place to bank?
Yes — Panama City is a major financial hub with a well-developed banking sector. Panama has strict banking secrecy laws and is home to branches of many international banks. The US dollar as official currency eliminates currency risk.