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1. Reduce taxes in car imports (ISC tax apply)

2. Import tax exemption for households up to US$10,000

3. Import tax exemption for household goods

4. 25% discounts on utility bills

5. 25% discount on airline tickets and 30% on other transportation

6. 15% discount on loans made in your name

7. 1% reduction on home mortgages for homes used for personal residence (The house has to be purchased at your name not a company or SA)

8. 20% discount on doctor’s bills 15% on hospital services if no insurance applies

9. 15% off dental and eye exams

10. 10% discount on medicines

11.  20% discount on bills for professional and technical services

12.  50% discount on entrance to movie theaters, cultural and sporting events

13.  50% discount at hotels during Monday to Thursday, 30% on weekends, among others.

The requirements for the pensionado visa are:

1.   Photocopy of complete valid passport of applicant (and dependents – if applicable), including the picture page (that shows the picture, name, date of birth, passport number, place of issue, etc.), and all other pages (all pages of the passport).   

2.   Police record of applicant (and dependents – if applicable) duly legalized by Apostille or Panamanian consulate and translated into Spanish.

3.   Health certificate (for both applicant and dependents).

4.   Sworn declaration (form from Immigration).

5.    Proof of pension-  The pension must be for a net monthly amount of US$ 1,000.00 and for lifetime (This must be stated in the letter). This document needs to be translated and legalized. If you have one dependant the pension has to be for at least a net monthly amount of US$ 1,250.00. 

6.   If it´s a private pension, you need a letter from a foreign company that administers pensions that certifies that administers funds for the company that gives you the pension or for yourself, certificate of good standing for the company that gives and administers the pension and a proof of payment or bank statement. 

7.  Original Marriage Certificate for the spouse – legalized or apostilled by Panamanian consulate and translated into Spanish.

8.    If you have dependants you need to provide a bank reference letter showing a balance of at least 4 middle figures legalized or apostilled by Panamanian consulate and translated into Spanish, and a proof of domicile here in Panama (copy of hotel reservation, lease agreement, utility bill).  

9.    Six ( 6)  photos for each applicant.

Documents that our law firm will provide to you:

*Special Power of Attorney, signed by the applicant (and dependents – if applicable), authorizing our law firm to process the immigration applications and documentation.

*Letter of Responsibility, signed by the applicant, whereby the applicant takes responsibility for his/her dependents.

*Immigration Sworn Declaration form.

• Note:  For authenticating documents through the Panamanian Consulate, please contact us to request the contact information of the Panamanian Consulate nearest you.

One is the $60,000 reforestation visa (where you purchase titled property of minimum 3 Hectares  with Teak or other trees), and the other is the $80,000 reforestation visa (where you purchase titled property of minimum 5 Hectares with Teak or other trees).

The difference between the two is that the first grants you a temporary legal residency status up to 6 years. The renewal process is every 2 years.

The second grants a permanent legal residency status after 2 years.

In both cases, the investor should be the owner of the land and the investment must have a Forestry Registry approved by ANAM (National Environmental Agency).

General Requisites:

1.         Complete copy of your passport

2.         Police Clearance report from the police department’s letterhead where you have resided for the last two years.

3.         Health Certificate

4.         Background affidavit 

5.         Payments of $250.00 and $800.00 for the National Immigration Service.

(All overseas documents must be authenticated by a Panamanian Consulate nearest you or by Apostille).

It is also feasible to get the visa through a corporation.  In that case, we will need to start with the incorporation process first. 

Immigration Service will require the following from the company:

1.         Letter from either Secretary or Treasurer of the company certifying the investment. The investment must be higher than US$80,000.00, plus US$ 2,000 for each dependent

2.         Certified copy of share certificates

3.         Letter from the company’s accountant attesting about the investment of the applicant.

4.         Companies tax return or if company is new, its affiliation to tax office

5.         Forestry registry resolution issued by the national environmental authority

6.         Public registry certificate of the reforestation land or property

7.         Public registry certificate of the company

8.         Proof of investment through a Bank certification, Audited Financial Statements of the Company, Company’s invoices, etc.

This visa grants Panamanian I.D. Card and after 5 years you can apply for the Panamanian citizenship.

A brief explanation of the process will illustrate and help you to understand the process of buying a property in Panama. This process will be explained from the perspective of both seller and buyer, whether domestic or foreigner.

The sales process usually begins with the execution of a promissory purchase sale agreement whereby the parties agree to the terms and conditions to buy/sale an specific property.

To fulfill the duties and obligations embodied in the promissory purchase sale agreement, different options arise, including the purchase without financing. In this case, we define it as the act to transfer the ownership of the real estate whereby the buyer does not need or require financial aid by a bank to acquire the property, so he or she can carry out directly or by proxy the transaction.

Among the steps prior to the delivery of documents for the execution of the final deed of sale, the parties should verify before the status of the property subject of the sale, including the Public Registry to verify the ownership of the lot or condo and the National Land Authority (formerly Cadastre) to verify that the property is properly updated and is current in paying their taxes.

After rigorous verifications, usually the seller is obliged to furnish to the buyer, in order that the latter can prepare the deed, the following documents:

A. If the seller is an individual, he or she usually need to give, unless otherwise agreed, the following:
Property Tax Clearance of the Lot
Good Standing document issued by the Water authority – IDAAN
Good Standing document from the Home Owners Association (if property is a condo)
Form 106 – Transfer Tax Real Property (ITBI – 2%)
Form 107 – Capital Gains Tax (3%)
Certificate of receipt by the DGI of both forms
Copy of the payment receipt (payment of taxes)
Minutes of sale endorsed by a qualified attorney in Panama

B. If the seller is a legal person:
Minute of the General Assembly of Shareholders of the corporation or foundation charter (in the case of private interest foundations), through which the sale of property is  authorized
Annual fee tax payment receipt, if the party is a corporation or foundation
Good Standing of the Property Tax from the Ministry of Economy and Finance
Good Standing from the Water authority – IDAAN
Good Standing from the Property Maintenance fees (if property is a condo)
Form 106 – Transfer Tax for Real estate (Property) (ITBI – 2%)
Form 107 – Capital Gains Tax (3%)
Certificate of receipt by the DGI (Ministry of Economy and Finance) of both forms
Copy of the payment receipt (payment of taxes)
Minutes of sale endorsed by a qualified attorney in Panama

In both cases, it is important to mention that if the owner or legal representative of the real estate subject to sale is a foreigner, he must first obtain a tax identification number (8NT) at the Directorate General of Revenue, Ministry of Economy and Finance, for which it must submit the following documents:
1. Notarized power of attorney (when using proxy)
2. Complete copy of passport
3. Application form duly completed
4. Copy of the promissory purchase sale agreement

This identification number will be activated properly at the time of payment of taxes on the transaction.

After delivery of the documentation from the seller, the buyer ´s lawyer is obliged to prepare and submit to the Public Notary for signing the Protocol of the deed of sale, but before this step, it is customary to provide the Seller with an irrevocable letter of promise of payment issued by a local bank (lien on bank account), which will become effective once the public deed is duly registered with the Public Registry.

Other payment options include certified check or cashier issued by a local bank, given once the deed of sale is registered at the Public Registry in favor of the buyer.

Normally the promise of sale contracts include penalty clauses, which penalize the parties for any breach of its obligations, usually resulting in the loss or return the down payment made by the buyer.

After the sale is completed, the buyer must bring a copy of the deed duly registered with the National Land Authority (Cadastre) to update the owner and property value based on the sale´s price in order to determine future tax payments, based on the new assessed value, if any.

In the event that the transaction involves a bank to provide financing, documentation must be submitted to them in order to elaborate a single public deed including the mortgage and sale transaction.

Such transactions are usually entered into for more than sixty days in order to contemplate the time that the Banks take to finalize the transaction.

It is also usual to agree that the legal costs of registration of the deed be borne by the buyer.

Currently, the Panamanian government has successfully negotiated several agreements to avoid double taxation and has signed with Mexico, Spain, Barbados, Portugal, Italy, Netherlands, Luxembourg, South Korea, Qatar and Singapore. Soon, with the execution of the agreement with France and the agreement between United States and Panama for tax cooperation and the exchange of information relating to taxes, Panama will honor his commitment with the OECD and will leave the so-called grey listing. From the agreements that are signed, only Mexico, Barbados and the United States have been implemented.

The negotiation of treaties to avoid double taxation also implies the obligation to Panama to harmonize its tax laws (Law 33 of 2010) incorporating aspects such as rules governing the principle of free competition in tax, related parties, transfer pricing, permanent establishment and tax residence.

This is why there was a need to adapt the Panamanian tax administration to these changes, therefore the Ministry of Economy and Finance created by Resolution a Tax Information Exchange Unit and another one for International Taxation.

These efforts are intended to fight against international tax fraud, as set out in clause 26 of the convention with the OECD, and to work towards the administration and interpretation of tax treaties and the control of transfer pricing.

The Law No. 33 of 2010 grants additional powers to the Department of Revenue of the Ministry of Economy and Finance, such as:   to request and obtain tax information, beyond the domestic tax interest, in order to meet its obligations with regard to the tax information exchange. In addition, the Department of Revenue is also authorized and empowered to seek and obtain other information necessary to comply with international agreements signed by the Republic of Panama regarding the tax information exchange.

In all cases, the information collected is confidential, secret and for the exclusive use of the Department of Revenue, and under no circumstances, they can reveal it, unless is for the compliance with international agreements signed by the Republic of Panama for tax information exchange purposes or circumstances expressly enshrined in the law.