Concept
For many years, Panama's Friendly Nations Visa was considered the easiest way to quickly obtain permanent residency: citizens of about fifty "friendly" countries received status almost immediately. The 2021 reform changed this, but the program remains attractive—primarily due to territorial taxation, under which foreign-source income is not taxed in Panama at all.
Before and After
Before 2021, the visa granted virtually instant permanent residency with minimal requirements. Since August 2021 (Executive Decree 197, supplemented by Decree 226), the logic has changed: first, temporary residence is issued for 2 years, and only after maintaining it for at least two years and preserving the qualifying grounds can one apply for permanent residency. The main innovation is the mandatory real economic connection with the country.
⚙️ Main qualifying grounds after the reform: purchase of real estate worth at least 200,000 USD (bank financing is permitted) or employment with a Panamanian company. There is also an option with a fixed-term bank deposit—specific conditions should be verified for your situation.
List of Friendly Nations
Eligibility for the visa is determined by citizenship: the list includes about 50 countries—the USA, Canada, the United Kingdom, EU countries, Australia, Japan, and several others. Russia is not on this list, so Russian citizens can usually access the program only if they hold a second citizenship from the list. The list itself should be verified before application—it is periodically updated.
Taxes: Territorial Principle
Panama taxes only income from sources within the country. Foreign-source income—dividends, interest, capital gains, rental income, pensions—is completely exempt for both residents and non-residents. In other words, the combination of "Panamanian residency plus foreign income" results in zero Panamanian tax on that income. However, this does not eliminate two things: Panama participates in CRS, and your previous tax residency does not disappear by itself.
💡 The Friendly Nations Visa provides residency and territorial taxation, but the benefit only materializes when you have actually severed your previous tax ties under the 183-day rule. Residence status alone does not exempt you from taxes in another country.
How Relocation Works: Two Steps
After the reform, residency is processed in two stages. First, the applicant receives temporary residence for two years; when the term expires and the qualifying grounds remain valid, they apply for permanent residency. The application is not submitted personally—it is filed with the National Migration Service by a Panamanian attorney under power of attorney; the process cannot be initiated without a local lawyer. One application can include dependent family members: spouse, parents, and children up to 25 years old. The decision on permanent status is reviewed by the service for up to six months; after approval, a Panamanian cédula is issued along with indefinite work authorization. The path to naturalization opens later—usually after several years of permanent residency, and these conditions should be verified separately.
Regulation and Requirements
The program originated from Decreto Ejecutivo 343 of 2012, when Panama opened an expedited path to residency for citizens of approximately fifty friendly nations. Decreto Ejecutivo 197 of May 7, 2021, which came into force on August 5, 2021, rewrote the conditions: the symbolic deposit was replaced with a requirement for a real economic basis and a two-year probationary period. In addition to the qualifying grounds themselves, the applicant must demonstrate financial solvency, absence of criminal record, and the presence of professional or business ties with Panama. Citizenship remains decisive: only citizens of countries from the approved list can use the visa.
There are three economic grounds, and the applicant chooses one. The first is real estate in Panama with a registered value of at least 200,000 dollars; the property must have clear title, can be purchased with a mortgage, and can be registered to an individual or to a company or foundation where the applicant is the ultimate beneficiary. The second is a fixed-term bank deposit of at least 200,000 dollars in a Panamanian bank. The third is an employment contract with a local employer and a work permit, with the company required to justify hiring a foreigner. The chosen grounds must not only be demonstrated at the time of application but also maintained until permanent status is granted.
🧭 Residency and tax residency are different statuses: residence status alone does not make a person a tax resident of Panama; this requires 183 days in the country or center of vital interests. The Friendly Nations Visa addresses the issue of legal status and access to territorial taxation, while a person's actual tax situation is determined by real presence.
Evolution of the Program
The logic of the reform is visible against the backdrop of general tightening toward "residency and citizenship by investment" schemes. In the 2010s, Panama competed for mobile capital with maximally simple entry; by the early 2020s, international pressure for transparency—from the EU, OECD, and FATF—made symbolic schemes reputationally expensive. The 200,000-dollar threshold transformed the visa from a formality into an instrument with real economic ties. The trend is regional: neighboring Paraguay, Uruguay, and Costa Rica have also shifted residency toward verifiable investments and presence.
On the foreseeable horizon, the program appears stable: Panama maintains territorial taxation and remains a convenient point for relocation, but requires more documentation and real grounds. For those planning relocation, it is prudent to anticipate further increases in requirements, verify in advance the current status of your country on the list, and maintain the chosen grounds throughout the transition period.
Who It Suits
The program is good for those who need a base in Latin America with territorial taxation and a path to permanent residency, and eventually to naturalization (usually after several years of residency; conditions should be verified). It is no longer suitable for those seeking instant status without presence and investment: now a genuine connection with the country is required—real estate or employment.
💡 After the reform, this is a two-stage path with a real investment starting at 200,000 USD; the former "quick permanent residency" no longer exists. The strong point is territorial taxation; the weak point for Russians is the absence of the Russian Federation from the list of friendly nations.
This material is for informational purposes and is an expert overview, not individual advice. The list of countries and program requirements change periodically—verify current conditions before applying.
Key factual claims
- Before 2021, the visa granted virtually instant permanent residency with minimal requirements.
- Eligibility for the visa is determined by citizenship: the list includes about 50 countries—the USA, Canada, the United Kingdom, EU countries, Australia, Japan, and several others.
- The program originated from Decreto Ejecutivo 343 of 2012, when Panama opened an expedited path to residency for citizens of approximately fifty friendly nations.