Concept
Panama's Friendly Nations route is a two-stage residence process for nationals on an approved list. It requires local employment, qualifying real estate or a fixed-term bank deposit. Immigration residence and the tax treatment of income are separate questions.
The route links eventual permanent residence to a continuing local economic connection: the qualifying ground must be evidenced at the provisional stage and again in the permanent-residence application.
The main boundaries of the route are:
| Parameter | Rule |
|---|---|
| Authority | National Migration Service (SNM) |
| Eligible nationalities | 50 states and Hong Kong |
| Initial status | Provisional residence for 2 years |
| Economic grounds | Employment, real estate or a fixed-term deposit |
| Investment minimum | B/.200,000 for real estate or a deposit |
| Tax effect | Immigration residence does not determine tax residence |
Before and After
The 2021 reform replaced the previous direct permanent-residence route with provisional residence first. Under Decree 226 of 20 July 2021, effective from 7 August 2021, 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.
List of Friendly Nations
Eligibility for the visa is determined by citizenship: the list in Decree 16 of 31 August 2026 contains 50 states and Hong Kong—the USA, Canada, the United Kingdom, Australia, Japan, most EU member states, and several others. The EU qualifier matters: Italy, Bulgaria, Romania and Slovenia are absent from the list, and Italian citizens instead use a separate route under the Panama–Italy friendship treaty (Convenio Panamá — Italia). 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
For individuals, Panama's income-tax return instructions deduct foreign-source income from the taxable-income total under article 694 of the Fiscal Code. The source of each receipt still has to be classified correctly; a residence permit does not turn locally sourced earnings into foreign-source income. Panama participates in CRS.
Obtaining this permit does not automatically end a person's previous tax residence. Departure tests, continuing ties and any applicable treaty must be assessed under the laws of the countries concerned.
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 SNM requirements sheet calls for a notarised power of attorney and an application.
One application can include dependent family members—spouse and children; an adult child under 25 is included only on proof of full-time regular study together with a sworn declaration of being unmarried. Parents are absent from the dependants listed for this category. The SNM requirements sheet does not state a decision deadline. Residence does not replace the separate MITRADEL work-permit process. Naturalisation requires a separate assessment and is not granted by this residence programme.
Regulation and Requirements
The base instrument is Decree 416 of 13 June 2012. Decree 197 of 7 May 2021 introduced the provisional stage and revised economic requirements; Decree 226 of 20 July 2021 revised those requirements further and expressly set commencement for 7 August 2021. The applicant must meet the documentary requirements, including criminal-record evidence, and qualify through a listed nationality and one of the permitted economic grounds.
There are three economic grounds, and the applicant chooses one. One caveat matters: decree 197 as published offered only two grounds — employment and real estate, and the real estate had to be held strictly “a título personal”, in the applicant's own name. The third ground, and the option of holding the asset through a legal entity, were added by Decreto Ejecutivo 226 of 20 July 2021, which is the instrument the National Migration Service now cites as the legal basis for this category.
The three grounds differ in the required asset or employment connection:
| Ground | Minimum | Conditions |
|---|---|---|
| Real estate | B/.200,000 | Registered property in Panama; mortgage financing is permitted. |
| Bank deposit | B/.200,000 | A general-licence Panamanian bank; at least three years; free of encumbrances. |
| Employment | — | A contract with a local employer and a separate work permit. |
Real estate or a deposit may be held personally or through a company where the applicant is the ultimate beneficiary. For a private-interest foundation, the applicant must be both founder and ultimate beneficiary. The chosen ground must be demonstrated at application and maintained until permanent status is granted.
Evolution of the Program
Decree 16 of 31 August 2026 added Ecuador to the eligible list from 1 September 2026. It preserved the other requirements, procedural stages and fees under Decree 226, including the two-year provisional stage. An expansion of eligible nationalities therefore does not remove the economic-ground or work-permit requirements.
Who It Suits
The program is good for those who need a base in Latin America with territorial taxation and a route from provisional to permanent residence. It requires documented economic grounds: qualifying real estate, a fixed-term deposit, or local employment. The B/.200,000 minimum applies to the two investment options; employment is a separate alternative.
The list of countries and program requirements change periodically—current conditions are worth verifying before applying.
Q/A
Eligibility, process and tax
How should eligibility for the Friendly Nations route be checked before filing?
Eligibility depends on citizenship of a country on the current list, not on a former residence permit or place of business. Before spending, check the live list and requirements sheet published by Panama’s National Migration Service and identify the passport under which a dual national will apply.
Which economic grounds are recognised after the reform?
Decree 226 and the current SNM sheet provide three routes: local employment with the MITRADEL process, real estate worth at least B/.200,000, or an unencumbered fixed deposit of at least B/.200,000 in a general-licence Panamanian bank for at least three years. The selected ground must be evidenced.
Does the first application grant permanent residence immediately?
No. SNM describes the initial status as provisional residence for two years. A permanent-residence file is submitted after that period and the qualifying ground is evidenced again. The property, deposit or employment connection must therefore be maintained; conversion is not automatic.
Who can be included as a dependant, and does the family receive work rights?
The SNM sheet covers a spouse and children; an adult child under 25 needs proof of regular full-time study and a sworn declaration of being unmarried. Inclusion as a dependant does not replace work authorisation: employment-based applicants must complete the separate MITRADEL process.
Does Panamanian immigration residence create tax residence or end the former one?
No. Immigration status alone answers neither question. The tax result must be analysed separately under current Panamanian rules, actual days, the centre of personal and economic ties and any applicable treaty; ending the former residence is determined under the former country’s law.