After almost a decade of facilitating easy entry into the Panamanian market, the Panama Friendly Nations Visa is going through a major overhaul. But while its parameters will tighten significantly from August, the visa is not disappearing as some investors fear.
For anyone considering business formation in Panama, these changes are of considerable interest.
Read on to understand more about what the Panama Friendly Nations Visa is, how it is changing, and whether you still have time to apply for it in its current form.
Or go ahead and contact us now to discuss your business needs in Panama, or elsewhere in Latin America and the Caribbean.
SEE ALSO: How to Register a Company in Costa Rica in 10 steps
What is the Panama Friendly Nations Visa?
First introduced by executive decree in 2012 under the presidency of Ricardo Martinelli, Panama’s Friendly Nations Visa created a streamlined system for foreign investors to obtain residency in the country.
Originally, citizens of 50 nations were able to apply for the visa, however that was later expanded to 54, with the list including the likes of Australia, Canada, New Zealand, South Africa, the United Kingdom, and the United States, as well as EU members and various Asian countries.
Obtaining the visa requires applicants to prove their economic ties to Panama, either by being hired by a Panamanian firm, or by being a board member or major shareholder of a local corporation. Many applicants purchase a local business with proof of taxes to meet this demand, with such purchases often possible for no more than $2,000 (all figures in USD).
On top of that, the applicant needs to open a Panamanian bank account and deposit $5,000, as well as an additional $2,000 for each dependent. They also need to issue a certified check for $800 to the National Migration Service for repatriation services.
If the applicant can meet those requirements and is able to provide criminal record background checks from their home country — or any country where they have resided — covering the past two years, as well as a certificate of good health from a local doctor that was issued within the previous 90 days, they are eligible for the visa.
In general, the Panama Friendly Nations Visa in its current form is issued in approximately six months.
Changes to the Panama Friendly Nations Visa
Modifications to the Panama Friendly Nations Visa came as the result of another executive decree, this time issued by current President Laurentino Cortizo and published on May 20.
Executive Decree 197 shakes up the process considerably, with the Friendly Nations Visa process now allowing owners of local businesses to apply for a temporary visa that is valid for two years. However, unlike before, applicants must also simultaneously apply for a work permit, so simply buying a local corporation is no longer sufficient.
Beyond purchasing a company and applying for a work permit, Panama will still issue a Friendly Nations Visa to people employed by a local firm, while an additional option for obtaining the visa is now available, via purchase of of a property for at least $200,000.
In all cases, the applicant will only be eligible for a two year temporary visa, after which they will be able to apply for permanent residency.
The new process can also be expected to take considerably longer, given the work permit element, with processing time likely to take between eight and 10 months.
What is more, the list of eligible countries has shrunk to 53, with Taiwan no longer included on the list — in keeping with a regional trend for shunning the island nation, due to longstanding and ongoing pressure applied by China, which considers Taiwan a rogue territory.
Is it too late to apply for the current Panama Friendly Nations Visa?
If you are wondering if it is too late to apply for the Panama Friendly Nations Visa in its current guise, the short answer is no. But the clock is ticking.
The process to establish a local corporation and open a personal bank account takes around a week, meaning that you could theoretically still get it all done, as long as you are in the country by July 26.
However, given that there may be a flurry of last minute applications, you would be wise to arrive sooner — ideally no later than July 19 — in order to give yourself two full weeks to complete the process.
Bear in mind, you’ll need to arrive with the following documentation:
- Apostilled criminal record background checks covering the past two years
- Residency permits, if you have been living in a country where you are not a citizen during that two-year period
- An apostilled copy of a second ID document (such as a driver’s license)
- A bank certification or recommendation letter in your favor
- A utility bill to corroborate your current address
- A copy of a 2020 income tax return and bank statements from the last three months
- A reference letter, if you are working for a local company.
Note that you will need to be able to make the $5,000 deposit into the bank account you open in order to complete the process.
Biz Latin Hub can assist you getting a visa in Panama
At Biz Latin Hub, our multilingual team of corporate support experts has the experience and know-how to help you obtain a Friendly Nations Visa in Panama. With our complete portfolio of back office solutions, including legal, accounting, recruitment and visa processing services, we can be your single point of contact for entering the market and operating in Panama. or any of the other 17 jurisdictions around Latin American and the Caribbean where we are present.
Reach out to us now to discuss how we can assist you.
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