Panama vs. UAE Residency: Is Panama Still Worth It?

[TopoChico]

I wanted a big city with no taxes and close proximity to the Americas (time zone and family).

Caribbean was too small/expensive and U.A.E. is a shitty place for the reasons I mentioned in my initial post.

Good day, I am also looking to live tax free ) can you point to a good professionals like Lawyer and CPA in Panama? I am a resident here and few other Latin America countries and really love it. Have been living in this area for many years. Went to Spain for a bit but it was a shithole so quickly back to South America.

 

[BalnearioCamboriu]

I've never gone to the Darién Gap

I was pondering an idea of going from Colombia to Panama by bus. The border territory, as I now see, has turned out to be Darien Gap.

 

[JackAlabama]

I was pondering an idea of going from Colombia to Panama by bus. The border territory, as I now see, has turned out to be Darien Gap.

You can go by boat.

 

[Chonsai]

Panama is one of my candidates for 'new home', so I have some questions too.

If you need tax residency, then need to stay 183 days.

Is this 183 days every year, or just the first year to establish yourself as a tax resident? And then it's easier to maintain. Would 183+ days there allow me to get a tax residency certificate?

Panama has a specific exclusion so that foreign-sourced income is exempt even if the mind and management here

It hasn't been made clear to me yet what 'foreign-sourced' income is. If I lived & worked in Panama full-time for a Panamanian company I own, but all of my customers & business were strictly from OUTSIDE of Panama (e.g. blacklisting the IP of Panamanian visitors to my websites, explicitly laying it out in T&Cs...) would income be considered 'foreign-sourced'?

Some discussions with various legal professionals hinted that because I worked from Panama or had an office there (my residence), income is generated through my PE and therefore not foreign-sourced. This doesn't quite sound right, though, and would be nice to have some other opinions.

can you point to a good professionals like Lawyer and CPA in Panama

I would also like a recommendation for a trustworthy Lawyer/CPA in Panama. It would be get to get a legal opinion on how my corporate structure would hypothetically work.

I'm also considering Panama's neighbour, Costa Rica. Does anyone have experience living there and how it compares to Panama?

 

[stronco]

Is this 183 days every year, or just the first year to establish yourself as a tax resident? And then it's easier to maintain. Would 183+ days there allow me to get a tax residency certificate?

Tax residency cert is issued with 1 year scope usually.

 

[TopoChico]

Tax residency cert is issued with 1 year scope usually.

Tax residency certificate in panama you will have to apply for through Lawyer and to get it you have to show that you have significant ties in Panama such bank account, property, bills, cars etc. it has to be done every year. Normally the only people that look for it are from high taxed countries for a reason to present a proof that you are a tax resident in Panama it will help you disconnect yourself from tax liabilities in your country of tax origin. Nothing more nothing less in Panama its not needed only for tax authorities outside of panama in majority of the cases.

 

[Deepbarrels]

Panama is one of my candidates for 'new home', so I have some questions too.

Is this 183 days every year, or just the first year to establish yourself as a tax resident? And then it's easier to maintain. Would 183+ days there allow me to get a tax residency certificate?

183 for having to file personal income taxes. Which ever country you spend 183 days a year is your tax residency, even if you're not legally a resident there.

It hasn't been made clear to me yet what 'foreign-sourced' income is. If I lived & worked in Panama full-time for a Panamanian company I own, but all of my customers & business were strictly from OUTSIDE of Panama (e.g. blacklisting the IP of Panamanian visitors to my websites, explicitly laying it out in T&Cs...) would income be considered 'foreign-sourced'?

Yes, I believe so. But if you are living 183 days a year in Panama you'd have to file personal income tax, also when you transfer dividends to yourself there is a small tax to pay, but it isn't clear to me yet if its mandatory or not because 2 different accountants told me opposite things.

Some discussions with various legal professionals hinted that because I worked from Panama or had an office there (my residence), income is generated through my PE and therefore not foreign-sourced. This doesn't quite sound right, though, and would be nice to have some other opinions.

PE?

I would also like a recommendation for a trustworthy Lawyer/CPA in Panama. It would be get to get a legal opinion on how my corporate structure would hypothetically work.

The lawyers that I know don't deal with international corporate structures, it's too fancy and out of their scope. Then the famous firms in Panama City tend to overcharge and are hard to get if you re not a big fish.

I'm also considering Panama's neighbour, Costa Rica. Does anyone have experience living there and how it compares to Panama?

I'm not sure how it compares since the end of the friendy nation program in Panama, but Costa Rica was way more expensive and 10x more complicated. Better to get residency in Panama. The easiest way to get residency in Costa Rica is to invest 150k in Panama (investor program). Then if you have a pension (pensionado 1500$/m from government or the army, something official) then rentista show track record/ proof that you have $2500/m of income coming every month. Then the process will take about 1-2 years to get done, and you'll get temporary residency card. After 2 or 3 years, you can apply for the real residency.

Tax residency certificate in panama you will have to apply for through Lawyer and to get it you have to show that you have significant ties in Panama such bank account, property, bills, cars etc. it has to be done every year. Normally the only people that look for it are from high taxed countries for a reason to present a proof that you are a tax resident in Panama it will help you disconnect yourself from tax liabilities in your country of tax origin. Nothing more nothing less in Panama its not needed only for tax authorities outside of panama in majority of the cases.

So unless the highly taxed country asks for it or challenges your non-residency, no need to get it..

Question for those who live in Panama, what do you invest in and where do you invest? IBRK linked to a Panama persona account? Gold coins? Real estate in Panama? Rate are so high and rents pretty low, last time I looked at it it didn't make much sense. Better to wait for a drop and buy in the US. What are your thoughts?
Please dont tell me crypto..

 

[JackAlabama]

183 for having to file personal income taxes. Which ever country you spend 183 days a year is your tax residency, even if you're not legally a resident there.

did they change that? There was no requirement to file for personal some years ago even if all year around.

Panama divs are local source tho which have wht and then are ok to not be included since wht.

Yes, I believe so. But if you are living 183 days a year in Panama you'd have to file personal income tax, also when you transfer dividends to yourself there is a small tax to pay, but it isn't clear to me yet if its mandatory or not because 2 different accountants told me opposite things.



PE?


The lawyers that I know don't deal with international corporate structures, it's too fancy and out of their scope. Then the famous firms in Panama City tend to overcharge and are hard to get if you re not a big fish.

I'm not sure how it compares since the end of the friendy nation program in Panama, but Costa Rica was way more expensive and 10x more complicated. Better to get residency in Panama. The easiest way to get residency in Costa Rica is to invest 150k in Panama (investor program). Then if you have a pension (pensionado 1500$/m from government or the army, something official) then rentista show track record/ proof that you have $2500/m of income coming every month. Then the process will take about 1-2 years to get done, and you'll get temporary residency card. After 2 or 3 years, you can apply for the real residency.


So unless the highly taxed country asks for it or challenges your non-residency, no need to get it..

Question for those who live in Panama, what do you invest in and where do you invest? IBRK linked to a Panama persona account? Gold coins? Real estate in Panama? Rate are so high and rents pretty low, last time I looked at it it didn't make much sense. Better to wait for a drop and buy in the US. What are your thoughts?
Please dont tell me crypto..

 

[OffshorePirate]

Hello everyone,

I've been considering obtaining residency in another country and Panama has come up on my radar quite a few times. I wanted to reach out to this community to gather some insights and experiences.

1. Costs: Can anyone provide a breakdown or an estimate of how much obtaining residency in Panama would cost?
2. Residency Requirements: I've heard various things about the requirements for maintaining residency status in Panama. How often does one need to return to Panama to keep the residency valid? And is there a requirement to rent or own a property there?
3. Path to Citizenship: If one has Panama residency, is there an option or a clear pathway to eventually obtaining a Panamanian passport? How many years of residency are typically required before one is eligible?
4. Potential Disadvantages: For those who have gone through the process or are well-acquainted with it, are there any disadvantages or potential pitfalls I should be aware of when considering Panama residency?

Any insights, experiences, or advice would be highly appreciated. I want to ensure I have a clear understanding before making any decisions.

Thank you in advance for your time and assistance!

Thanks for the post. I read through the thread and have some questions:

1. How's the health system, mostly public or private ? Working well ? Did you have to purchase a mandatory health insurance ? How much ?

2. What would be the rent cost of a 2 rooms + living room flat in one of the major cities and safe area ? A decent one, not high luxury, let's say in a 10/20 years building equiped.

3. What are the residence requirements in terms of investment for those that don't want to have a business there ? (amount of bank account, property purchase mandatory, etc.)

Thanks

 

[Deepbarrels]

did they change that? There was no requirement to file for personal some years ago even if all year around.

Panama divs are local source tho which have wht and then are ok to not be included since wht.

You don't have to fill personal, unless you'd want to apply for a mortgage or citizenship, from what I know. Maybe you do and it's not enforced, I'm not sure.

 

[darkmode]

183 for having to file personal income taxes. Which ever country you spend 183 days a year is your tax residency, even if you're not legally a resident there.

There are no tax filing requirements if 100% of your income is foreign-sourced. Even if you are actively managing said corporation that generates the foreign-sourced income from within Panama.

It's in Article 694, Titulo 1, Código Fiscal de la República de Panamá

1. How's the health system, mostly public or private ? Working well ? Did you have to purchase a mandatory health insurance ? How much ?

There's public health but it's terrible.

Private healthcare in the city are top notch. There's a lot of medical tourism here. Pacifica Salud is affiliated with Johns Hopkins.

There is no requirement to have health insurance, but, I don't know why you wouldn't get it.

Even if it's just for major things with a large deductible.

2. What would be the rent cost of a 2 rooms + living room flat in one of the major cities and safe area ? A decent one, not high luxury, let's say in a 10/20 years building equiped.

Check here: Apartamentos Panamá | Alquiler de Apartamentos en Panamá, con 2 recámaras o más página 3

Probably ~$1.2K/mo for a 2 bed/2.5 bath overlooking the ocean like this. If you don't care about views, can probably get something decent for even ~$850/mo.

Lots of people retire here.

3. What are the residence requirements in terms of investment for those that don't want to have a business there ? (amount of bank account, property purchase mandatory, etc.)

I moved here before the recent changes requiring investment. However, from what I heard, there's ways around it.

When I did it, you just had to open a bank account to establish ties, deposit $5K, get a bank reference letter, and could take the cash out.

I'll let someone else chime on whose gone through it recently.

 

[scooterguy]

@darkmode Can you give some recommendations to those interested in living in Panama temporarily, maybe 3-6 months? I've been always interested in Panama, but would like to test the waters first.

Areas to stay in, things to avoid, best ways to find short-term apartments for decent prices (besides the usual stuff like Airbnb)? Are there any visas similar to Thailand's ED visa, something that could allow for a more formal stay and maybe the ability to get a personal bank account while there?

 

[humus]

There are no tax filing requirements if 100% of your income is foreign-sourced. Even if you are actively managing said corporation that generates the foreign-sourced income from within Panama.

That is good to know. Most countries can apply PE rules on such income. Are you aware of any other countries, like Panama, which wont tax foreign income when managed from that country?

 

[latindev]

It's in Article 694, Titulo 1, Código Fiscal de la República de Panamá

I just checked that article and it actually talks about pretty specific situations, for example the tax exemption is only for three situations:
- The trade of articles/products outside of the territory only if those have never been in Panama
- The administration of such activity from an office in Panama (it doesn't specify if the office is from the foreign company or a national company)
- The distribution of dividends to people/companies in Panama from the income generated from the two points mentioned before

That's when it talks about trades and when it comes to professional services, it's another different topic and it says:

Si los servicios prestados fuera del territorio nacional no están relacionados económicamente con las actividades gravables que el contribuyente persona natural realiza dentro del territorio nacional, la renta producida se considerará de fuente extranjera.

Which is a little vague because it says that it's considered foreign source if you offer those services outside of the country but it doesn't specify that the services are offered to people outside of the country while you live in the country so is only clear if we talk about foreign products trade (plus they need to be services that you don't offer within the territory)... So yeah, there are situations that are full exempted while others not

 

[Fred]

Very good and constructive conversation here, that's exactly what this forum needs more then ever before in such a fast changing Offshore Environment.

I want to contribute here as well with the 1000s of Conversations with people I had the past 3 years.

For sure it's a personal taste if someone prefers to live in Panama over the UAE or the other way around - every place has it's upside and downside.

However be warned about the costs and limitations when it comes to Bank and Financial Institutions with a Panama Residence!

Have in mind that while you can access with a UAE Residence all Retail Brokers and Financial Institutions like IBKR, Saxo Bank and Swissquote you have no decent Broker available with a Panama Residence or Panama Company.

We even had a couple of former Panama Residents with IBKR or other Bank issues when we then just afterwards figuered out that the Broker rejects the Application with UAE Residence because they tried it once with a Panama Residence or Company.

Just keep this in your mind - all mentioned here is correct - you can get local Panama Bank and use some Offshore Bank in Peuerto Rico to then go International under the mask of the US but that's everything else then Retail Banking for Day to Day Business and other then that I have just seen Liechtenstein Banks charging you an arm and a leg for Broker Services - we are talking 3.5% Custody Fees etc. So imagine you have a 10M$ portfolio they charge you 350k$ p.A.

If you want to live in Panama I strongly advise to keep another Residence on Paper at least for the Banks and Brokers and just have a local Bank Account for local spend or even just a US Bank Account as you pay everything in USD anyway.

 

[latindev]

you have no decent Broker available with a Panama Residence or Panama Company.

I strongly disagree, from Panama you can easily open accounts with IBKR, Saxo Bank (Saxo bank has partnerships with multiple banks in Panama), TD Ameritrade (well now that Schwab is finally merging with them not sure how that will continue so we will need to see in the next month), Tiger brokers (Singapore) if you are a real resident. And that's without counting the local options and I'm pretty sure there are more. All the options I just mentioned are basically free brokers (Saxo bank not really but it's because is Saxo bank) so if you go with wealth management solutions then you even have way more options but probably the experience will be worst and more expensive so no need to go there.

With banks accounts, you can open bank accounts in the US with zero issues (many banks in Panama even have presence in the US too so you can even open accounts there without ever going to the US in case you want to use the same ones from local but there).

The only way you will have issues with foreign entities is if you just want to use Panama as a shell residence (that's also with the UAE and all other places anyways) but if you have real presence in Panama (an office/house, you live there, etc) then you won't have any issues.

The only thing I miss is Transferwise because it was really cheap and is not something that can be used in Panama.

 

[Fred]

I strongly disagree, from Panama you can easily open accounts with IBKR, Saxo Bank (Saxo bank has partnerships with multiple banks in Panama), TD Ameritrade (well now that Schwab is finally merging with them not sure how that will continue so we will need to see in the next month), Tiger brokers (Singapore) if you are a real resident. And that's without counting the local options and I'm pretty sure there are more. All the options I just mentioned are basically free brokers (Saxo bank not really but it's because is Saxo bank) so if you go with wealth management solutions then you even have way more options but probably the experience will be worst and more expensive so no need to go there.

With banks accounts, you can open bank accounts in the US with zero issues (many banks in Panama even have presence in the US too so you can even open accounts there without ever going to the US in case you want to use the same ones from local but there).

The only way you will have issues with foreign entities is if you just want to use Panama as a shell residence (that's also with the UAE and all other places anyways) but if you have real presence in Panama (an office/house, you live there, etc) then you won't have any issues.

The only thing I miss is Transferwise because it was really cheap and is not something that can be used in Panama.

Yes you are right and being as a Country on every existing Shitlist available makes it even more attractive.

Wire money to whatever Bank or Financial Institution in the Western World and see how you get either issues, wire rejected or the bank account straight closed.

Dealt with guys from Mexico, Colombia and Venezuela - when telling them back then they were laughing and saying that even they are from South they would never ever consider it for serious Business and the same goes for Belize, El Salvador and every other South American Shithole.

Live wherever you want to leave but don't tell us here that Panama is a breeze when it comes to sending money around the world.

 

[latindev]

Yes you are right and being as a Country on every existing Shitlist available makes it even more attractive.

Get salty all you want I don't give a s**t cuz I don't live of opening companies for others like you so I don't care if people want to live or not in an specific place.

Wire money to whatever Bank or Financial Institution in the Western World and see how you get either issues, wire rejected or the bank account straight closed.

Pff, I have sent many wires from the US to Panama Banks and not only they don't have issues with but they even clear in less than 24hrs. Tell me you have never sent one wire there without telling me.

Dealt with guys from Mexico, Colombia and Venezuela - when telling them back then they were laughing and saying that even they are from South they would never ever consider it for serious Business and the same goes for Belize, El Salvador and every other South American Shithole.

Right, meanwhile one of Colombia's biggest conglomerate (Avianca Group) is all over Panama and basically all mayor banks in Colombia and Venezuela are in Panama... Heck even Panama had to change the rules for people from Colombia and Venezuela last decade because of many people from there starting business and moving to Panama

Live wherever you want to leave but don't tell us here that Panama is a breeze when it comes to sending money around the world.

I'm not telling you that, I'm just correcting your lies because you are saying that with a residence in Panama you can't have access to those brokers options you mentioned and that's just not true. Take it the way you want I don't care but just don't lie here and then start comparing Panama with Belize or El salvador (that's how much knowledge you have about this region)

 

[JackAlabama]

Get salty all you want I don't give a s**t cuz I don't live of opening companies for others like you so I don't care if people want to live or not in an specific place.


Pff, I have sent many wires from the US to Panama Banks and not only they don't have issues with but they even clear in less than 24hrs. Tell me you have never sent one wire there without telling me.


Right, meanwhile one of Colombia's biggest conglomerate (Avianca Group) is all over Panama and basically all mayor banks in Colombia and Venezuela are in Panama... Heck even Panama had to change the rules for people from Colombia and Venezuela last decade because of many people from there starting business and moving to Panama

Well thats this region within it kinda works, but is not useful for anyone not from there. Also such big corps rarely have any kind of issue but sadly that does not apply for the majority.

I'm not telling you that, I'm just correcting your lies because you are saying that with a residence in Panama you can't have access to those brokers options you mentioned and that's just not true. Take it the way you want I don't care but just don't lie here and then start comparing Panama with Belize or El salvador (that's how much knowledge you have about this region)

While it works for usa, thats just about it. After all panama is quite transparent for them given its history, so usa can just chill and observe whats up.

But, wires to and from eu regarding panama are highly problematic, if they are even executed at all thru the eu correspondence network and not just flat out returned and blocked.
Also in HK you get odd looks and questions with panama residency and wires to/from. Informal talks there yielded its mainly due because the region is known for an infamous trade of certain goods . After all thats what asia cares about, so seems kinda logical.

What can still work depending on standing with a respective bank, is having a panama corp whatever and entities below it thru which banking will be executed.

So to wrap this up, Panama can be a good spot for anyone having an american focus due to great timezone, lifestyle, very close to miami, relative safety (one of the safest if not the safest? (uruguay maybe tops it) country of that continent) and handling usd there not being as problematic as euro or asian currencies.

 

[latindev]

Also such big corps rarely have any kind of issue but sadly that does not apply for the majority.

I know, but my response was to the idea of "no one with a serious business will consider those shitholes" which is just straight stupid since every medium to big business in the region (international companies, not simple companies doing "advising" to people in their country) is using the Caribbean.

Well thats this region within it kinda works, but is not useful for anyone not from there

While it works for usa, thats just about it. After all panama is quite transparent for them given its history, so usa can just chill and observe whats up.

But, wires to and from eu regarding panama are highly problematic, if they are even executed at all thru the eu correspondence network and not just flat out returned and blocked.
Also in HK you get odd looks and questions with panama residency and wires to/from. Informal talks there yielded its mainly due because the region is known for an infamous trade of certain goods . After all thats what asia cares about, so seems kinda logical.

That's what I have said multiple times in this and other threads, that Panama makes sense only depending on the areas where you are going to do businesses with. If is the American continent (North, Center and South) you basically won't face issues while with Asia is a mix (HK giving some issues while some Singapore banks/brokers and of course China are ok with it) and with the EU it was going to give issues, but that also depends because I have clients from the EU but the issue is that they need to "ask for permission" before doing business with a Panama company/resident.

So to wrap this up, Panama can be a good spot for anyone having an american focus due to great timezone, lifestyle, very close to miami, relative safety (one of the safest if not the safest? (uruguay maybe tops it) country of that continent) and handling usd there not being as problematic as euro or asian currencies.

I agree, the only correction is that Chile and Argentina are safer but they have more taxes too.