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

[Billybob69]

Anybody done the (Panamanian) residency through employment by own company? Pro's/Con's? Any experiences?
Anybody knows about the total price once having the permanent residency card in hand?

I've been told by a law firm in Panama that you have to hire something like 8 Panamanian employees for each foreigner you hire, I haven't been able to verify this online but something to be aware of...

 

[latindev]

I've been told by a law firm in Panama that you have to hire something like 8 Panamanian employees for each foreigner you hire, I haven't been able to verify this online but something to be aware of...

It actually depends on the structure, for example if you go with the company investment route (160k in a business) you need to hire 5 locals and at least pay them a minimum wage for 2 years... On the other hand you can also ask for residency if you're an employee of a business but being a foreigner you can only be part of up to 15% of the work force so you will need to hire more people.

If someone is going to Panama, just invest 300k and enjoy the peace of mind of not needing to do anything else. All other schemes are overcomplicated

 

[Radko]

If someone is going to Panama, just invest 300k

$200K for friendly nations, $300K for others, for a total of 3 years.

The best visa is the retiree visa. I believe you only need a pension of $1000 per month to qualify, it comes with discounts!

 

[OCT2023]

$200K for friendly nations, $300K for others, for a total of 3 years.

The best visa is the retiree visa. I believe you only need a pension of $1000 per month to qualify, it comes with discounts!

Panama Italy Treaty can get you an instant Permanent Residency for around $5,000 ... if you have Italian Citizenship

 

[latindev]

$200K for friendly nations, $300K for others, for a total of 3 years.

The best visa is the retiree visa. I believe you only need a pension of $1000 per month to qualify, it comes with discounts!

Yeah but I'm afraid most people here are not in the friendly nation list so that's why I didn't mention it. I'm in the friendly nation list and I didn't even need to do the investment, I just got a mortgage with a bank for a property priced over the mark and that's it.

One thing about the pension visa: it needs to be certified by a pension manager so you can prove it's a lifetime pension... Which btw if we follow the 4% rule that's a 300k investment, the 40k mortgage is still cheaper (20% downpayment) if you're in the friendly nations list

 

[Radko]

, I just got a mortgage with a bank for a property priced over the mark and that's it.

So got a mortgage from a Panamanian bank? How does that work, do you still need to borrow $200K if you are from a friendly nation? Or do you need to borrow 20% of the $200K, which is $40K?
I'm from a friendly nation, so I'm interested.

 

[latindev]

So got a mortgage from a Panamanian bank? How does that work, do you still need to borrow $200K if you are from a friendly nation? Or do you need to borrow 20% of the $200K, which is $40K?
I'm from a friendly nation, so I'm interested.

Yeah you need to get a mortgage of a Panamanian bank for at least $200k, most banks will ask you for a downpayment of 20% so that's an initial investment of $40k, the rest you pay it in 15-20 years (most banks don't give 30yr mortgages to foreigners). You can do the process either as a natural or as the beneficiary of a Panamanian private foundation (but be aware that it's harder to get the mortgage that way, better to do it as a natural).

 

[Radko]

Yeah you need to get a mortgage of a Panamanian bank for at least $200k, most banks will ask you for a downpayment of 20% so that's an initial investment of $40k, the rest you pay it in 15-20 years (most banks don't give 30yr mortgages to foreigners). You can do the process either as a natural or as the beneficiary of a Panamanian private foundation (but be aware that it's harder to get the mortgage that way, better to do it as a natural).

Thanks!

Any idea if someone forms a company in Panama, and that company employs you, how much does it cost? If I'm not mistaken you would need to pay social security and maintain the company active until you get the permanent residency. This might be another option where you don't need to buy a property, or have to deposit $200K-$300K in bank for 3 years.

 

[Billybob69]

Thanks!

Any idea if someone forms a company in Panama, and that company employs you, how much does it cost? If I'm not mistaken you would need to pay social security and maintain the company active until you get the permanent residency. This might be another option where you don't need to buy a property, or have to deposit $200K-$300K in bank for 3 years.

I mentioned above that I have been told you need to hire multiple Panamanians for this to work, sorry I can't remember the exact number. Alternatively, I believe some service providers may provide you with something similar to a "sponsored work permit" where they "hire" you, I have no idea how straight forward, expensive or legal this is however. I sure wish we could bring back the days of getting permanent residency for $5000 - what a deal that was!

 

[xnpu]

Thanks!

Any idea if someone forms a company in Panama, and that company employs you, how much does it cost?

I'm in this now.

If you add up lawyer, CPA, immigration, company, taxes on your "salary", etc. you quickly get to 10-12K. It's definitely one of the more expensive routes, but the company+work-permit allow you to get into business locally if you like and your 200/300K won't be stuck if at any point you decide Panama is not for you afterall. There's no need to hire any Panamanians unless you want to hire foreigners other than yourself.

Disclaimer: I'm from a friendly nation and still in the 2-year provisional phase, so I don't know if this will truly end well. As 3 separate law firms offered me this route I'm fairly confident that it will.

 

[latindev]

I'm in this now.

If you add up lawyer, CPA, immigration, company, taxes on your "salary", etc. you quickly get to 10-12K. It's definitely one of the more expensive routes, but the company+work-permit allow you to get into business locally if you like and your 200/300K won't be stuck if at any point you decide Panama is not for you afterall. There's no need to hire any Panamanians unless you want to hire foreigners other than yourself.

Disclaimer: I'm from a friendly nation and still in the 2-year provisional phase, so I don't know if this will truly end well. As 3 separate law firms offered me this route I'm fairly confident that it will.

Make sure they are telling the correct information: https://www.migracion.gob.pa/images/img2023/pdf/02.INVERSIONISTA_MACRO_EMPRESA.pdf Panamanian law has always said you need to show the proof for:
```
Copia autenticada por la CSS de la planilla, con un mínimo de cinco (5)panameños por solicitante, devengando el salario mínimo establecido por ley, de acuerdoa la región y rubro. La misma debe corresponder a uno de los pagos efectuados dentro delos tres meses anteriores al mes de presentación.
```

Unless they are telling you to go with a special zone business (which in some cases could be just 3 or none depending on the type of business), so be careful you're not doing the expenses for nothing if the case is that you will get rejected.

Btw if you're in the friendly nations list and don't want to get the funding tied... Then why not just investing 200k in fixed terms with banks for 3 years and you get your permanent residence? No need for extra expenses and you will get your funds back plus a 5% APY (avg current rates)

 

[xnpu]

Ah. I overlooked the investors visa. That's not the path I'm following though. Mine is an employment visa (which may be restricted to friendly nations?) and the company merely serves to employ me.

 

[Radko]

Ah. I overlooked the investors visa. That's not the path I'm following though. Mine is an employment visa (which may be restricted to friendly nations?) and the company merely serves to employ me.

Best of luck with the process.

 

[frankx1]

There's lots of misconceptions about Panama. I've been living out of Panama for ~4 years and happy to answer any questions.

There's misconceptions about the city not being safe. This is total bulls**t. Panama is safe. I drive a supercar and wear a $10K watch at all times. I am an obvious foreigner. Never been robbed. I feel safer here than in the U.K.

I have a unique perspective having lived in U.A.E., the Caribbean's, and now in Panama.

Pros:
- Cheap to live: full-time maid is ~$500/mo, unlimited data plan ~$100 per YEAR (~$8/mo!), Uber is ~$3-5 max, etc.
- Zero tax on foreign-sourced income. There aren't even filing requirements if your income is all abroad. Panama has a specific exclusion so that foreign-sourced income is exempt even if the mind and management here
- You don't have to live in Panama to maintain residency. Just a visit every 2 years is sufficient
- Warm weather year-round. We have dry and wet season only. Can be a bit humid for some but I love the weather
- Developed city with great infrastructure: Internet is reliable and fast, cellular service everywhere, etc.
- The best beaches, mountains, islands and nature just 1-2 hours from the city
- Lots of (paid) women. If you want to get laid, you will get laid with little to no effort
- None of the bulls**t censorship like UAE with banned websites, WhatsApp calls not working (forced to use Botim), etc. No fear of getting deported from the country for offending an Emirati
- You have lots of banks, including major international ones: Citibank, Scotiabank, etc.
- Same time zone as the U.S. markets + close proximity
- Can bribe everyone so no speeding tickets etc.
- Path to citizenship in 5 years
- No extradition of citizens

Cons:
- You can get by without speaking Spanish (not hard to learn), but it's uncomfortable. I didn't speak a word when I landed in Panama and still had a great time
- If you wire money into Panama, the sending bank will likely flag the transaction. I had my banking in place before arriving in Panama and kept it that way. Out of an abundance of caution, I typically don't like keeping bank accounts where I physically live. I just use credit cards for local expenses and withdraw cash from ATMs when (rarely) needed
- Relatively far from Europe. We have direct flights to some European cities like Madrid but 10+ hours
- Expat population is small and concentrated
- Very few good food options

I am probably missing a few things, so feel free to ask.

- Zero tax on foreign-sourced income. There aren't even filing requirements if your income is all abroad. Panama has a specific exclusion so that foreign-sourced income is exempt even if the mind and management here

Could you explain this a little further? (Maybe any specific law?) For example running a US LLC from Panama would be "officially" tax-free in Panama, even if there is a clear PE?

 

[xnpu]

I think most people arrive at this conclusion due to Codigo Fiscal, article 694.

Artículo 694.- Renta Gravable - Objeto de impuesto.
Es objeto de este impuesto la renta gravable que se produzca, de cualquier fuente, dentro delterritorio de la República de Panamá sea cual fuere el lugar donde se perciba.

Contribuyente, tal como se usa el término en este Título, es la persona natural o jurídica, nacionalo extranjera, que perciba la renta gravable objeto del impuesto.

Parágrafo 1.-Se considerará producida dentro del territorio de la República de Panamá, la rentaproveniente del trabajo personal cuando consista en sueldos y otras remuneraciones que el Estadoabone a sus representantes diplomáticos o consulares o a otras personas a quienes encomienda larealización de funciones fuera del país.

Parágrafo 2.-No se considerará producida dentro del territorio de la República de Panamá, larenta proveniente de las siguientes actividades:

a) Facturar, desde una oficina establecida en Panamá, la venta de mercancías o productos por unasuma mayor de aquella por la cual dichas mercancías o productos han sido facturados contra laoficina establecida en Panamá siempre y cuando que dichas mercancías o productos se muevanúnicamente en el exterior.

b) Dirigir, desde una oficina establecida en Panamá, transacciones que se perfeccionen, consumano surtan sus efectos en el exterior; y

c) Distribuir dividendos o participaciones de personas jurídicas, cuando tales dividendos oparticipaciones provienen de rentas no producidas dentro del territorio de la República de Panamá,incluyendo las rentas provenientes de las actividades mencionadas en los literales a) y b) de esteParágrafo.

El Organo Ejecutivo establecerá las normas y procedimientos para determinar la porción de larenta total que se considerará renta gravable del contribuyente que perciba rentas gravablesademás de las rentas exentas a que se refiere este Parágrafo, dentro de un término no mayor deseis (6) meses.

Beyond the examples included in the law itself, I don't find it very straight-forward to be honest. Best consult a lawyer about your specific situation.

 

[jafo]

Best consult a lawyer about your specific situation.

Do NOT do this in Panama! You will get 100% in trouble!
Been there and done that! Stay the f*ck away from lawyers down there!

 

[frankx1]

Do NOT do this in Panama! You will get 100% in trouble!
Been there and done that! Stay the f*ck away from lawyers down there!

Well, thats not good. Could you go into a little bit more detail what they could/would do and what to take care of when needing to get legal help in Panama?

 

[jafo]

Well, thats not good. Could you go into a little bit more detail what they could/would do and what to take care of when needing to get legal help in Panama?

Stay away from trouble and disputes in Latin America. The corruption is endemic.

Let me know if you need names of whom to avoid in Panama!

 

[Deepbarrels]

Stay away from trouble and disputes in Latin America. The corruption is endemic.

Let me know if you need names of whom to avoid in Panama!

I do, could you please pm me asap? I think I remember you mentioning a law firm in the past that were a bit expensive but you were satisfied with.

 

[Deepbarrels]

There's lots of misconceptions about Panama. I've been living out of Panama for ~4 years and happy to answer any questions.

There's misconceptions about the city not being safe. This is total bulls**t. Panama is safe. I drive a supercar and wear a $10K watch at all times. I am an obvious foreigner. Never been robbed. I feel safer here than in the U.K.

I have a unique perspective having lived in U.A.E., the Caribbean's, and now in Panama.

Pros:
- Cheap to live: full-time maid is ~$500/mo, unlimited data plan ~$100 per YEAR (~$8/mo!), Uber is ~$3-5 max, etc.

Can you share which company you are using for this data plan?

- Zero tax on foreign-sourced income. There aren't even filing requirements if your income is all abroad. Panama has a specific exclusion so that foreign-sourced income is exempt even if the mind and management here

Can you share a reliable source about management being in Panama because I heard otherwise from various other people

- Very few good food options

I am probably missing a few things, so feel free to ask.

100% agree... Food ain't that cheap for what it is. Any good restaurant to recommend in PC / David?