➡ WHAT ARE THE FINANCIAL REQUIREMENTS?
Minimum annual income of $36,000 USD.
➡ HOW LONG CAN YOU STAY?
You are allowed to live and work in Panama for 9+9 months.
➡ WHO IS ELIGIBLE?
Anyone who works remotely either as independent freelancer or remote work employee.
➡ HOW MUCH DOES IT COST?
$300 in total for both the application fee and the visa card issuance.
➡ HOW MUCH WILL YOU PAY IN TAXES?
0% tax from income earned outside of Panama.
Nomad Visa Panama 2024
On May 7th, 2021, the government of Panama introduced a new visa category through Executive Decree 198, specifically designed for remote workers and digital nomads. This initiative aims to boost tourism by attracting foreign nationals who are employed by companies based outside of Panama or who are self-employed, enabling them to live and work in Panama remotely.
This short-term visa is valid for an initial period of 9 months and can be extended once for an additional 9 months. To qualify, applicants must either be remote employees of foreign companies or independent freelancers and business owners. Regardless of the employment category, all applicants must meet several criteria:
- Hold a valid work contract with a foreign company or demonstrate status as an independent freelancer.
- Conduct all work remotely for businesses not operating within Panama.
- Earn a minimum annual income of $36,000 from remote work.
Application Process for the Panama Digital Nomad Visa
Applying for this visa involves a straightforward, yet structured process that requires the assistance of an immigration lawyer in Panama:
Step One: Document Collection
Applicants need to compile the following documents:
- A completed application form.
- Three recent passport-size photographs.
- Certified copies of the passport.
- Valid medical insurance covering stays in Panama.
- A clean criminal record certificate.
- A health certificate.
- An affidavit stating that the applicant will not accept local job offers in Panama.
- Proof of a minimum annual income of $36,000, supported by bank certification and authenticated bank statements.
- Documents confirming the intent and ability to fund return travel after the visa expires.
Additional Documentation
- For employees: Documents detailing role, functions, monthly income, and work modality.
- For self-employed individuals: Evidence of business registration outside Panama, along with a sworn declaration detailing business activities, services offered, client nature, and financial projections.
Step Two: Application Submission
Complete the necessary application form, which can be obtained from your lawyer.
Step Three: Payment of Fees
The application process involves specific fees:
- A $250 fee payable to the National Immigration Service.
- A $50 fee for the visa card issuance.
Step Four: Await Approval
After submission, the approval process generally concludes within 30 days, during which applicants will receive a letter of approval from the authorities.
How much does it cost?
The total cost for the visa application sums up to $300, covering both the application fee and the visa card issuance. It is essential to account for potential legal fees payable to the immigration lawyer assisting with the application, which can vary.
This new visa category not only facilitates a conducive environment for digital nomads but also positions Panama as a desirable location for global remote workers seeking a scenic and culturally rich workspace.
Paying Taxes as a Digital Nomad in Panama
Digital nomads in Panama benefit from the country’s territorial tax system, which means that income earned outside of Panama is not subject to Panamanian income taxes. This policy is particularly advantageous for digital nomads who earn their income from foreign sources, as it exempts them from paying local income taxes.
For digital nomads who spend more than six months in Panama, there is the option to apply for tax residency. Achieving tax residency in Panama could potentially help you avoid paying taxes in your home country, depending on the tax treaty agreements and the foreign earned income exclusion rules applicable in your home country. However, it is essential to consult with a tax advisor to understand fully how your tax obligations would change with Panamanian tax residency.
Personal Income Tax Rates in Panama
If you do earn income from sources within Panama, the following tax rates apply:
- Annual income up to $11,000: 0% tax rate
- Annual income over $11,000 to $50,000: 15% tax rate
- Annual income over $50,000: Progressive rate, where the first $50,000 is taxed at 15%, and any income above that at 25%
Panama does not levy net worth, inheritance, estate, or gift taxes, making it an attractive destination for wealth management and estate planning. This tax policy simplifies the financial planning process for expatriates and digital nomads residing in Panama, providing clarity and certainty regarding their long-term financial obligations.