Panama Eliminating the Corporate Formation Option under its Friendly Nations Visa Program

[Golden Fleece]

Effective August 5, 2021, Panama is making the following changes to its Friendly Nations Visa Program. This is an excerpt from an email that I received today from Panama Relocation Tours.

Current Friendly Nations Visa Program

Currently, you can qualify for the Friendly Nations Visa by meeting any one of the following requirements:

• Get employment at a Panamanian company
• Purchase real estate worth at least $100,000 (can be financed)
• Deposit $5,000 into a Panamanian bank account and form a business in Panama

After applying for a Friendly Nations Visa, you receive a temporary visa while your application is being processed. This typically takes 3-6 months. Then you receive a permanent residency visa.

Once you receive your permanent residency visa, it is no longer necessary to meet the requirements listed above.

The Friendly Nations Visa has been very popular because it has allowed people who do not qualify for the Pensionado Visa to obtain residency at relatively low risk and low cost by forming a business in Panama.
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Changes to Friendly Nations Visa Effective August 5, 2021

Effective August 5, 2021, you can qualify for a Friendly Nations Visa by meeting any one of the following requirements:

• Get employment at a Panamanian company
• Purchase real estate worth at least $200,000 (can be financed)

You will no longer be able to qualify by forming a business in Panama.

After applying for a Friendly Nations Visa, you will receive a temporary visa for 2 years. After 2 years, if you continue to meet the qualifications listed above, you can request a permanent residency visa.

Taiwan is no longer on the list of allowed countries / Friendly Nations.

 

[Martin Everson]

I wonder why they removed the $5k and business formation option?

 

[Golden Fleece]

I wonder why they removed the $5k and business formation option?

It seems that Panama only wants applicants who will definitely contribute to the local economy in some way, either by gaining employment or by buying real estate in Panama. Most people who choose the third option (company formation) often use it as a fallback position for a future residency -- and quickly dissolve their corporation and immediately take their $5,000 out of their bank account as soon as they gain residency. My guess is that Panama is continuing to clean up its international reputation in the wake of several scandals.

 

[botero]

It seems that Panama only wants applicants who will definitely contribute to the local economy in some way, either by gaining employment or by buying real estate in Panama. Most people who choose the third option (company formation) often use it as a fallback position for a future residency -- and quickly dissolve their corporation and immediately take their $5,000 out of their bank account as soon as they gain residency. My guess is that Panama is continuing to clean up its international reputation in the wake of several scandals.

I was one of those people. I had plans to move to Panama and run my business from there but I didn't enjoy the life there. I can see someone around retirement age enjoying the slow paced and relaxed lifestyle, but for me, it wasn't that exciting.

I dissolved my Panamanian corporation after two years since I got tired of paying renewal fees each year. I didn't like that the banks there were outcasts from the global financial system and many services such as Paypal and Transferwise were not connected to Panama's domestic ACH system. I still have two personal accounts there that are still active although there are annual fees for the debit cards. I don't have much use for these accounts now. In the past I used them a lot for crypto trading through localbitcoins.

Apparently if you don't visit Panama every two years the permanent residency expires. I'm not sure if they extended this for covid. I visited back in 2019 so my PR may be expiring soon. I don't think the banks are as vigilant (like those in Dubai) about the residency status of their clients. Furthermore, the PR card (which banks keep a copy of in their files) expire after 10 years of issue. So I doubt they would be bothering me about not being a resident. In either case, I not much of value would be lost for me if I were to lose my banks and/or PR status.

I value my Mexican banks and PR a lot more since Mexico is a lot more trusted and connected to the world.

 

[Golden Fleece]

Apparently if you don't visit Panama every two years the permanent residency expires. I'm not sure if they extended this for covid. I visited back in 2019 so my PR may be expiring soon.

I know that Panama extended the timeline for anyone who had any type of deadline during the period when Panama was closed to international travel during the pandemic, but I do not know whether they added those days to everyone's two-year in-country period. You should contact your Panamanian lawyer and find out.

I would encourage you to keep your Panamanian residency. Life is all about expanding your options, not eliminating them. If Mexico ever experiences an extended period of civil unrest, the peacefulness of Panama might look really good by comparison.

 

[JackAlabama]

I was one of those people. I had plans to move to Panama and run my business from there but I didn't enjoy the life there. I can see someone around retirement age enjoying the slow paced and relaxed lifestyle, but for me, it wasn't that exciting.

I dissolved my Panamanian corporation after two years since I got tired of paying renewal fees each year. I didn't like that the banks there were outcasts from the global financial system and many services such as Paypal and Transferwise were not connected to Panama's domestic ACH system. I still have two personal accounts there that are still active although there are annual fees for the debit cards. I don't have much use for these accounts now. In the past I used them a lot for crypto trading through localbitcoins.

Apparently if you don't visit Panama every two years the permanent residency expires. I'm not sure if they extended this for covid. I visited back in 2019 so my PR may be expiring soon. I don't think the banks are as vigilant (like those in Dubai) about the residency status of their clients. Furthermore, the PR card (which banks keep a copy of in their files) expire after 10 years of issue. So I doubt they would be bothering me about not being a resident. In either case, I not much of value would be lost for me if I were to lose my banks and/or PR status.

I value my Mexican banks and PR a lot more since Mexico is a lot more trusted and connected to the world.

It looks like they might have that extension possible. On the IATA travelmap they write that all expired permits after 13 March 2020 are accepted for entry until June 2021.

So I consider that as long as that covid restriction-nonsense goes on, the time does not count.
By my interpretation of the law there is surely not valid and lawyers should clarify it, which I will have yet to do.

I have been told, after two years you get a two year grace period where your lawyers can compose an excuse why you could not visit and you get it back again.

I also have the Panama cedula since a couple of years already and visited at least yearly, the last time just before covid lockdown.

I spent quite a decent amount of $ while being there for lets say medium-quality service/restaurants/accommodation at best (people are nice and friendly though).
Like you, I did not like it so much being there and found it somewhat boring, empty and hard to meet up with interesting people. I also often felt that being resident there is actually making matters worse when applying for new bank accounts and it seems that this residency is just useful if you really want to live in Panama.

So like you I just entertain the option of letting go of it especially me living in Africa which is quite far.