Panama is an increasingly popular country for expats, but also for perpetual travelers who want to take advantage of the tax system. Known for its canal, the country has developed significantly in recent years and has rightly become so popular.
But how do you move to Panama, what costs will you incur, and what do I need to consider? All of these questions are answered in this comprehensive article.
First, regarding the advantages of emigrating to Panama. These are diverse, but must nevertheless be weighed individually. Below is an overview of the most important advantages of Panama.
One of the biggest advantages of Panama is definitely Panama's tax system. It is not only attractive for expats, but also for people without a residence (so-called Perpetual Traveler). Because this is a territorial tax system. This means that foreign-sourced income is not taxed. This includes, among other things, capital gains from stocks, dividends, rental income (e.g., from Dubai), or similar. Companies that are headquartered in Panama but conduct their business abroad also do not pay taxes.
Furthermore, there are no taxes on wealth, inheritance, and gifts.
Another advantage of Panama is the currency. The official currency is the US dollar. This is not only easy in terms of theoretical conversion for anyone coming from the eurozone, but also practical in reality, because the US dollar is a global reserve currency and accepted almost everywhere.
Linguistically speaking, Panama is also a country that presents comparatively few hurdles. The official language is Spanish, a relatively easy language to learn. Otherwise, you can also get by with English at certain banks or government offices. In everyday life, however, Spanish is the primary language used. Accordingly, it is recommended to learn some Spanish.
An advantage, but also a disadvantage, of Panama is its location, depending on which perspective you look at it from. After all, Panama is far away from any military conflict in Europe or the Middle East. In addition, from a military standpoint, Panama is protected by the USA and is therefore a relatively safe country.
Generally, the proximity to the USA, especially Miami, is an advantage when it comes to flight connections.
No country is perfect, not even Panama. Accordingly, one should also know the potential negative aspects of the country when it comes to emigration.
Panama is a country that has developed strongly in recent years, but still feels somewhat analog. Especially compared to other expat destinations like Dubai, Singapore, or other major Asian cities, life here is still very non-digitalized. For some, that may also be an advantage.
Anyone who is used to a Mediterranean climate—or is looking for one—won’t be happy in Panama. That’s because the tropical climate is quite different. While it’s pleasantly warm year-round, with daytime temperatures ranging from about 25 to 32 degrees, it gets very humid from April through November. During this rainy season, the humidity in certain regions rises to around 80 %.
Here are the most important requirements for emigrating to Panama.
The first step is to choose the visa you want to apply for. Depending on your initial situation, you have several options here. Below is an overview of the most popular ways to get a visa.
Another point, just like the Emigration to Paraguay is a clean criminal record from the country in which one has lived continuously for the past few years.
In addition to the aforementioned costs and requirements for the visa, ongoing income or assets are of course necessary to live in Paraguay. Since the social system cannot be compared to that of Germany or Austria, one should bring sufficient resources for private doctors, kindergartens, schools, insurance, etc.
The process for emigration naturally depends on the type of visa you choose. However, the general procedure involves the following steps.
The costs of emigrating to Panama are individual and depend on the type and number of visas, as well as personal expenses such as moving containers, etc. Basically, however, in the most common case of emigration involving the establishment of a company, one calculates with about €7,500.
In our experience, emigrating to Panama makes sense for anyone who has an affinity for the Spanish language or the Latin American way of life. This means a warm climate, a slower lifestyle, and lots of sunshine.
Apart from emigration, Panama naturally also makes sense as a compliance residence for frequent travelers or digital nomads for themselves and their own company.
Panama is an exciting country for expats and impresses with an attractive territorial tax system, simple immigration regulations, and a good banking system with the US dollar as its leading currency. Those who prefer a relaxed lifestyle or need a compliance residency will find what they are looking for in Panama.
For over ten years, Clemens has been advising entrepreneurs, investors and families on international company formation, tax strategy and relocation of residency. His focus: legal, bank-compliant structures that hold up in practice, not just on paper.
Articles by Clemens
In recent years, Germany and other EU countries have become increasingly unappealing to high achievers due to political uncertainty, high taxes, and economic problems. Consequently, a growing number of people are emigrat
Malta is a popular tax haven in Europe and is attracting not only tourists, but also a growing number of expats. In addition to the fine weather, attractive tax benefits also draw many entrepreneurs and investors to Malt
In times of economic and political uncertainty, as well as high taxes and the introduction of the Asset registers in the EU , more and more people from Germany are moving abroad.
Schedule a 30-minute conversation with a senior consultant. We answer your questions and work out the best path to your goals.
Clemens Kohlbacher
