Relocation intelligence

🇵🇦 Moving to Panama: tax, residency and cost of living

Territorial tax system for expats

Thinking of moving to Panama? Here is the tax, residency, property and quality-of-life picture in plain numbers, with sources.

Key facts

Top income tax
25%
Corporate tax
25%
Capital gains
10%
Wealth tax
No
Inheritance tax
No
Cost of living index
54.3
Safety
4/10
Internet quality
6/10
Visa-free destinations
140
Foreigners can own property
Yes
Residency in
0 months
Citizenship in
0 years

Taxes

Panama taxes only income derived from Panamanian sources. Foreign-sourced income is fully exempt regardless of amount. The top rate on local income is 25%. There is no wealth tax and no inheritance tax. VAT (ITBMS) is 7%.

Residency and visas

Panama offers several popular residency programs: the Friendly Nations Visa (for 50+ countries), Pensionado visa, and Qualified Investor Visa. Permanent residency is relatively straightforward to obtain. No minimum physical presence requirement for most visa categories.

Property ownership

Foreigners enjoy the same property rights as Panamanian citizens for most real estate types. There are no restrictions on residential or commercial property ownership. Some coastal areas fall under special concession-land rules. There is no wealth tax.

Cost of living and quality of life

Panama City features a modern skyline, good internet infrastructure and internationally accredited medical care. Cost of living is lower than Western Europe but higher than neighboring countries. Crime is noticeable in certain areas; expats typically live in safe enclaves. Climate is tropical with high humidity.

Passport and mobility

The Panamanian passport grants visa-free or visa-on-arrival access to approximately 140 countries (Henley Passport Index 2024). Access to EU Schengen is visa-free, but the US requires a visa. Global ranking is mid-tier.

Residency and visas

  • Friendly Nations Visa
  • Pensionado Visa · €1,000/j
  • Qualified Investor Visa · €160,000
  • Short Stay Visa / Remote Worker Visa (Nómada Digital) · €3,000/j
  • Self-Economic Solvency Visa · €300,000

Why people move to Panama

  • Full exemption on foreign-sourced income

    Thanks to Panama's strictly territorial tax system, expats earning foreign-sourced income — dividends, rent, capital gains or pensions from abroad — owe zero Panamanian tax regardless of amount. This makes it especially attractive for digital nomads, investors and retirees.

  • Pensionado visa: lifetime benefits for retirees

    Panama's Pensionado program, administered by the Servicio Nacional de Migración, offers retirees with a lifetime pension of at least USD 1,000/month permanent residency, significant discounts on flights, hotel stays, medical care, restaurants and entertainment, plus a one-time tax exemption on imported household goods.

  • Dollarization and financial stability

    Panama has used the US dollar as legal tender since 1904, eliminating currency risk for expats with USD-denominated income. The country has no central bank printing money, which limits chronic inflation. Panama City is a regional financial hub with a wide offering of international banking services.

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Sources

Other destinations

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