The Panama Friendly Nations Visa, after the 2021 reset.

Panama's Friendly Nations Visa is no longer the program that built its reputation. Between 2012 and 2021 it offered residency in Panama City for a $5,000 deposit, two utility bills, and a stamp at a notary. Forty thousand applicants used it. In 2021 the government reset the rules. The deposit went up, the path stretched out, and the friendly nations list survived only as a filter for who can apply at all. This is the 2026 version, in plain numbers.

The old visa, the new one, and the gap between them

The original Friendly Nations Visa, signed by Executive Decree 343 in 2012, granted permanent residency on first application to citizens of 50 listed countries. Required proof: a $5,000 bank deposit at a Panamanian bank, plus economic activity defined loosely as a local company registration or a job letter. Processing finished in three to four months. By 2020 it was the single most used residency route in Latin America for North Americans and Europeans, with 35,000 cards issued.

Executive Decree 197, signed 7 May 2021, replaced it. The 50 nationalities still apply but the conditions hardened. The starting status is now two year provisional residency, not permanent. Real economic ties are required, not the older loose definition. Permanent residency comes only after the provisional period, after a successful in country review. Citizenship still sits at five years total in country, the same as before.

For applicants from the 50 friendly nations, including the United States, Canada, United Kingdom, Germany, and most of the EU, the program still exists. It just costs more, takes longer, and screens applicants more carefully. The reset was driven by Panamanian banking sector pressure and Financial Action Task Force review concerns. Both are documented in the Ministry of the Presidency's 2021 explanatory note attached to the decree.

The 50 nationalities, still eligible

The friendly nations list remains intact. It includes Germany, Andorra, Argentina, Australia, Austria, Belgium, Brazil, Canada, Chile, Costa Rica, Croatia, South Korea, Cyprus, Denmark, Slovakia, Spain, Estonia, the United States, Finland, France, Greece, Hungary, Ireland, Israel, Japan, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Mexico, Monaco, Montenegro, Norway, New Zealand, the Netherlands, Paraguay, Poland, Portugal, the United Kingdom, the Czech Republic, Serbia, Singapore, South Africa, Sweden, Switzerland, Taiwan, San Marino, Hong Kong, and Uruguay.

Two notable absences: nothing in Africa beyond South Africa, and nothing from South Asia. Citizens of India and China still apply through the Specific Countries route, which uses different rules and is not covered here. Dual citizens with any of the 50 passports can apply on that passport. Spouses and children under 25 piggyback on the principal applicant.

Real estate, fixed deposit, or local employment

Decree 197 narrowed the qualifying economic ties to three. Pick one.

Path 1, real estate purchase, $200,000 minimum

Purchase Panamanian real estate worth at least $200,000 in your own name. The property can be residential, commercial, or land. Mortgages are allowed but the registered value at the public registry must hit $200,000. Joint title with a spouse counts when the spouse joins the application. The property has to remain registered to the applicant through the two year provisional period, which is verified at conversion to permanent status.

Real estate is the most common path for retirees and remote workers. Median 1 bedroom apartment prices in Panama City sit at $185,000 in Costa del Este, $220,000 in San Francisco, and $310,000 in Punta Pacifica according to the 2025 ACOBIR market report. For comparison purposes against alternatives like the Portugal D7 or Uruguay residency, the upfront capital required here is much higher than in Portugal but on par with Uruguay.

Path 2, fixed term deposit, $200,000 minimum, three year term

Place a $200,000 fixed term deposit at a Panamanian bank, locked for three years, in the applicant's name. The certificate must be unencumbered, meaning no loan can be drawn against it. Interest rates on three year USD CDs at Panamanian banks ran from 3.25 to 4.5 percent in early 2026, so the realized return over the lock period covers most of the application costs.

This path is favored by applicants who do not want to take currency or property risk. Panama uses the US dollar as legal tender, so the deposit holds dollar value without conversion. Compared to Georgia's residency or Cyprus permanent residency, the capital lock is steeper but the underlying currency is more stable than the Georgian lari or the euro for a saver based in the United States.

Path 3, local employment, real contract

A signed local employment contract with a Panamanian company registered at the Ministry of Labor. The contract must show a monthly salary at or above $850, the position must be one not reserved for Panamanian nationals, and the employer must hold a valid work permit quota slot. 10 percent of Friendly Nations applicants use this path in practice, mostly intra company transfers and fully remote companies with a Panama legal entity.

What you actually pay

Total cash out for a single applicant taking the real estate path: $200,000 property plus $9,000 in fees and legal work, plus an extra $2,000 to $3,000 to add a spouse. Total cash committed via the fixed deposit path: $200,000 locked plus the same $9,000 in fees, with the deposit returning interest of $19,000 to $27,000 across the three year lock at current rates.

Money in and out is easiest through a Wise multi currency account, which handles USD to PAB at the spot rate without conversion fees. Domestic Panamanian banks accept Wise wires at par. For comparison against living costs covered in our Panama City cost report, this fee stack equals four months of an upper middle income local salary.

From first wire to permanent card, month by month

Panama's actual processing time, end of 2025, ran 6 to 12 months from filing to provisional card. The slowest step is not the immigration office but the document chain in the applicant's home country, which legal teams flag in every intake call.

• Month 1. Engage Panama counsel, sign power of attorney. Begin collecting home country FBI background check or equivalent, marriage certificate, and birth certificate. All require apostille.
• Months 2 to 3. Wire $200,000 for property purchase or open the certificate of deposit. Receive certified copies for the file.
• Month 4. Enter Panama on a tourist stamp, run the medical exam, register fingerprints at the Migration office, file the application.
• Months 5 to 9. Migration review. Expect one or two minor document requests in writing. A second in country visit is sometimes required.
• Months 10 to 12. Provisional card issued, valid two years. The cedula E (foreign resident ID) typically follows within 60 days.
• Year 2, month 22. File for permanent residency conversion. Approval in 30 to 90 days. Permanent residency card valid 10 years.
• Year 5. Eligible to apply for naturalization. Spanish language test, civic exam, and continuous residency proof required.

Panama's territorial system is real, with edges

Panama taxes only Panama source income. Foreign source income, including dividends, capital gains, rental income, and salary paid from abroad, is not taxed by Panama. This is the simplest tax draw of the program and it survives the 2021 reset untouched. Local source income is taxed on the standard Panamanian progressive scale, which runs from 0 percent up to $11,000 a year, 15 percent up to $50,000 a year, and 25 percent above that. Corporate income tax is 25 percent.

The edges. Panama categorizes "source" by where the activity is performed, not where the payer sits. If you live in Panama and remote work for a US client, Panama generally treats the income as foreign source, but Panamanian tax counsel will want to see a clean structure, usually billing through a US LLC or an offshore entity rather than an unincorporated freelance arrangement. The tax review covered in our easiest residency comparison goes deeper on this versus UAE and Portugal.

US citizens still owe US federal tax on worldwide income regardless of Panama residency. The Foreign Earned Income Exclusion at $130,000 in 2026 covers most remote salaries, but US LLC owners pay self employment tax through the totalization gap unless they qualify for the foreign housing exclusion or use the Panama corporate path.

The friction step

Panama tightened bank account opening after the 2016 Panama Papers leak and again under the 2020 to 2022 FATF gray list period. Panama exited the gray list in October 2023. Account opening in 2026 is workable but slow.

Expect 30 to 45 days from first appointment to active account. Documents required: passport, residency card or filed application, two bank references from your home country issued in the last 60 days, professional reference letter, source of funds documentation, and a $1,000 to $5,000 minimum opening deposit depending on the bank.

Banks that actively serve new foreign residents in 2026: Banco General, Banistmo, MultiBank, and BAC Credomatic. Avoid neobank only setups for the first year because some private property registries and the Ministry of Labor will not accept a foreign only banking footprint as proof of economic ties. A Wise account alongside a Panamanian local account is the workable combination most expats settle on.

Private cover is mandatory, public is open

Friendly Nations residents are eligible for the public Caja de Seguro Social system, but the public hospital network has long waits and is rarely used by foreign residents outside of emergencies. Private insurance is standard. A 40 year old non smoker pays $1,400 to $2,100 a year for a high deductible international plan. SafetyWing's Nomad Insurance covers gap periods during the application phase. For permanent residents the typical move is to a full international plan with United States coverage capped, which runs $2,800 to $4,200 a year through providers like Allianz Care or Cigna Global. Our broader expat health insurance comparison covers the trade offs.

The verdict

Strong fit. Retirees with $250,000 plus in liquid capital who want US dollar denominated assets and territorial tax treatment. Remote workers from EU countries who want a path to a second passport in five years without learning a new currency. Owners of one US LLC who can route foreign source income cleanly and want a base in the Americas time zone.

Weak fit. Anyone trying to use Panama as a cheap residency play. The 2021 reset killed that case. The $200,000 commitment, plus legal fees and the slow account opening, mean Panama only beats Portugal, Spain, or Uruguay when the territorial tax treatment matters to your specific income mix. If you do not have foreign source income to protect, Portugal's D7 at a $36,000 passive income threshold costs less upfront and gives you EU access. If you want speed and lower capital, Paraguay's residency at a $5,500 deposit is the closer comparison.

Panama still works. It is no longer the easy answer.

Practical first steps

Read our adjacent guides on Uruguay residency and Costa Rica's Rentista visa for the closest direct comparisons. If Panama still wins on your numbers, check the Panama City profile for monthly cost of living, the Panama country page for full national context, and our best cities for retirees ranking for similar low tax destinations.

For tax questions specific to your structure, engage Panamanian counsel and a US or home country tax adviser in parallel. A Panama only opinion is incomplete without the matching home country review, particularly for US persons subject to FBAR and FATCA reporting.