Panama

Overview

A territorial tax system attached to a dollarised economy.

Panama is the jurisdiction people reach for when the priority is simplicity. There is no exchange-rate question because the currency is the dollar, the territorial tax basis means foreign-source income is generally outside the net, and several residency routes lead to permanent status on approval rather than after a probationary period.

The Friendly Nations Visa — available to citizens of a defined list of countries including the US, Canada, the UK, Australia and most of the EU — is the workhorse route. It requires an economic tie to Panama, which in practice means employment, real estate, or a fixed deposit. The definition of that tie has been tightened more than once, and the qualifying deposit threshold is the number most often quoted incorrectly.

The Pensionado visa remains the most efficient route for retirees: a demonstrated lifetime pension above the statutory monthly threshold, and permanent residency follows quickly.

The watchout is not tax complexity but documentation and the territorial principle itself. Panama's territorial system is often described as if it exempts everything. It does not. Panamanian-source income is taxed, and the classification of a given income stream as foreign or domestic is a determination that should be made by Panamanian counsel before you move — not after.

How it scores

Editorial scores, 1–5, on a consistent basis across the index. 5 is favourable (low tax, strong mobility, fast, cheap, low presence). They are a comparison aid, not a recommendation, and they weight nothing — that is what the finder does.

Weight these against your own priorities