Moving to Panama in 2026: pure territoriality, the Pensionado visa and the dollar

Panama applies strict territoriality, and this is the feature that structures its entire services economy. Income of Panamanian source is taxed; income whose source is abroad falls outside the tax base, even when received by a resident.

This rule is long-standing and consistent. It explains the presence of the banking centre, the maritime flag and the service companies, and it remains the main reason retirees and remote workers settle there.

Like any territorial system, it protects the source, not the person. Income derived from a service performed from Panama calls for its own analysis, and the boundary between foreign-source income and locally generated income is the real technical issue in Panamanian cases.

The scale for individuals, published by the Directorate General of Revenue, applies to net taxable income of Panamanian source. The portion up to up to $11,000³ is not taxed; the next tranche, up to $50,000⁴, is taxed at 15%⁵, and the excess at 25%⁶. Companies are taxed at 25%⁷ on their Panamanian-source income.

A specific regime applies to headquarters of multinational groups holding a SEM licence (Law 57 of 2018): the services they provide to entities of their group are taxed at 5%⁸, with exemption from dividend tax, complementary tax and branch tax, subject to transfer pricing rules. It is a group regime, not an option open to an individual who is relocating.

We do not publish the rates applicable to dividends and capital gains: they do not appear in the official sources we have reviewed, and must be verified with the Directorate General of Revenue before any decision involving Panamanian-source income.

Panama has also been the subject of sustained international monitoring in the areas of tax transparency and anti-money laundering. The compliance obligations on local banks have been considerably strengthened as a result: opening an account there is now a documented and lengthy process, contrary to the country's reputation.

For a French national, the rule remains: Panamanian territoriality only takes effect after an effective transfer of tax residence, assessed under the criteria of Article 4 B of the French General Tax Code.

Panama has long been regarded as the most accessible residence in the Americas. It offers several categories, two of which are of particular interest to French nationals.

The retiree, or pensionado

The permanent residence permit as a retiree or pensioner is granted to people entering the territory with a pension of a minimum monthly amount of from $1,000⁹.

This threshold is one of the lowest in the world for a scheme of this kind, and it comes with a set of statutory discounts — on transport, healthcare, entertainment and certain services — which are a concrete benefit, separate from taxation.

The "friendly nations" (Países Específicos)

The real estate threshold often presented as a residence-by-investment route open to all actually falls under the regime for nationals of countries maintaining privileged relations with Panama, governed since Executive Decree No. 226 of 20 July 2021. The applicant must show one economic condition of their choice: a job offer from a Panamanian company, or the purchase of real estate or a term deposit of a minimum amount of $200,000¹⁰.

The National Migration Service first issues a provisional residence of 2 years¹¹, at the end of which permanent residence may be applied for. A qualified investor route, open without any nationality requirement, also exists at markedly higher thresholds; we do not quantify it for lack of a reviewed official source.

The list of countries concerned, which is amended by decree, and the documents required for each option do not appear in full in our extracts: they must be verified with the National Migration Service.

Acquisition by a foreigner is free, without prior authorization, except for land located near the borders. The Panamanian public registry is well structured and titles are clear.

One technical distinction deserves attention: properties with registered title coexist with properties held under so-called possessory rights, which are untitled. The latter sell for less and expose buyers to financing and resale difficulties. Checking the status of the property comes before any negotiation.

The market is dominated by Panama City, which has a large stock of residential towers and whose liquidity depends largely on regional demand. Mountain areas and coasts attract foreign retirees, in narrower markets.

Because real estate underpins one of the residence routes, part of the supply is calibrated just above the applicable threshold. It is advisable to ensure that the value recognised by the administration matches that stated in the deed.

We publish neither Panamanian transfer duties, nor property tax, nor the temporary exemptions applicable to new construction: they do not appear in our sources.

Panama uses the US dollar as its circulating currency, which removes exchange-rate risk for a budget denominated in dollars and makes it directly legible for an international investor.

We do not publish a typical monthly budget: we have not found an official Panamanian series measuring a basket of expenses comparable to that of an expatriate.

Three items shape a budget. Housing, which varies greatly between the towers of Panama City and the provinces. Healthcare, where the private sector in the capital is of a good regional standard but insurance becomes costly with age. And air conditioning, necessary all year round in the lowland areas.

The discounts granted to holders of retiree status are a real counterweight, rarely quantified: they apply to recurring expenses and noticeably improve the budget of an older household.

The country also shows a marked contrast between the capital, highly urban and connected, and the rest of the territory, where services and infrastructure are of a different standard. The choice of location determines lifestyle more than the budget itself.

The country also imposes high import duties on many durable goods, which makes furnishing a home and buying a vehicle more expensive. This item is rarely included in relocation budgets, even though it represents a substantial initial outlay for a household settling for the long term.

1. Choose the category: retiree, "friendly nations" regime or qualified investor, as the conditions are not comparable;
2. gather the civil status and criminal record documents, apostilled and translated — a lengthy step, to be started in France;
3. plan ahead for opening a bank account, which is now lengthy and heavily documented;
4. for a purchase, have the status of the property checked — registered title or possessory rights — before any negotiation;
5. handle the departure from France according to its own criteria, as Panamanian territoriality settles nothing on that side.

The third point is the one that surprises most: the country's long-standing reputation suggests an ease of banking that no longer exists. Processing times and documentation requirements are now comparable to those of a European bank, and sometimes more demanding.

We do not publish processing times: we have no official, dated and quantified source for Panamanian residence permits.

• Territoriality is the central advantage, but it protects the source of the income, not the person who receives it.
• The pension threshold of from $1,000⁹ per month is among the lowest in the world: it is the country's strongest argument for a retiree.
• Property held through possessory rights is not equivalent to a registered title: the distinction is decisive.
• Opening a bank account is a long, document-heavy process: the reputation of the past no longer matches current practice.
• The Panamanian passport opens about 142¹² visa-free: no mobility gain for a European national.

Finally, Panama is a destination where reputation largely precedes present-day reality. Territoriality remains, and it is robust; opacity, however, has disappeared as a result of the international commitments made after the scandals of the previous decade. A Panamanian plan is therefore built today on transparency and documentation, exactly as elsewhere — which remains compatible with a real tax advantage, but rules out reasoning as one would have twenty years ago.