v256.0 · tax residency · PA · verified 2026-04
Panama tax residency
Rules that determine when you become tax-resident in Panama, the headline rates, and any HNW or expat special regime that softens the standard system.
Threshold
183 days/year
Taxation basis
territorial — foreign-source income exempt
Top marginal rate
25% on Panama-source income above $50K
Capital gains
10% on Panamanian asset gains; 0% on foreign-source
Special regime: Friendly Nations Visa + Pensionado
Friendly Nations Visa (~50 countries eligible): residence via $200K real-estate investment OR job offer with Panamanian employer. Pensionado visa: $1K/month proven pension → permanent residence. Foreign-source income exempt under territorial system regardless of regime. Recent tightening: friendly-nations job-offer track replaced direct-deposit pathway since 2021.
Rate landscape
| Dividends tax | 5% local-source / 10% foreign-source |
| Exit tax | No exit tax |
| Tax treaty network | 17 jurisdictions |
| CRS (automatic info exchange) | Active since 2018 |
Recent regime changes (2023-2026)
EU AML grey-list since 2023 — banking due-diligence stricter. FATF grey-list removal pending 2026. Friendly Nations visa tightened: now requires employment OR investment ≥ $200K (no longer just bank deposit).
Strengths
- USD-denominated economy — no currency risk
- Territorial system fully exempts foreign income
- Pensionado at $1K/month is among the world's most accessible retirement visas
- Strategic location for North-South America hub
Drawbacks
- Very small 17-treaty network — limited treaty-shopping options
- EU AML grey-list since 2023 affects banking
- Friendly Nations visa tightened — was easier pre-2021
- Corporate transparency concerns post-Panama Papers continue
Top cities for tax-residency seekers
Panama City Bocas del Toro Boquete
Source: official Panama tax authority page · Last verified 2026-04
See also: full Panama country profile · full tax-residency atlas