Panama Friendly Nations Visa 2026: What Changed After Decree 197

The Panama Friendly Nations Visa was for a decade the easiest direct-to-permanent-residency program in Latin America. Nationals of around 50 countries could incorporate a Panamanian company, deposit USD 5,000 in a local bank, and walk out with a cedula E (permanent resident ID) in about four months. That era ended on August 23, 2021.

What Decree 197 of 2021 changed

Executive Decree 197, published in Gaceta Oficial 29356-B, replaced Decree 343 of 2012. The reform took effect after a 90-day grace period in late 2021. Applications filed under the old rules before the cutoff were grandfathered; every application filed in 2026 follows the new framework.

The three current qualifying paths

Post-reform, you must establish one of three specific ties to Panama. "Incorporating a local company" is no longer one of them.

Path 1: Employment with a Panamanian company

• Signed labor contract with a Panamanian employer registered with MITRADEL (Ministry of Labor)
• Employer files an application for a matching work permit
• Salary must meet the applicable minimum for the position
• Extends to spouse and minor children as dependents
• Permit revoked if employment ends during the 2-year provisional period

Path 2: Real estate investment of USD 200,000+

• Property titled in the applicant's personal name (not a company)
• USD 200,000 minimum market value; bank financing allowed, but the applicant's unencumbered equity must be at least USD 200,000
• Can be residential, commercial or raw land
• Multiple properties can be combined to reach the threshold
• Must be maintained through the provisional phase and the permanent residency application

Path 3: Fixed-term bank deposit of USD 200,000+

• Deposit in a Panamanian bank licensed by the Superintendencia de Bancos
• Minimum 3-year fixed term
• Held in the applicant's personal name, unencumbered, not pledged
• Must remain intact through provisional + permanent phases
• Interest earned is Panama-source income and taxable locally; principal is not

Full 7-year timeline to citizenship

2026 cost breakdown

Eligible countries (50+)

The list has not shrunk post-reform. Most English-speaking expat passports qualify:

• North America: USA, Canada
• UK and Ireland
• EU member states (all 27)
• European non-EU: Switzerland, Norway, Iceland, Liechtenstein, Monaco, San Marino
• Oceania: Australia, New Zealand
• East Asia: Japan, South Korea, Singapore, Hong Kong, Taiwan
• Middle East: Israel, UAE
• Latin America: Argentina, Brazil, Chile, Mexico, Uruguay, Paraguay, Peru, Costa Rica
• Plus: South Africa, Serbia, Montenegro

Panama tax bonus: territorial system

Once resident, you pay Panamanian income tax only on Panama-source income. Foreign salary, foreign dividends, US Social Security, 401(k) distributions, foreign rental income and foreign capital gains are exempt from Panamanian tax under Articles 694-701 of the Fiscal Code. This is the single biggest reason expats pick Panama over Costa Rica or Colombia.

How to check the current rules yourself

The single most useful habit with this visa is going back to the decree text rather than to a law-firm summary of it. Executive Decree 197 of 2021 was published in Gaceta Oficial 29356-B, and the Gaceta archive is public and searchable, so you can confirm for yourself which paths survived the reform and which did not. The Servicio Nacional de Migracion then publishes the operational requirement list for each permit category, which is where document formats, apostille rules and dependent paperwork actually live. The eligible-nationality list is published on the same site and is the only version worth trusting.

Two comparisons are worth making before you commit. If you can clear the higher investment bar, the Qualified Investor route reaches permanent residency far faster and without the two-year provisional phase described above. If your income is a lifetime pension rather than capital, the pensionado permit skips the investment question entirely and asks for a much smaller monthly figure. And whichever route you take, the reason most applicants choose Panama at all is the territorial tax treatment of foreign income, which is worth understanding before, not after, you file.

1. Confirm your nationality is still on the eligible list on the Migracion site on the day you file, not the day you started researching.
2. Pull the requirement sheet for the specific path you are using (employment, real estate or deposit) and match every document format to it.
3. Have the underlying instrument ready in the form the decree describes: a registered employment contract, a titled property, or a fixed-term deposit certificate.
4. Diary the provisional expiry date the day the provisional card is issued. The permanent conversion is filed against that date.