We’ve long maintained that a second residency is one of the easiest ways to internationalize yourself and a key Plan B strategy if conditions deteriorate in the country where you spend the most time.
For me, that Plan B is Panama. I’m a permanent resident there and just returned after renewing my cedula – my national ID document – last month. Once you receive your permanent residency visa, you only need to spend a few days every two years in Panama for it to continue to be valid. But if there’s an SHTF moment in the United States, I can spend as much time as I want there.
In choosing Panama as my personal “bug out” location, I went through a comprehensive evaluation of that country versus several other possible alternatives. In my case, Panama’s biggest edge was needing to visit the country only once every two years and its highly developed infrastructure (especially in Panama City, the nation’s capital).
For instance, Panama has first-class medical care available at a significantly lower cost than the United States. It has an extensive network of private hospitals staffed by physicians trained in the United States, Canada, and Europe. Now that I’m over 65, if Medicare won’t (or can’t) pay for a knee replacement or other non-emergency procedure, I can fly to Panama and have the surgery done in a matter of days at a substantial savings to what I’d pay out-of-pocket in the United States. And since I have a residency permit, I can stay as long as I need to.
Panama is also one of the easiest countries in which to qualify and maintain permanent residence. You can obtain a permanent residence visa through an investment or proof of an income stream.
The visa I acquired in 2013 is called the “Friendly Nations” visa. The United States, Canada, and 48 other countries are considered friendly nations under this option. This visa gives me the right to work, invest, or conduct a business in Panama. When I applied for this visa, you could qualify merely by forming a Panamanian company and depositing $5,000 or more in a local bank account.
When the friendly nations visa was first introduced in 2012, its stated objective was to make it easier for foreigners to work in Panama. The country was experiencing a growing shortage of skilled labor at the time. To obtain a work permit with this visa, all you needed to do was to prove you had a job offer.
However, many people who applied for the friendly nations visa (including myself) had no intention of ever working in Panama, unless their circumstances changed. They simply wanted the visa easiest to qualify for.
But in August 2021, these requirements were tightened considerably. The friendly nations visa requires that you first qualify for a two-year temporary residence visa. This requires that you either have a job offer in Panama or that you purchase real estate valued at $200,000 or more. You can also qualify by purchasing a $200,000 CD at a local bank. Currently, two-year CDs are paying 3% or higher interest at most local banks. Thirty days before the expiration of your temporary residency permit, you can then file an application for permanent residency.
The changes apply to citizens of all friendly nations except Italy, whose citizens qualify for legal residency in Panama under terms of a separate treaty.
The revised conditions, in our view, make the friendly nations visa much less attractive than it once was. Fortunately, there are two other ways to qualify for immediate permanent residency that are open to nearly all nationalities, not just citizens of the 50 friendly nations countries:
Pensionado (pensioner) visa. Acquiring this status requires that you demonstrate proof of pension or annuity income of $1,000 or more monthly. For each additional dependent on your application (e.g., your spouse), you must show an additional pension or annuity income of $200 per month. If your retirement income is more than $1,000 per month but less than $1,200, you can deposit $2,000 in a local account per additional dependent.
Qualified investor visa. This option, which came into existence in 2020, requires a real estate investment of $300,000 in Panama. This threshold will increase to $500,000 in October 2022. Alternatively, you can invest $500,000 in stocks on the Panama stock exchange or $750,000 in a bank CD. It’s also possible to combine these two options. For example, buy a home for $200,000 and open a CD for $100,000.
After five years of legal residency, you can acquire Panamanian citizenship and passport. Physical presence in the country for at least part of this time is required, as is proof of integration within Panama and Spanish language proficiency. One drawback is that Panama doesn’t allow dual citizenship, although this prohibition isn’t stringently enforced.
Even if you don’t opt for citizenship, you’ll want to learn enough basic Spanish to communicate with locals. Getting around in Panama City speaking only English is possible, but outside the major metropolitan areas, you’ll need to speak and understand some Spanish.
All in all, Panama is a great choice to establish a second residency. There are multiple options, and with the recent expansion of its namesake canal, Panama is on a long-term path toward sustainable growth. Barring an economic collapse, Panama’s future appears bright.