IMPORTANT – Law 526 of 2026: Economic Substance Requirements for Foreign-Source Passive Income

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Category: Inmigration

  • Permanent Work Permit in Panama

    PERMANENT WORK PERMIT IN PANAMA

    Who are eligible to apply?

    Foreigners with ten (10) years or more of legal residence in Panama may apply for an Permanent Work Permit.

    The ten-year period is counted from the date of the resolution issued by the National Immigration Service granting the Provisional Residence Permit.

    In addition to the general requirements, the applicant must submit:

    • An Immigration Movement Certificate.
    • Any of the following documents:
      • Employment letter and Social Security Fund (CSS) registration record.
      • Income Tax Return.
      • Business License (Notice of Operation) in a personal capacity.

    When a foreigner enters the country as a “minor,” the ten-year period is counted from the date of entry into the national territory, which must be established by the Certificate of Migration Status, including the general requirements.

    This permit is classified as equivalent to local labor, meaning that hiring such individuals does not count toward the foreign worker quotas established by the Labor Code. Therefore, for employment and payroll purposes, the holder of an Indefinite Work Permit is treated similarly to a Panamanian worker.

    Main Benefits

    The following are the main benefits:

    • It does not count toward the company’s foreign worker quota.
    • It expands employment opportunities.
    • It provides greater freedom in the workplace, as it is not tied to a specific employer.

    Limitations

    It is important to point out that even if considered local labor, the foreigner may not practice professions reserved by law exclusively for Panamanian nationals, nor those that require professional qualifications that they cannot legally obtain.

  • Panama: A Country That Delivers – Off the EU Grey List and Moving Forward

    Panama: A Country That Delivers – Off the EU Grey List and Moving Forward

    Panama: A Country That Delivers

    Panama has taken a firm and decisive step toward strengthening its international reputation. Thanks to the collaborative efforts of both the public and private sectors, the country has gained the trust of international oversight bodies. The result? Panama is officially off the European Union’s grey list!

    Off the FATF Grey List: A Major Technical Milestone

    In October 2023, Panama was removed from the Financial Action Task Force (FATF) grey list, after demonstrating full compliance with the 40 recommendations issued by this international body. These guidelines aim to prevent money laundering, terrorist financing, and the proliferation of weapons of mass destruction.

    This achievement was not accidental; it was the outcome of a well-executed national strategy and sustained technical commitment.

    Why Was Panama Still on the EU List?

    Despite meeting the FATF’s technical standards, Panama remained on the European Union’s list of non-cooperative jurisdictions for political reasons. While the EU’s technical experts had recommended our removal, the final decision rested with the European Parliament, a political body with its own dynamics and interests.

    These “blacklists” or “grey lists” are tools used by entities such as the United Nations, the EU, and the OECD to push countries toward global standards and ensure protection against organized crime and financial abuse.

    Why Does This Matter to Everyday Panamanians?

    Being removed from these lists directly impacts Panama’s economy and financial opportunities. A stronger reputation translates into:

    • Easier international financial and commercial transactions
    • Better access to international credit and loans
    • Lower interest rates on public debt
    • Increased competitiveness and investor confidence

    In short: a more trusted Panama means a more prosperous Panama.

    The Critical Role of Lawyers and Technology

    Lawyers have played a key role in this achievement. They represent 97% of the Designated Non-Financial Businesses and Professions (DNFBPs) and have embraced technology as a strategic ally.

    By using the RUBF platform of the Superintendency of Non-Financial Entities, they successfully uploaded over 80% of all legal entities registered in Panama’s Public Registry—meeting obligations regarding ultimate beneficial ownership transparency.

    This commitment has not only helped improve compliance but also boosted business trust, creating better commercial opportunities.

    A New Way of Doing Business

    Legal professionals and business leaders alike understand that the way we do business has changed. Today, it is essential to:

    • Know your client
    • Apply proper due diligence
    • Assess the risks of each economic activity

    These are not burdens—they are strategic tools for making better decisions and enhancing Panama’s global image.

    What’s Next?

    Panama has done its part. Now it’s time to prove that our compliance was not just about getting off a list, but about building a more transparent and responsible country.

    We must now attract investors, double down on our efforts, and work toward economic growth, financial stability, and social wellbeing.

    Panama is not just off the list. Panama is stepping forward as a trustworthy, serious, and committed nation.

    Now more than ever, it’s time to protect our progress—and keep moving forward.

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  • Panama: Stability and Progress in an Uncertain World

    Panama: Stability and Progress in an Uncertain World

    Panama: Stability and Progress in an Uncertain World

    In a world defined by sudden shifts —from unstable political regimes to armed conflicts, terrorist threats, and economic crises— Panama stands out as a beacon of stability, neutrality, and openness. 

    While many countries halt in the face of uncertainty, Panama keeps moving forward. Its trade-driven economy continues to grow, drawing investment from around the globe. With its strategic location, robust banking system, competitive tax regime, and world-class logistics —thanks to the Panama Canal, the Free Trade Zone, modern ports, and the submarine cable systems connecting the Americas— the country becomes an ideal base for everything from multinational headquarters to small startups.

    Panama, however, offers more than just economic advantages. It is home to a warm, resilient, and hard-working population. International studies consistently rank Panama among the happiest countries in the world, driven by its tropical climate, cultural diversity, safety, and genuine hospitality.

    Panama has earned a reputation as a reliable, neutral business hub, free from extreme ideological tensions. Here, local and international talent come together to build, innovate, and grow.

    In a constantly changing world, Panama remains steady and adapts with agility. Always open to the world and always moving forward.

    Considering expanding your business to Panama or seeking new opportunities?
    Contact us for tailored legal advice.
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  • Tax Residency in Panama: Benefits and Opportunities

    Tax Residency in Panama: Benefits and Opportunities

    Tax Residency in Panama: Benefits and Opportunities

    Tax residency refers to the status that an individual acquires in a country, by which said country has the right to consider said individual as a taxpayer and, consequently, apply its tax regime.

    Panama considers as tax residents those individuals who remain in the country for more than 183 days within a fiscal year or the previous one, or those who establish their permanent residence in the territory.  This also includes those juridical entities incorporated in Panama or abroad that have their management and administration in the country, provided they are recorded in the Public Registry.

    Benefits of Tax Residency in Panama:

    1. Exemption from Taxes on Foreign Income: Panama applies the principle of territorial taxation, exempting income earned outside the country from income tax payments.
    2. Legal and Fiscal Stability: Panama maintains a predictable regulatory framework and international agreements that ensure tax security and protection against double taxation.
    3. Access to Double Taxation Agreements: The agreements signed by Panama with multiple countries prevent double taxation on the income of Panamanian tax residents.
    4. Benefits for Businesses and Entrepreneurs: Panama offers a modern infrastructure, a solid  banking system, and tax advantages for business with income from foreign sources.

    It is advisable to seek specialized legal advice to ensure compliance with the requirements necessary to obtain tax residency, and in this manner obtain full benefit from the advantages offered by Panama’s tax system.

  • Work Permit established by special immigration conditions

    Work Permit established by special immigration conditions

    Work Permit established by special immigration conditions

    Pursuant to Executive Decree No. 6 of 2023, relevant changes are introduced in the regulation of labor immigration, including the creation of the category of Work Permit established by special immigration conditions.

    Foreigners who have one of the following immigration categories can apply for said work permit:

    1. National migrant worker from specific countries that maintain friendly, professional, economic and investment relations with the Republic of Panama;
    2. Migrant worker with a Residence Permit authorized by the General      Immigration Regularization program;
    3. Professional migrant worker;
    4. Migrant worker for family reunification for resident dependents.
    5. Students.

    Applicants must comply with the conditions of self-employed or employed, to wit:

    • Self-Employed: when the applicant is found to be properly developing a permitted income-generating activity or is self-employed directly in a condition of economic dependence or legal subordination and not developing activities that are by law for Panamanians.

    For this procedure, a Notice of Operation must be provided in the name of the applicant and the Single Taxpayer Registry and for the extension, an Income Tax Declaration must be submitted.

    • Employed: when the applicant maintains an employment relationship based to an employment contract under the conditions of legal subordination and economic dependence. In this case, the Ministry of Labor will apply the percentage rules established by law for the hiring of foreigners, i.e., 10% or 15% of the Panamanian workforce of the company that does the hiring.

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    Need assistance with your Work Permit application under these new immigration conditions?
    Contact us today for expert guidance on immigration and legal planning!

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  • How to obtain a Panama Residence Card in 30 days?

    How to obtain a Panama Residence Card in 30 days?

    Invest in Panama and get a Permanent Residence in 30 Days

     

    The investment can be:

     

    Real Estate Investment: until October 15, 2024, the sum of $300,000.00, after that date the investment must be $500,000.00.

     

    Stock Market: The sum of $500,000.00

     

    Fixed Term Deposit: The sum of $750,000.00

  • Panama prepares for the Population and Housing Censuses 2023

    Panama prepares for the Population and Housing Censuses 2023

    Panama prepares for the Population and Housing Censuses 2023

     

    Panama has throughout it’s history held 11 population censuses, the first in 1911 and the last in 2000.  It has also held seven housing censuses from 1950 to 2000.

     

    In this regard, Panama is preparing for the XII National Population Census and VIII Housing Census.

     

    It will be a fully technological process lasting 56 days from January 8 until March 4, 2023, and will include:

     

    • 8,650 mobile capture devices
    • Around 7,000 enumerators collecting data and 2,000 supervisors

     

    The preliminary results will be available in July 2023 and final results in September of that year.

     

    According to the last census, held in 2010, Panama’s total population was 3,405,813 persons.

  • Migratory Regulations: Venezuela

    Migratory Regulations: Venezuela

    New migratory regulations for non resident Venezuelans

     

    NON-RESIDENT VENEZUELANS WHO ENTER PANAMA MUST APPLY FOR A STAMPED VISA AT THE PANAMANIAN CONSULATE

     

    By means of Executive Decree No.77, the Decree that created the Office of Humanitarian Affairs for Venezuelan residents, to attend to requests for family reunification for humanitarian and family union reasons, is repealed.

     

    Once the family reunification visa has been eliminated, all foreign NON-RESIDENT Venezuelan nationals who want to enter the Republic of Panama must apply for a Stamped Visa at the Consular Office of Panama in the country in which they are located or through an attorney within the territory of Panama.

     

    An exception applies to those foreign Venezuelan nationals who have a multiple visa and previously used in the granting State and its validity is not less than 6 months at the time of entering the territory of Panama or, valid residence, duly issued from the following countries: Canada, United States of America, Commonwealth of Australia, Rep. of Korea, State of Japan, United Kingdom of Great Britain and Northern Ireland, Rep. of Singapore and any of the States that. make up the European Union.

     

    By: Chantall Santos