The “Qualified Investor” immigration program

The “Qualified Investor” immigration program

Austin Hess 2020-11-24 09:08:22

The “Qualified Investor” immigration program was created by Executive Decree # 722 of the 15th of October of 2020.

The Qualified Investor program offers international investors an “expedited” (30 day process) opportunity to obtain legal permanent residency status in Panama, leading to citizenship in Panama (and a Panama passport). Please note that this particular Qualified Investor residency program offers a special benefit in that the investor is not required to be present in Panama, to apply for residency. The immigration application can be submitted by the investors lawyer, through a special power of attorney that must be apostilled or authenticated by the Panamanian consulate in the country where it was signed.

Option 2 – SECURITIES INVESTMENT IN THE PANAMA STOCK MARKET: Invest Five Hundred Thousand US Dollars (US$500,000) in the purchase of securities on the Panama Stock Market, through any qualified and licensed Panamanian securities brokerage firm. The investment must be for a term of five (5) years.

Option 3 – TIME DEPOSIT IN A PANAMA BANK: Invest Seven Hundred Fifty Thousand US Dollars (US$750,000) in a time deposit at a bank in Panama (the bank must have a general banking license), for a term of five (5) years. The interest income is tax free in Panama, and there are no Panama tax authority reporting requirements on this interest income in Panama.

All of the above investments may be made in the personal name of the investor, or in the name of the investors Panama corporation or Panama Private Interest Foundation so long as the investor is the exclusive 100% final beneficiary of the Panama corporation or Panama private interest foundation. The funds invested must have originated from banks outside of Panama.

Law: 122

Panama published Law 122 of 31 December 2019 in the Official Gazette on 2 January 2020, which extends the income tax incentives introduced by Law 80 of 2012 to 31 December 2025 for qualifying companies and hotels (was set to expire 31 December 2019). The incentives include, among others, customs duties exemptions on materials and equipment for the construction of tourist lodgings, a 15-year real estate tax exemption, and a 15-year income tax exemption on income from tourist activities.

Investor Qualifications

To qualify as a “Qualified Investor”, the investor can choose among the following three (3) investment options:

Option 1 – REAL ESTATE INVESTMENT: Invest Three Hundred Thousand US Dollars (US$300,000 in the purchase of real estate in the Republic of Panama, free of any liens.  In the event that the real estate purchase is for more than US$300,000 and there is bank financing with a mortgage lien for the remaining balance above US$300,000, then the required down payment for the real estate purchase must be no less than US$300,000. The investor must hold the property for a term of five (5) years.  Please note that after the 15th of October of 2022, the minimum required investment will be increased to Five Hundred Thousand US Dollars (US$500,000) for the purchase of real estate in the Republic of Panama, free of any liens.

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