How To Obtain a Golden Visa in Panama?
Opting for a plan B and obtaining a second permanent residency has never been easier since the creation of the Golden Visa for qualified foreign investors in Panama. Unlike existing immigration categories, the Golden Visa has four important advantages:
1. Special VIP desk for the submission and processing of the Golden Visa application.
2. Accelerated processing of the application (30 days procedure).
3. Possibility to submit the application through a lawyer without leaving your country of residence.
4. One-time application which grants investors permanent residency in Panama.
BUT WHY SHOULD I INVEST IN PANAMA?
Panama has a low crime rate and can be considered the most secure country in the region. Besides its fantastic tropical climate, you will find a diversity of places to live and invest: beaches, islands, highlands, and a modern capital city (some might even call Panama City the Miami of Latin America). The country offers a multicultural community and a fully dollarized economy, being a financial hub with over 60 international banks. Throughout the years the government of Panama has signed 23 Free Trade or Commercial Agreements spanning 60 countries. Not only is Panama a digital hub (95% of all digital communication in Latin America goes through Panama) but also a logistics hub and the most connected country in Latin America with daily flights to 90 destinations, connecting 2 oceans through the Panama Canal and 5 major maritime ports.
How Does The Golden Visa Differ From Other Investment Visas? - Unlike other existing investor visas the Golden Visa offers the possibility of obtaining permanent residency in Panama within 30 days with a single application. The investment must be maintained for a minimum period of five (5) years (which is reviewed annually by the government), if it is liquidated prior to the fulfilment of this period, it will result in the cancellation of the already approved residence permit.
A very interesting detail of the Golden Visa is the fact that the application can be submitted through a lawyer without the need to leave your country of residence and travel to Panama. Previously, in order to apply for a residence permit in Panama, it was necessary to appear in person at the immigration office. For the Golden Visa, the National Immigration Service established a special department to receive and process these applications, an exclusive VIP counter. In addition, the government is obliged to process the application within a maximum period of 30 working days.
This means that an attorney can submit applications even before the applicant and their dependents travel to Panama. Once the applicants arrive in Panama, they must go through the normal passport registration process to receive their migration ID card.
How Do I Qualify For The Golden Visa? - There are 3 ways to qualify for the Golden Visa:
1. Real Estate Investment: Minimum amount of investment is $300,000 (Starting October 15, 2022, the minimum amount required for real estate investment increases to $500,000 for new applications).
2. Investment in the local Panamanian Stock Market: Minimum amount of investment is $500,000.
3. Open a time deposit in a local bank: Minimum amount of investment is $750,000.
OBTAINING YOUR GOLDEN VISA THROUGH REAL ESTATE INVESTMENT
In order to qualify for the Golden Visa through real estate investment, the property must be acquired before the application is submitted. There are no legal requirements regarding the usage of the property: It is possible to invest in a house, apartment, commercial property, agricultural land or wasteland, etc.
The type of real estate available in Panama is very diverse. Recently, we can observe two trends of real estate buyers in Panama: buying unique properties in the interior and investing in centrally located apartments in Panama City with the aim of renting them out, thus creating a passive source of income (as a provision) in the long term.
Buying real estate seems easy, but there are common mistakes and problems you can easily encounter if you do not take into account the following:
Look for an honest, reliable, English-speaking real estate broker. There are real estate agents who are more concerned about charging their commission quickly, rather than finding the right property for you.
Besides a competent and professional real estate agent you also need a reliable and trustworthy lawyer who speaks English or another language of your choice. Remember, the Laws and the legal basis in Panama are not the same as in other countries. You should not sign contracts or legal documents that were not reviewed by a trustworthy lawyer. When your offer is accepted by the seller, the lawyer can perform legal due diligence on the property and ensure that you are not purchasing a problem. If you have doubts about a transaction, seek advice from an experienced lawyer who will not only protect your interests during the purchase transaction, but also your wallet by avoiding problems in the future. Remember, the commission of the real estate agent is paid by the SELLER, not the buyer as it happens in Europe.
WHAT SHOULD I PAY ATTENTION TO WHEN INVESTING IN PANAMA?
First, Location is everything. When considering an investment option, buy location, not price. Some details are cosmetic and can be solved in one way or another, but real estate options can be called an ”uncontrollable risk”. Whether it’s a lawsuit, a conflict of interest, or some kind of encumbrance. Unless you like to play Russian roulette, don’t get distracted by the ”flashy” details of a property. The purchase of real estate should be structured well from the beginning to avoid headaches and bad surprises in the future: Are there any annual taxes that must be paid? What will be the taxes to pay when you sell your investment? Which legal figure is the most convenient to acquire real estate? If you are looking to invest in a condominium in Panama then inquire about the maintenance fees and what services are included. Do all apartments pay the same? Is the Board of Directors of the condominium working properly? Do they have an administrator for the building? How are the finances of the condominium association? Under Panamanian law, you are entitled to that information.
MAKE THE INVESTMENT IN MY PERSONAL NAME OR THROUGH A FOUNDATION?
The National Immigration Service of Panama allows the investment to be made either as a natural person or in the name of a legal entity (company or foundation), as long as it can be proven that the main applicant is the final beneficiary of the company/foundation which is the legal owner of the property (in this case, additional documents must be submitted).
Keeping in mind that due to the inheritance law in Panama we always recommend purchasing real estate in Panama by using a foundation. If you hold assets in Panama, in your own personal name, regardless of whether or not you have a will, a probate proceeding must be completed after your demise. In order to do so, it is necessary that your heirs hire a lawyer in Panama to file a probate lawsuit (tested if there is a will, or intestate if there is no will, which in practice is almost the same procedure).
Your file must go through different stages and hands in the Court and once all the formalities are completed the judge will make a decision and assign the final beneficiary(ies) and just at that moment, transfer the ownership. Legal procedures in Panamanian Courts take their time, and even under the best conditions, it will take at least two years until your heirs have the right to transfer your assets to their names so that they can finally sell them. In the meantime, they will have to pay for expenses, and lawyer’s fees (15% of the total inherited assets according to the minimum lawyer’s fee in Panama), among others.
A foundation can ensure that after your death, your estate passes to your chosen beneficiaries without any stressful complications, delays, or litigations. For legal purposes, the assets of a foundation constitute a separate estate from the assets of its founder and the beneficiaries. Just as in a will, the foundation’s private by-laws govern the conditions of the foundation. It can be established how the assets will be distributed, and who has control over the administration of the foundation’s assets. Nowadays the commercial registry of the foundation can be filed electronically, making the registration process more expeditious, less complicated, and without the founder having to travel to Panama.
Knowledge in legal matters helps you to make an informed decision and protect not only your investment and assets, but also your family, heirs, and loved ones. EG