Panama Visas, Taxes and Money for Digital Nomads

Panama’s nomad visa (Visa de Corta Estancia como Trabajador Remoto) was created by Executive Decree 198 of May 2021. It sits in the non-resident category, so it is a long visitor visa rather than residence.

• Who: employees of foreign companies working remotely, and self-employed people with their own business registered abroad, whose work has its effect outside Panama and whose income comes from abroad.
• Income: at least $3,000 a month, or $36,000 a year, from foreign sources.
• Length: nine months, extendable once for another nine months, for up to 18 months in total. The extension needs the same documents as the first application.
• Fees: $250 to the SNM plus $50 for the visa ID card, so $300 in government fees. Lawyer’s fees, notaries, apostilles and translations come on top.
• Work: the visa lets you work remotely in Panama without any other permit. You can’t work for Panamanian employers, clients or customers.
• Family: the official checklist doesn’t include dependants, so a partner or children who don’t qualify themselves need their own visitor stay or visa. Ask your lawyer before you plan around it.

Documents

• A notarised power of attorney and application, naming your parents and their nationality.
• Three photos and a notarised or authenticated copy of your passport.
• A criminal record certificate and a health certificate.
• A sworn statement of personal background, and the application form, in which you agree to pay for your own return home if needed.
• Health insurance that covers you in Panama for the whole stay.
• For employees: proof that your employer exists where it is registered, and a signed letter on company letterhead giving your role, your monthly salary, how often you are paid, that the work is remote and that the income comes from abroad.
• For the self-employed: proof that your own business is registered abroad, and a notarised sworn statement describing your clients, your services, what you earn from each and how you are paid.
• Proof that the money comes from abroad: a bank certificate or bank statements, stamped by the bank, showing the payments.
• A sworn statement that you won’t accept work or business from Panamanian people or companies.

Documents issued abroad must be apostilled or legalised, and anything not in Spanish needs an official translation.

How to Apply

Because the application needs a power of attorney, it is filed with the SNM in Panama by a Panamanian lawyer. Many people enter as tourists, gather their documents and file while they are in the country. Once the visa is approved, you collect the ID card. Plan the extension well before the first nine months run out, with fresh bank statements and an updated employer letter or sworn statement.

Citizens of many countries don’t need a visa to visit Panama.

• US and Canadian citizens: up to 180 days as tourists.
• Most other visa-free nationalities, including the UK and EU countries: up to 90 days. Check the limit for your passport.

Your passport should be valid for at least six months, and officers may ask for an onward or return ticket, the address where you’ll stay and proof of funds (the UK government advises carrying at least $1,000 or a credit card). Officers can give a shorter stay. Tourist stays generally can’t be extended unless you apply to change your immigration status, and leaving for Costa Rica or Colombia and coming straight back to reset the clock can lead to questioning or refused entry. Some nationalities need a visa in advance.

Overstays are checked when you leave. You pay a fine before you can depart, and long or repeated overstays can lead to detention, deportation or a ban on returning. Apply for the remote worker visa or another status before your permitted stay ends.

• Territorial tax: Panama taxes only income from Panamanian sources, whether you are resident or not. Income from foreign employers or clients for work that has its effect abroad is generally treated as foreign-source and isn’t taxed in Panama. The remote worker visa is built around exactly this kind of income.
• Tax residence: you become a tax resident if you spend more than 183 days in Panama in a year. Because of the territorial system, residence matters much less here than in most countries.
• Rates: Panamanian-source income is taxed at 0% on the first $11,000 a year, 15% from $11,000 to $50,000, and 25% above that.
• Your home country: you may still owe tax at home. US citizens are taxed on worldwide income wherever they live, and Panama has no income tax treaty with the US.

This is a general guide, not tax advice. If you earn anything from Panamanian clients or rent out property, talk to a Panamanian accountant or the tax authority, the DGI. Our digital nomad taxes guide explains the general principles.

Panama’s official currency is the balboa, which is pegged one to one to the US dollar. There are no balboa banknotes in general circulation: all paper money is US dollars, and Panama mints its own coins, the same size and value as US coins, which are used alongside them. Many shops and taxis refuse $50 and $100 notes, so carry $20s and smaller.

ATMs from banks such as Banco General, Banistmo and BAC take foreign cards, usually with a fee of a few dollars per withdrawal and a limit of a few hundred dollars at a time. Cards and contactless payment are accepted in malls, supermarkets and most restaurants in Panama City, but cash is still common in small towns, on the islands and at fondas.

Opening a bank account in Panama is slow for foreigners: banks usually want a residence status, reference letters from your bank at home and proof of income, and many won’t open accounts for visitors at all. Most nomads on the remote worker visa keep using a foreign bank or a multi-currency card. With a local account you can use Yappy, the mobile payment app most Panamanians use.