In May 2021, the Panamanian government created the officially called Short-Stay Visa for Remote Workers. The initiative came because of the after-effects Covid-19 left on the way people worked. By offering a digital nomad visa, Panama hopes to attract digital nomads and freelancers who will provide consumption and investment for the economy.
As one of Central America’s most popular tourist destinations, Panama is renowned for its financial sector, beaches, mountains, colonial and contemporary architecture, and booming economy.
Benefits of Working as a Digital Nomad in Panama
Working as a digital nomad in Panama has the following benefits:
- Affordable visa application. In comparison with other countries that offer digital nomad visas, Panama has fairly affordable fees. The visa fees include $250 for the National Immigration Agency and $50 for the Visa Card.
- Extended stay. The Panama digital nomad visa is issued for nine months and can be renewed for another nine months.
- Tax-free. The Panamanian tax system has territorial taxation, under which digital nomads are not taxed on income from outside Panama. Upon staying in Panama for more than six months, you can apply for tax residency. As a result, you may be able to avoid paying taxes in your home country.
- Great internet connection. The Internet infrastructure in Panama is excellent. The country is connected to the rest of the world by several undersea fiber optic cables. Average Internet speeds across Panama are 20.44 Mbps for mobile Internet and 137.38 Mbps for fixed Internet.
- Tasty food. The cuisine of Panama is rich and diverse, just like its natural environment. Food in Panama reflects the country’s history: indigenous mixed with Spanish, influenced by the conquistadors’ arrival in 1501, topped off with Afro-Caribbean flavors. Some of the most popular foods include Guacho, Carimañola, Sancocho, Ceviche, Ropa Vieja, Tamal de Olla, and many more.
- Low living costs. In Panama, you will be living well for less. For a family of four, the estimated monthly costs are $2,399.70 without rent, and for a single person, the estimated monthly costs are $663.89 without rent. Some other costs include the following:
- Meal at an inexpensive restaurant – $6.50
- Meal for two people (mid-range restaurant, three-course) – $50
- Meal at McDonald’s – $7
- One-way ticket (local transport) – $0.35
- Monthly pass (regular price) – $30
- Basic utilities (electricity, heating, cooling, water, garbage) for 85m² apartment (per month) – $86.19
- Internet (per month) – $43.93
- Apartment (1 bedroom) in City Center – $730.15
- Apartment (1 bedroom) outside of Center – $428.33
- Apartment (3 bedrooms) in City Center – $1,291.94
- Apartment (3 bedrooms) outside of center – $825.79
How to Apply for a Panama Digital Nomad Visa?
To apply for a Panama digital nomad visa, you need to fulfill these steps:
- Make an appointment with a Panama embassy or consulate. Applicants must make an appointment with the Panamanian embassy or consulate beforehand. You may have to apply at an embassy in a neighboring country, depending on your residence.
- Prepare the required documents. The list of the required documents is in the section “Requirements for Panama Digital Nomad Visa”.
- Go to the appointment. At the appointment, you need to fill out the application form physically and submit the required documents.
- Pay the fees. The visa fees include $250 for the National Immigration Agency and $50 for the Visa Card.
- Wait for approval. You have to wait for the approval. The whole process takes about thirty days.
In addition to these steps, depending on your nationality, you might need to have a visa to enter Panama.
For more detailed information on how to apply for a Panama digital nomad visa, you should contact an embassy or consulate.
Note: The Panamanian immigration office is currently working to enable an online platform to process digital nomad visa applications.
Requirements for Panama Digital Nomad Visa
The list of the documents required to apply for a Panama digital nomad visa are:
- A completed application form. You can get the application form at the nearest Panamian embassy or consulate.
- Valid passport. Panama requires a three-month passport validity from your arrival date in the country.
- Certified passport copies.
- Three passport-size photos. The dimensions of the photos must be 2 x 2 inches (51 x 51 mm). The head must be between 1 -1 3/8 inches (25 – 35 mm) from the bottom of the chin to the top of the head.
- Funds. You need to have enough funds to support yourself to return home after the expiration of the visa.
- Certificate of a clean criminal record. You can get your clean criminal record at the local police department.
- A copy of valid medical insurance. You need health insurance for digital nomads and remote workers who are living abroad to travel to Panama. The medical insurance needs to have coverage in Panama.
- Certificate of good health. A certificate of good health is issued at the nearest hospital facility in your country.
- Affidavit of non-acceptance of any jobs within Panama. You can get an affidavit of non-acceptance of any jobs in Panama at your local courthouse. This affidavit means that your work needs to relate to operations outside the Panama territory.
- Proof of annual income. The annual income must be $36,000. In order to demonstrate sufficient income, bank certifications and bank statements are required.
- Applicants working for a foreign company need to submit:
- A letter signed by the company’s legal representative explaining:
- The role and function the applicant has in the company
- The applicant’s monthly income
- Work modality (how the work is done)
- Self-employed applicants must provide:
- Proof of the existence of the company outside Panama
- A sworn declaration that includes the following:
- The business activities they are engaged in
- The services they offer
- The nature of their clients
- Past revenue and projected revenue
Note: All documents issued abroad must be notarized and apostilled.
How Long Can I Work in Panama as a Digital Nomad?
The validity of the Panama digital nomad visa is nine months and can be renewed for another nine months.
Processing Time For A Digital Nomad Visa in Panama
The whole process of application for a Panama digital nomad visa takes about thirty days. It may take longer if you are asked to submit additional documents or information.
How Much Does the Panama Digital Nomad Visa Cost?
The visa fees include the following:
- $250 for the National Immigration Agency
- $50 for the Visa Card
Paying Taxes as a Digital Nomad in Panama
Digital nomads do not have an income from the Panama territory, therefore, they are free from income taxes. Upon staying in Panama for more than six months, you can apply for tax residency. As a result, you may be able to avoid paying taxes in your home country.
The tax system in Panama is territorial. Residents are required to pay taxes on the income that comes from Panama. The personal income tax rate in Panama is:
- Annual income of up to $11,000 – 0%
- Over $11,000 up to $50,000 – 15%
- Over $50,000 – 25% (on the first $50,000 it is 15%, on the remainder 25%
The social security tax is assessed at a rate of 9.75% for employees and 12.25% for employers. The educational insurance tax is assessed at the rate of 1.25% for employees and 1.50% for employers.
Finally, there is no net worth, inheritance, estate, or gift tax in Panama.