Moving to Panama: tax, residence and real costs (2026)
Panama: 0% on foreign income · up to 25% on Panamanian income · 10% on local dividends. The cheapest route to residence is friendly Nations: USD 200k property or a Panamanian job; pensioners USD 1k/month with no investment; a Panamanian lawyer is required: USD 200k that stays yours (deposit, investment or funds shown) plus about USD 3,000 in fees, in about 6 months. Living costs about USD 1,600 a month for one person in Panama City, USD 910 in David, and around USD 860 on a bare-minimum budget.
Key facts
| Tax in one line | 0% on foreign income · up to 25% on Panamanian income · 10% on local dividends |
| Foreign income | not taxed (territorial) |
| Gains · dividends | local 10% · local 5-10% |
| Wealth · inheritance tax | none · none |
| Cheapest residence | Friendly Nations: USD 200k property or a Panamanian job; pensioners USD 1k/month with no investment; a Panamanian lawyer is required |
| Money needed | USD 200k that stays yours (deposit, investment or funds shown) plus about USD 3,000 in fees |
| Time | about 6 months |
| Doable yourself? | Use a licensed agent or lawyer |
| Days you must spend there | 183 days for a tax residence certificate |
| Citizenship | 5 years |
| Online business | 0% effective, about USD 1,000 a year to run: services with effect abroad are foreign-source; foreign LLC or Panama SA |
| Living (one person a month) | Panama City ~USD 1,600; bare minimum ~USD 860; family of four ~USD 3,300 |
| Good for | territorial tax for people and companies; private interest foundations; dollar economy; canal logistics and the Colón free zone |
| Common set-up | Qualified Investor or Friendly Nations residence + a Panama company invoicing abroad; foundation as the family holder |
Pros and cons
| Pros | Cons |
|---|---|
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Programmes
| Programme | All-in, one person | Months | Notes |
|---|---|---|---|
| Qualified Investor | USD 320k | 1 | Permanent residence in ~30 days. USD 300k real estate, USD 500k securities or USD 750k deposit. Friendly Nations: USD 200k property or a job. |
Questions
- How much does residence in Panama cost?
- Friendly Nations: USD 200k property or a Panamanian job; pensioners USD 1k/month with no investment; a Panamanian lawyer is required: USD 200k that stays yours (deposit, investment or funds shown) plus about USD 3,000 in fees, about 6 months.
- Does Panama tax foreign income?
- Not taxed (territorial). In one line: 0% on foreign income · up to 25% on Panamanian income · 10% on local dividends.
- What does it cost to live in Panama?
- Living costs about USD 1,600 a month for one person in Panama City, USD 910 in David, and around USD 860 on a bare-minimum budget (based on livingcost.org, 2026).
- Can I run an online business from Panama?
- Effective tax about 0% with the cheapest legal set-up, which costs about USD 1,000 a year: services with effect abroad are foreign-source; foreign LLC or Panama SA.
- What is the catch in Panama?
- Grey-list history; Banks strict with foreigners
- What residence or citizenship programmes does Panama have?
- Qualified Investor: about USD 320k all-in for one person, ~1 months
Compare
- Paraguay: 0% on foreign income · 10% on local income · 8% on local dividends
- Uruguay: 0% on foreign dividends and interest for 11 years (tax holiday) · up to 36% on local work income
- Belize: 0% on foreign income · up to 25% on local income
- Costa Rica: 0% on foreign income · up to 25% on local income · 15% on local dividends
- El Salvador: 0% on foreign income · up to 30% on local income
- Honduras (Próspera ZEDE): ~5% on income in the zone · 0% on foreign income
Compare all 53 places with your own income and budget →
Sources
- https://dgi.mef.gob.pa
- Living costs: based on livingcost.org (livingcost.org, June 2026), rounded