Panama Immigration Law Changes - 05/24/08

Introduction – Panama has changed the Immigration laws effective 08/08 (this year). In Panama first a law gets passed and approved. This has already taken place. The law itself may have some unclear aspects, which are generally cleared up in the publication of the regulations, which serve to define the law. It dots the I’s and crosses the T’s.

Summary – The first draft of the regulations has come out. This may not be the final draft but it certainly gives us a good picture as to where things are heading. The initial impression based on the law was not encouraging. There seems to be some directional trends taking place here is a very positive way. At this point we will give you a few of the highlights. We do not have the regulations in English yet and will post them as soon as we get them. There may not be an English translation until the final regulations are done. Remember this is just a draft circulated for comment but it is most encouraging.

Grandfather – Anyone all ready approved under the old regulations is grandfathered in and unaffected by new regulations.

Permanent Residencies – There are going to be Permanent Residencies after two (2) years of having your temporary one–year visa approved. The bank deposit program is going to be a four-year process. This is essentially similar to what the situation is now.

Small Investors Visa – The Small Investor's Visa has been eliminated. The only investor visa is for Large Businesses with a minimum investment of US$200,000.00. The small investor visa required $40,000 investment and hiring of three nationals. This is gone. The large investor visa used to be $150,000 and has been raised to $200,000.

Reforestation – There is now only one reforestation visa with the minimum investment of US$80,000.00. It used to be $40,000 and $75,000.

Rentista Retirado – This is the program when one puts enough money into the Panama Banco Nacional for five years to generate $750 a month in interest. This results in a five–year residency.

The regulation does not make mention of the passport benefit. We were verbally told the passport has been dropped but we await the final draft for absolute certainty. At this point we assume no more passports.

Pensionado – Pensionado program, still the same except the minimum pension amount is for US$1,000.00 for the main applicant plus $100.00 for each dependant. The Pensionado program is permanent under new regulations resulting in a permanent residency with the possibility to apply for citizenship in five years. Note we said apply, no assurances of it being granted. There is no minimum age for pensionados.

Person of Means Visa – It is still with us with the option of permanent residency. The amount has been raised to $350,000 from $200,000. The CD in a local bank has to be for four (4) years in your personal name. Real property must be residential suitable for living in (not raw land) and has to be titled in your name free of liens and encumbrances, which indicates that after the (2) years you just have to show that you still have it in your name free and clear to obtain the Permanent Residency.

Employment Visas – Work visas also have stayed with same requirements, except that the minimum salary is also $1,000.00 and they are no longer permanent. One cannot work under a work visa during the application stage. One must wait until it is approved which could be a 60-day wait.

Procedures and Benefits – Some of this is still not yet defined so we are still looking through a foggy window some.

Immigration Police Force – Will be created which have the ability to ask for additional documents during the processing of applications. We do not know exactly what the implications of this will be.

Discussion – It seems that the law started out looking dismal has been revitalized into a workable situation. Yes they have increased the investment amounts and Pensionado amounts. Some will get hurt on the Pensionado amount increase. We are still in the dark regarding some questions like can I still apply under the old law and in a few years still get the permanent residency even though the law would have changed. Our thinking is yes but we await firm answers still. As we become aware of new information we will be posting it prominently on our website.

It is our opinion that for Panama to become competitive in immigration they should have some sort of automatic citizenship and passport within five years, or at least a permanent residency and passport within five years automatically. In the last five years something like 12 people were actually converted from permanent resident to citizen. The conversion to citizenship also requires renouncing ones citizenship from other countries. This too must go in that it makes Panama not competitive. At least we are seeing some softening up of what we thought the law was to be. Raising the dollar amounts is not something we expect them to reverse on. They are appealing to a higher economic level of people purposely. This will hurt some and others will welcome it and we chose to just go with the flow, so to speak.