Panama is home to one of the largest sloth populations on earth and is also a very popular retirement destination for expats from around the world. Due to Panama’s lower cost of living, stable economy, and use of the US Dollar, Panama makes a great place for those seeking early retirement via FIRE as well. In fact, it is one of the nations that The Money Sloth plans to explore for early retirement! However, the most popular visa for early retirees heading to Panama, the Friendly Nations Visa, is being significantly changed in the second half of 2021.
Current Friendly Nations Visa Requirements
Through July 2021, applicants to Panama’s Friendly Nations Visa must be citizens of one of 51 “friendly nations” and meet one of the following requirements:
- Own titled property in Panama worth at least $100,000
- Own a Panamanian corporation (can be easily done with as little as $5,000)
- Be employed by a Panamanian Corporation
New Friendly Nations Visa Requirements
Effective August 5, 2021, applicants to Panama’s Friendly Nations Visa must be citizens of one of 50 “friendly nations” (Taiwan has been removed) and meet one of the following requirements:
- Be employed by a Panamanian Corporation, with a formal labor contract, and a work permit.
- Own real estate worth at least $200,000 (bank financing is permitted).
As you can see, the option to start a Panamanian Corporation (for as little as $5,000) is being eliminated. This was one of the easiest routes to permanent residency in the world and made Panama a great option for early retirees. Traditional aged retirees can still qualify for the Pensionado Visa with their Social Security or other pension income of at least $1,000 per month.
The real estate ownership requirement has also been doubled to $200,000, but allows the use of a mortgage. However, in order to obtain a mortgage, the borrower will likely need some sort of verifiable monthly income if they do not have the ability to plunk down $200,000+ at once on a property purchase.
Panama Visa Options
What does this mean for early retirees considering Panama as their retirement destination? You’ll need to consider purchasing property that you must hold for the two years of your temporary residency visa. Once you receive permanent residency, you can sell the property. Pursuing one of the other Panama visa options may also make more sense now. There is the pensionado (retirement) visa, reforestation visa, self economic solvency visa, and several others that you may find attractive.