Panama Residency for US Citizens: Options, Taxes and Asset Protection

Americans are the third-largest group receiving Panamanian residence permits: 3,128 permits were approved for US citizens in 2025, out of 33,262 approvals nationwide, behind only Colombia and Venezuela. Source: National Immigration Service of Panama, residence permits 2025 (preliminary figures as of December 31, 2025; includes temporary, provisional, permanent permits and extensions).

Most guides stop at the visa. For a US citizen, that is only half the picture: the United States taxes its citizens on their worldwide income no matter where they live, so moving to Panama changes where you live, not who you report to. This page focuses on the wealth and tax side of the decision.

Residency routes that fit US citizens

• Friendly Nations: the United States is on the official list (Executive Decree 416 of 2012, as amended by Executive Decree 16 of 2026). This is the Friendly Nations permit: an economic tie to Panama, such as an investment from USD 200,000 or a job contract with a Panamanian employer; it starts with a 2-year provisional residence before permanent status.
• Golden Visa: the Qualified Investor Golden Visa (Executive Decree 17 of 2026, in force since September 16, 2026): new real estate (first sale) from USD 300,000; resale real estate USD 500,000; securities USD 500,000; or a 5-year fixed-term deposit of USD 500,000 at Banco Nacional or Caja de Ahorros, or USD 750,000 at a private bank. Immigration resolves in up to 30 business days once the file is complete; that is a reference timeline, not a guarantee.
• Pensionado: the Pensionado (retiree) visa, open to all nationalities: a lifetime pension of at least USD 1,000 a month, or USD 750 if you buy your own property worth more than USD 100,000. Social Security and many private pensions are commonly used, subject to Immigration's review.

For document checklists and filing steps, see this Panama visa guide for US citizens. Apostilled US records filed in Panama also need an official translation in Panama into Spanish. Our role is the structure around it: where your assets sit, how they pass to your family and how both countries see them.

Citizenship-based taxation: what does not change

Panama applies a territorial tax system: foreign-source income is generally not subject to Panamanian income tax. But as a US citizen you generally keep filing a US return every year, reporting worldwide income. In general terms:

• Foreign Earned Income Exclusion (FEIE): may exclude a capped amount of earned income (wages, self-employment) if you meet the bona fide residence or physical presence test. It does not cover investment income, pensions or capital gains.
• Foreign tax credit: relevant if you pay tax in Panama on Panamanian-source income, for example rent from a local property.
• State taxes: some states may treat you as still domiciled there if you keep strong ties. Close the loop before you leave.

FBAR and FATCA once you bank in Panama

Opening Panamanian accounts brings reporting duties. If the combined balance of your foreign accounts exceeds USD 10,000 at any point in the year, you generally file an FBAR (FinCEN Form 114). FATCA adds Form 8938 above certain thresholds, which are higher for taxpayers living abroad. Panamanian banks also identify US persons and report under FATCA, so expect extra paperwork at account opening; some banks are more selective with US clients.

A Panama foundation from the US point of view

A Panama Private Interest Foundation (Law 25 of 1995, minimum initial patrimony USD 10,000) can organize succession and hold assets separately from your personal estate. For US tax purposes, however, it may be classified as a foreign trust or as a corporation depending on how it is set up, and that classification can trigger annual forms such as 3520 and 3520-A. Plan the structure together with a US tax advisor before transferring anything. Two more points matter:

• US citizens remain subject to US estate tax on their worldwide estate, wherever they live.
• Protection is not absolute: transfers made in fraud of creditors can be challenged, and the foundation's beneficial owner is reported to Panama's restricted beneficial ownership registry.

How we coordinate it

We map your US filing position, choose the residency route, open banking with realistic expectations and design the foundation, if one makes sense, with your US advisor in the loop. You get one consultant coordinating Panamanian lawyers, banks and immigration.

Frequently asked questions

Can a US citizen get permanent residency in Panama?

Yes. US citizens can apply through Friendly Nations (the US is on the official list), the Qualified Investor Golden Visa from USD 300,000 in new real estate, or the Pensionado visa with a lifetime pension of at least USD 1,000 a month.

Do I still pay US taxes if I live in Panama?

Generally yes. The US taxes citizens on worldwide income regardless of residence. Tools such as the Foreign Earned Income Exclusion and foreign tax credits may reduce the bill, but you usually keep filing every year. Confirm your case with a US tax advisor.

Does Panama tax my US pension or investment income?

Panama generally does not tax foreign-source income, so US-source pensions and investment income are usually outside Panamanian income tax. Income produced in Panama, such as local rent, is taxed in Panama.

Do I need to file an FBAR for a Panamanian bank account?

If the combined value of your foreign accounts exceeds USD 10,000 at any time during the year, you generally must file an FBAR. FATCA Form 8938 may also apply above higher thresholds.

Is a Panama foundation useful for an American?

It can organize succession and separate assets, but the US may treat it as a foreign trust or a corporation, with its own reporting. It does not remove US estate or income tax, so design it with US tax advice.

This content is general information and does not constitute legal, tax or immigration advice. Requirements, amounts and timelines may change and depend on each case and on the authorities. Review your home-country tax position with a qualified tax advisor before acting.