March 14, 2025
Limitless Team
Panama is an increasingly popular destination for individuals and companies looking for a favorable tax environment. Obtaining tax residency in Panama not only allows you to benefit from its territorial tax regime, but also opens new doors for investors, expatriates and entrepreneurs. At Limitless Legal, we understand that this process can seem complex. For this reason, we have designed this complete guide that will help you understand step by step how to obtain your tax residence in Panama, the legal requirements and the economic benefits that this implies.
What is tax residency in Panama and why should I obtain it?
Tax residency in Panama is a status granted to individuals or companies that meet certain requirements established under the Panama Tax Code. This status allows taxpayers to benefit from Panama's territorial taxation principle, according to which taxes only apply to income generated within the national territory. This makes Panama a very attractive tax jurisdiction, especially for expatriates and businessmen looking to optimize their finances.
Key Benefits of Tax Residency in Panama:
- Territorial taxation: Foreign income is exempt from taxes.
- Access to fiscal and financial incentives
- It facilitates international business operations.
- A predictable and investor-friendly legal framework.
- It is used to avoid double taxation when maintaining several residences.
Who can apply for tax residency in Panama?
- Natural persons: Those who physically reside in Panama for at least 183 days a year, continuously or cumulatively, meet the main requirement.
- Legal entities: Companies that have operations or commercial structures in Panama, duly registered with the General Directorate of Revenue (DGI).
What requirements do you need to apply for tax residency in Panama?
The following are the most common documents and requirements:
- Duly completed and signed application form.
- Evidence of permanent residence in Panama, such as rental contracts or property titles.
- Visitor records that prove at least 183 days of physical stay in the country.
- Personal or business financial statement.
- Valid passport and copy of the ID card if applicable.
- Proof of expenses within Panama, such as electricity bill, telephone, internet.
- Any evidence that simply proves that you live in Panama.
Note: Depending on the details of your situation, additional documents may be required. Having the support of specialized legal advisors such as Limitless Legal ensures that your request meets all the requirements required by Panamanian laws.
Where and how to file your application for tax residence?
Steps to start your process:
- Collect all required documentation.
- Verify that the forms are accurate and complete.
- Submit the request directly to the DGI or through an authorized representative.
- Wait for the evaluation process, which can take weeks depending on the complexity of the case.
The most common mistakes when applying for tax residency (and how to avoid them)
- Not complying with the minimum length of stay of 183 days.
- Submit incomplete or outdated documents.
- Do not know the details of local tax regulations.
- Attempt to carry out the procedure without adequate legal support.
✍🏼 Take note...
Obtaining tax residency in Panama is an opportunity that offers unique advantages for businessmen and individuals who seek to optimize their tax situation and enjoy the benefits of the country's territorial tax regime. In this guide, we've covered the essential requirements, process steps and potential challenges, giving you a clear and accessible vision. Having specialized support will ensure a quick and smooth procedure.