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Panama: visas, tax & cost of living

Panama runs a Remote Worker (digital nomad) visa needing ~$3,000/mo, taxes income on a territorial system, and uses the US dollar. Mid-range costs.

Panama: visas, tax & cost of living
Your passport

United KingdomPanama

Your move to Panama on a United Kingdom passport

  • VisitEasyVisa-free entry
  • NomadEasyNomad visa, likely eligible
  • RelocateFairly easyClear residence route

Visiting

Visa-free for up to 90 days. Travel on a passport valid for your whole stay, with a return or onward ticket and proof you can support yourself.

Passport validity: Passport with at least one blank page; valid 6 months beyond departure for visa-required and visa-waiver travellers, though US citizens are cited as needing only 3 months beyond entry.

At the border: Officers may ask for an onward or return ticket and proof of funds (about 500 to 1,000 US dollars) or a credit card, plus an online traveller declaration completed before arrival.

Working remotely

Short-Stay Visa for Remote Workers.

Income needed: ~$3,000/mo (~$36,000/yr) foreign income, Short Stay Remote Worker visa (Exec. Decree 198/2021) (estimate)

Duration: 9 months

Fee: ~300 USD (estimate)

Who qualifies: Short-Stay Visa for Remote Workers (Executive Decree 198 of 7 May 2021), created inside the Non-Resident migratory category, for people earning at least about 36,000 US dollars a year from foreign employers or clients, with international health insurance and a clean criminal record. Filed inside Panama via a legal representative, it does not cover work with Panamanian companies or local clients, and it does not itself build residence: time spent on it does not count toward any residence permit, however many times it is renewed.

Tax and residency

Resident if present more than 183 days (184 or more), consecutive or alternating, in a fiscal year or the one immediately before it (Codigo Fiscal art. 762-N, Ley 52 de 2012); also resident regardless of day count if you have set up a permanent home in Panama. Territorial system: Panama-source income is taxed, foreign-source income is generally left untaxed. Law 526 of 2026 (Gaceta Oficial 30534-B) added an economic-substance test for Panamanian companies and foundations inside multinational groups to keep the exemption on certain foreign passive income (dividends, interest, royalties) from fiscal year 2027; it targets that kind of corporate structure, not an individual's foreign salary or freelance income. (estimate)

The UK decides residence with its Statutory Residence Test (days in the UK plus your ties). As a non-resident you are usually taxed only on UK income; where one exists, a double-tax treaty with the destination decides who taxes what.

Double-tax treaty: yes, in force since 2013

Practical

Currency: USD. Cost of living: mid.

Healthcare: There is no reciprocal healthcare agreement, so foreigners must carry private or international health insurance, and private hospitals (mainly in Panama City) expect payment.

Driving: Visitors can generally drive on a valid foreign licence for about 90 days, and carrying an International Driving Permit alongside it is recommended.

Sources: Panama, Servicio Nacional de Migracion, official requirements for the Short-Stay Visa for Remote Worker (Executive Decree 198 of 7 May 2021) · Panama, Executive Decree 198 of 7 May 2021, full text (Gaceta Oficial Digital 29290-A, 20 May 2021) · Panama, Executive Decree 226 of 20 July 2021, Friendly Nations investment and employment routes (Gaceta Oficial Digital 29335) · Panama, Direccion General de Ingresos (DGI), Certificado de Residencia Fiscal, Codigo Fiscal art. 762-N (Ley 52 de 2012) · Panama, Ley 526 de 2026, economic-substance rules for foreign-source passive income (Gaceta Oficial Digital 30534-B, 28 May 2026) · GOV.UK: tax on foreign income · HMRC: double-taxation treaties

Estimates, not advice. Confirm with the official sources before you act.

Should you move to Panama?

Panama is an easy landing if you want the US dollar in your pocket, short flights across the Americas, and warm weather you never have to convert into a new currency. You can get by with not much Spanish, too. Most nomads start in Panama City, drawn to the skyline condos and coworking, while Boquete and Bocas del Toro pull a slower, cheaper crowd. Budget roughly $1,500 to $2,000 a month for a comfortable city life. Head up to the highlands and you will spend less. It is not the cheapest spot in Central America, but the infrastructure and banking earn their keep.

Panama visa and entry

Panama runs a real digital nomad route, the Short-Stay Visa for Remote Workers (Executive Decree 198 of 2021), for people earning from clients or employers abroad. The bar is around $3,000 a month (about $36,000 a year) in foreign income, and the visa gives you nine months to start, with one extension that takes you to roughly eighteen months. A local immigration lawyer files it for you, so budget for that. Two catches worth knowing: you cannot work for Panamanian companies or local clients while you are on it, and it sits in the Non-Resident migratory category, so it does not build toward permanent residence no matter how many times you renew it. If you want to settle for good, that means starting a separate route from scratch, most commonly Friendly Nations, which is not an automatic next step: it asks for a real estate purchase or a fixed bank deposit of about $200,000, or a genuine job offer from a Panamanian employer.

Tax residency and what to check

Spend more than 183 days, in one stretch or added up, in a fiscal year or the one before it, and you become a Panama tax resident under the Tax Code (Codigo Fiscal art. 762-N). There is a second, independent trigger too: setting up a permanent home in Panama makes you resident regardless of your day count. The good news is the territorial system: foreign-source income is generally left untaxed, while Panama-source income is taxed. One thing has changed since we last checked this page: Panama enacted Law 526 of 2026, which asks Panamanian companies and foundations inside multinational groups to show real economic substance to keep the exemption on certain foreign passive income (dividends, interest, royalties) from 2027 onward. It targets that kind of corporate structure, not an ordinary nomad’s foreign salary or freelance income, but if you run money through a Panamanian company or foundation, check where that leaves you.

Figures are estimates. Always check the official source linked below.

At a glance

Currency
USD
Cost of living
Moderate
Digital-nomad visa
Yes

Frequently asked questions

Panama: is there a digital nomad visa?
Short-Stay Visa for Remote Workers. Short-Stay Visa for Remote Workers (Executive Decree 198 of 7 May 2021), created inside the Non-Resident migratory category, for people earning at least about 36,000 US dollars a year from foreign employers or clients, with international health insurance and a clean criminal record. Filed inside Panama via a legal representative, it does not cover work with Panamanian companies or local clients, and it does not itself build residence: time spent on it does not count toward any residence permit, however many times it is renewed.
Panama: when do you become a tax resident?
Resident if present more than 183 days (184 or more), consecutive or alternating, in a fiscal year or the one immediately before it (Codigo Fiscal art. 762-N, Ley 52 de 2012); also resident regardless of day count if you have set up a permanent home in Panama. Territorial system: Panama-source income is taxed, foreign-source income is generally left untaxed. Law 526 of 2026 (Gaceta Oficial 30534-B) added an economic-substance test for Panamanian companies and foundations inside multinational groups to keep the exemption on certain foreign passive income (dividends, interest, royalties) from fiscal year 2027; it targets that kind of corporate structure, not an individual's foreign salary or freelance income.
Panama: what is the cost of living?
The cost of living is moderate and the local currency is the USD. Treat any figures as estimates.
Panama: do you need health insurance?
There is no reciprocal healthcare agreement, so foreigners must carry private or international health insurance, and private hospitals (mainly in Panama City) expect payment.
Panama: can you drive on a foreign licence?
Visitors can generally drive on a valid foreign licence for about 90 days, and carrying an International Driving Permit alongside it is recommended.

Terms worth knowing

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