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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
  • RelocateMediumResidence with conditions

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:9months

Fee:~300 USD(estimate)

Who qualifies:Short-Stay Visa for Remote Workers (Executive Decree 198) 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 and not for work with Panamanian companies or local clients.

Tax and residency

183 days or centre of vital interests triggers residency; territorial system, foreign-source income generally untaxed.(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, PROPANAMA (Digital Nomad visa, official) · Panama, personal taxes (PwC summary) · 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 Remote Worker visa, 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. The catch worth knowing: you cannot work for Panamanian companies or local clients while you are on it. If you are thinking longer term, people usually switch tracks to residency routes like Friendly Nations or an investor permit.

Tax residency and what to check

Spend 183 days or more in a calendar year and you typically become a Panama tax resident, though a center of vital interests here (a home, a business) can pull you in sooner. The good news is the territorial system: foreign-source income is generally left untaxed, while Panama-source income is taxed. The picture is not frozen, either. Economic substance rules touching some foreign passive income have been moving through, so confirm the current state before you lean on the exemption.

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

At a glance

Currency
USD
Cost of living
Moderate
Digital-nomad visa
Yes
Tax & residency
183 days or centre of vital interests triggers residency; territorial system, foreign-source income generally untaxed.

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) 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 and not for work with Panamanian companies or local clients.
Panama: when do you become a tax resident?
183 days or centre of vital interests triggers residency; territorial system, foreign-source income generally untaxed.
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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