If you’re an expat considering relocating to Panama, you’re certainly not alone. This Central American nation has become an increasingly popular destination for foreigners, especially retirees from the United States and Canada seeking a lower cost of living and a tropical environment. But the process of moving to Panama isn’t as simple as just hopping on a plane. There are important steps you need to take to legally gain residency.

Why Move to Panama?

Before we dive into the specifics of the residency process, let’s quickly review some of the key reasons why Panama has become such a sought-after destination for expats:

Lower Cost of Living

One of the primary draws is the relatively low cost of living compared to the U.S. and Canada. Consumer prices and rents in cities like Panama City can be 30-50% lower than many major North American cities.

Pensionado Program

Panama actively incentivizes foreign retirees to relocate through its Pensionado program. This visa provides significant discounts on things like airfare, utilities, entertainment, and healthcare.

Tropical Climate

With a tropical climate featuring a dry season from January to April and a rainy season from May to December, Panama offers warm, sunny weather year-round that many expats find appealing.

Dollarized Economy

Panama’s unique use of the U.S. dollar as legal tender makes financial transition seamless for Americans. The Balboa is tied to the USD on a 1:1 ratio as well.

Developed Infrastructure

As the home of the world-famous Panama Canal, the country has a relatively strong infrastructure and transportation system compared to other parts of Central America.

Residency Visas for Expats

If you want to spend significant time in Panama beyond just a vacation, you’ll need to obtain legal residency. Here are some of the most common visa options for expats:

Pensionado Visa (Retiree Visa)

This visa is one of the fastest and most affordable ways for retirees to gain permanent residency status. To qualify, you’ll need to prove a lifetime monthly income of at least:

– $1,000 for an individual

– $1,250 for a couple

Your income can come from eligible sources like Social Security, pensions, annuities, and more. As mentioned earlier, this visa qualifies you for substantial discounts in Panama as part of the Pensionado program.

Work/Business Visas

If you want to work, own a business, or be self-employed in Panama, a work or business visa is required after your initial 180 day tourist visa expires. The investment amounts vary:

– Small Business: $40,000 investment and hiring 3 Panamanian employees

– Business: $150,000 investment

Person of Means Visa

Another option is the Person of Means visa which requires a substantial deposit or Certificate of Deposit (CD) with a Panamanian bank. The typical minimum is a deposit of around $170,000 that will generate at least $750 per month in interest income.

Forestry/Reforestation Visa

Expats interested in reforestation projects can invest either $40,000 to gain permanent residency after 5 years or $80,000 to qualify for citizenship after just 1 year under this unique program.

The Residency Application Process

Regardless of which specific visa you pursue, the overall residency application process for expats in Panama follows a similar multi-step process:

Step 1: Hire a Panamanian Lawyer

Your first step is hiring an experienced Panamanian immigration lawyer to guide you through the process. They will provide a full list of required documents like background checks, financial statements, etc.

Step 2: Gather Documents

You’ll need to obtain various documents from your home country like criminal background checks, marriage certificates, proof of income/pension, etc. Many of these will need to be officially translated, notarized, and apostilled.

Step 3: Initial Panama Entry

Once your lawyer has all your documents in order, you’ll make an initial entry into Panama. This involves meeting with your lawyer, signing power of attorney forms, filing your residency application, and obtaining a temporary 6-month residency card.

Step 4: Residency Processing

Over the next 3-6 months, immigration authorities will process and investigate your application. During this time, you can stay in Panama or travel in and out with a multi-entry stamp.

Step 5: Permanent Residency Card

Assuming all goes well, you’ll return to Panama for a final appointment around months 5-7 to obtain your permanent residency ID card (known as a cédula).

While this multi-step process requires advanced planning, hiring a reputable lawyer makes it relatively straightforward. The total legal fees typically range from $1,000 to $5,000.

Life as an Expat in Panama

Once you’ve obtained permanent residency, you can truly start settling into life as an expat in Panama. Here are some key considerations:


Panama has invested heavily in its healthcare system in recent years, but standards of care still lag behind the U.S./Canada. Many expats opt to use private hospitals and health insurance plans, especially in Panama City.


Major expat communities exist all across Panama from cities like Panama City and David to beach towns like Coronado. Prices can vary significantly based on whether you rent or buy, apartment vs house, urban vs rural location, etc.


To manage your finances, you’ll need to open checking/savings accounts at a major Panamanian bank like Banco General or Banistmo. U.S. dollars and the local Balboa are widely accepted.


Very few expats rely solely on Panama’s public bus and metro systems long-term. Many expats obtain a Panamanian driver’s license to take advantage of the reasonable costs of buying, operating, and insuring a personal vehicle.

Things to Do

Panama is a nature-lover’s paradise with abundant opportunities for outdoor activities like hiking, birdwatching, snorkeling/diving, and more. The cuisine is also quite diverse, with heavy influences from Spanish, indigenous, and Caribbean flavors.

While the process of acquiring legal residency in Panama has its bureaucratic hoops, it is ultimately very manageable with the right preparation and guidance. And once settled, many expats find Panama offers a wonderful mix of natural beauty, affordable living, and established infrastructure. With proper planning and compliance, Panama could be your next overseas home.

Photo of the portrait: Depositphotos