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Gomez Tomiczek

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  • Full Real Name:
    Abel Gomez
  • Reason for registering:
    Live and/or work in Chiriqui
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    In Chiriqui
  • Birth (home) country:
    Panama

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  1. Today Panama’s National Immigration Service has published in detail the requirements for the NEW Friendly Nations Visa and additionally August 6th has been set as the new deadline to submit visa applications under the "old" Law. As of August 7, the new Friendly Nations Law will be in effect. What are the requirements for a residency application under the new Friendly Nations Visa? There were several pending issues that were not detailed in the executive decree published months ago. In practice we knew that they had to be modified and so it happened. Finally, the National Immigration Service of Panama made its pronouncement. Below, we have made a summary of what the new Law says. In order to apply for the new Friendly Nations Visa, an investment must be made by purchasing one (1) real estate property whose cadastral value is at least two hundred thousand US dollars (US$ 200,000). This was already known but it was not clear if the investment should be in the personal name of the main applicant or if it could also be made in the name of a corporation or private interest foundation. Now the National Immigration Service has established that the investment can be made either as natural person or in the name of a corporate body (corporation or foundation) as long as the main applicant is the final beneficiary of said corporation or foundation. This means, by presenting a true copy of the corporate documents of the corporation or the foundation's by-laws. There is a NEW option beside real estate investment Beside investing in real estate in Panama, the National Immigration Service now offers a second investment option which is the following: Investing in a fixed-term deposit (certificate of deposit – CD) with a bank in Panama. The CD must be a minimum of two hundred thousand U.S. dollars (US$ 200,000) and with a minimum term of three (3) years. It is possible to obtain the CD in one’s personal name or by a Panamanian legal entity (corporation or foundation), as long as it is demonstrated that the main applicant is the final beneficiary of the corporation/foundation that holds the CD. Remember, that in Panama any interests generated by a savings account or a fixed term deposit in a bank according to the current fiscal code of Panama do not pay any taxes in Panama. The third option to obtain residency under the new Friendly Nations Visa remains the same: for labor reasons. This means, it is necessary to file for a work permit granted by the Ministry of Labor of Panama. The requirements according to the new Law include submitting a letter of employment on letterhead and signed by the employer stating the position, salary and commitment to assume the repatriation expenses, certificate of public registry proving the existence of the company (if applicable) commercial license (if applicable). But there are not any further details given (yet) on how to obtain the work permit and other documents needed. The new law will have modifications as it is usual in the legal practice, but we can foresee positive changes. In addition, there is now the possibility of obtaining residency in Panama not only by investing in real estate but also in a CD, which might be a more practical option for many clients.
  2. Good business opportunities are always in the right hands when at the time of closing the deal, you were the one to scout it first. When I go to a different country, not only the language changes, even the culture, the food, and also the websites and classified portals where one is used to look for things and offers. If I want to rent or buy a property in Panama, where should I look? Apart from the websites of various real estate brokers and agents, where do I find local deals? Today I will give you a secret tip on where to find real deals and bargains in Panama. If you want to search for properties where local or foreign owners and most real estate agencies publish their properties you will find them here: www.encuentra24.com. Encuentra24 is the largest and most popular platform in Panama. Besides their large real estate section, you can also find vehicles and even job offers. However, you will have to take some time to search through a lot of information, compare different offers (and sometimes even prices) in order to find your personal bargain. If you search on Encuentra24 you will have everything in one place, owners and real estate brokers, all together. Remember that, if you decide to buy or rent through a real estate broker in Panama, it is the owner of the property who pays the commission of the real estate broker used for the transaction... not the tenant nor the buyer (that would be you). But what other options are there? Where can I find the real secret offers? Many clients do not know that there is a real estate market in Panama managed by the mayor banks. If you look at the banks directly, you will have more options without intermediaries. But if a bank is auctioning for example a property, it will not exactly choose Encuentra24 to publish the auctions. It is for this reason that Banco General (one of the largest and most popular banks in Panama) has just launched its own "property classifieds" advertising portal where new properties (with financing option by the bank), repossessed properties and commercial properties are being published. For bargain hunters, we have compiled a list of sites worth investigating: 1. Banco General “Clasificados de propiedades” https://www.bgeneral.com/clasificados-bg/ 2. Banco Nacional de Panamá: https://www.banconal.com.pa/remates-judiciales.html 3. Global Bank: https://www.globalbank.com.pa/es/bienes-reposeidos 4. Banco Banesco: https://www.banesco.com.pa/bienes-reposeidos 5. Banco Caja de Ahorros: https://www.cajadeahorros.com.pa/bienes-reposeidos/ 6. Banco BAC Credomatic: https://www2.baccredomatic.com/es-pa/people/bienes-reposeidos 7. Banco CanalBank https://www.canalbank.com/banca-empresarial/canal-inmuebles/ 8. Banco Banistmo: https://www.banistmo.com/wps/portal/banistmo/personas/productos-y-servicios/galeria-inmobiliaria 9. Banco Scotiabank https://pa.scotiabank.com/es/banca-personal/prestamos/propiedades-en-venta.html Now what is a Judicial Foreclosure in Panama? It is when someone could not or failed to pay the loan on their property, the bank took back that property by judicial foreclosure and put it up for sale to recover the money borrowed. A bank is not a real estate company, so it is not really interested in the property. Banks live off the interests they generate from lending money. Having a property without generating money is a monthly loss. The expenses caused will be very high if the bank keeps that property, so it is better to let go off it as soon as possible, and that is where you come in to buy "good, nice and cheap" as we say in Panama. Good luck with your hunt!
  3. For over 15 years I have been advising and assisting expats in their first steps in their new home country, and I have also lived and worked in many countries myself. I know from personal experience how it feels to start from scratch, to live as a newcomer in a foreign country, and to know neither the culture nor the language of the new host country. It is perhaps an unpleasant truth, but unfortunately a fact: not everyone finds in Panama what they might have hoped to find. If you are looking for a country to move, then in my opinion it is not about finding the "perfect" paradise, but to choose a country that meets your personal wishes and needs. How these are shaped and what is important to you (or not) is a very individual decision, which, in addition to facts, is always a certain decision of the heart. Therefore, I have summarized five points for you that you absolutely must know about Panama. If you find it difficult to accept these cultural differences and adapt in certain ways, Panama may not be the right place for you. Patience, patience, patience: The clocks tick differently in Panama. Time is a relative concept: "mañana" does not always mean "tomorrow" but maybe "two weeks", "ahorita" is anything but "right now", and it is quite common to arrive at private meetings much later than agreed. Unpunctuality (except at work and when dealing with authorities) is not a discourtesy in Panama. Bureaucracy and a different attitude to work mean that many processes, procedures and work steps are handled much more leisurely and slowly than we are perhaps used to in the USA or Canada. Irascible and brash behavior is often completely pointless. However, a smile and a certain degree of composure and flexibility can open many doors in Panama. “Juegavivo”: A common expression in the Panamanian culture describing a person who charmingly and with a twinkle in his eye likes to cheat a little, swindle or twist the truth in order to benefit from it. As a foreigner it is often difficult to distinguish cultural differences from "juegavivo". Therefore, always inform yourself in advance, especially in business and financial matters. You will find many insider tips and advice in my legal blogs, or simply book an appointment for a (virtual) free initial consultation. “Puente del mundo, corazón del universo” (Bridge of the world, heart of the universe): This is how Panamanians describe their beloved Isthmus and this national pride runs through all areas of life. In November Panama celebrates various national holidays, for this reason the whole country more or less stands still during this month. If you are planning a trip to Panama for business, it is better not to do it in November, and if you do, expect additional delays and allow more time than usual. "Clothes make the man": Clothes and appearance are important in Panama. Even ordinary people are careful to appear neat, clean and well-groomed at all times. Permissive, dirty clothing or vulgar behavior is not always appreciated. Foreigners who dress appropriately usually gain respect. Shorts (despite the temperatures) are usually worn only in private, at the beach or pool. Insider Tip: When attending appointments with public officials or at a bank, always make sure to dress appropriately: no flip-flops, sandals or Crocs, no shorts or miniskirts, no sleeveless T-shirts, loose-fitting shirts or spaghetti strap tops (or dresses). However, it doesn't have to be a shirt and tie. A simple short-sleeved t-shirt, jeans and sneakers are perfectly fine. Don't forget to wear a faceshield as well as a mouth-nose protection (mask) during appointments at the immigration office. “Piropos” or flattery: As a (single traveling) woman (but also as a man) you often get more attention in Panama than you are used to. Many men (and women) in Panama are often very direct when it comes to attracting the attention of the opposite sex or making first contact. If you don't want this, you can simply ignore unwanted remarks or reject them in a friendly but firm manner. Panama is unique. Using the slogan of the Panamanian Tourism Authority, “Panama is for travelers, not tourists." Whether you are looking for a destination to move, want to have a "Plan B" on hand, are interested in investing abroad, or want to spend your retirement in the sunny south. There are many reasons that speak for Panama and inspire expats for this small country. Whether as a traveler, investor or expatriate, the country enchants its visitors with mountains and beaches and offers the unique opportunity to wake up in the Caribbean and have dinner at the Pacific Ocean. In addition, Panama is an insider's tip for investing in real estate overseas. Panama is above all one thing: authentic, open and warm. Let yourself be carried away by the joy of life, openness and friendliness of the locals. It is easy to see why Panama is considered one of the happiest nations in the world. Panamanians like to strike up a conversation with others, be it in the supermarket, at passport control at the airport or in a café. Just try it out, even if you speak little or no Spanish your counterpart will always be eager to help you and make small talk. This is also true when moving around in Panama, whether as a single traveler, with or without children; you can be sure that people are always friendly and helpful. When our daughter was born in Panama, we were often approached by complete strangers on the street or in stores who congratulated us and wished us luck. One time my wife was stopped by the police asking for her driver’s license. At the end the official called over his other colleague just to have a look at the lovely baby on the back seat. And this actually happened more than once. I will never forget when at the passport control at the airport in Tocumen, an immigration officer held up our family (and the whole line waiting). We were just coming back from a trip to Europe, and of course we were tired and exhausted. While being in line for passport control, suddenly the official in charge yelled “STOP! STOP! Stop, here!”. My wife and I looked at each other confused. What was wrong? Then the immigration official pointed to our daughter in her stroller. “Now look a this little princess! Everybody, look a the sweet little girl…”
  4. The experience of traveling abroad in the midst of COVID-19 regulations means a challenge for many...in fact I recommend a lot of patience because each country has its own system of how to deal with the pandemic. That is why in this blog I want to give you recommendations given from my own experience in order for you to enjoy your trip to Panama. First, when you purchase your flight ticket to Panama and have your flight confirmation from the airline, you have to register online before making your trip to Panama; the system generates a QR code, thus letting the Panamanian health authorities know where you will be staying during your trip. Here is the Link: https://www.panamadigital.gob.pa/RegistroPacoViajero Remember that if you are traveling from Europe, the flight is long and the validity of the COVID-19 test may be compromised and the airline may not accept it and worse, may not let you board the flight. Also, investigate in time all necessary requirements not only of your destination country, but also of the country where you will make a stopover or transfer (if applicable). For example if you travel with KLM via Amsterdam to Panama you will need a PCR test (even if you have a connecting flight only). I recommend that two days before your trip (taking into account that the validity of a PCR test is 72 hours), you take the PCR test which normally gives you the result in 12 hours, but there are others that take a little longer. In order to avoid any stress, it is better to take the required test in time. This PCR test will help you to transfer through Holland or another EU country without any problem. However, when you arrive in Panama the PCR test will already be expired. To enter Panama you can also present an antigen or rapid test (according to current regulations, as of today June 11th 2021). Therefor I recommend that the same day you travel, you take an antigen test (at the airport of departure) and the result is given to you in 15 to 30 minutes. With this you can be sure that you will not have any problems when arriving in Panama. Always have at hand in a small trolley or handbag your passport, your airline ticket (which I recommend to have in your cell phone as a photo, pdf and also printed), the required COVID-19 exams (with a copy in your cell phone as a photo or pdf and also printed), because you will always be asked these documents about 10 times throughout your trip. In one of my trips I overheard while waiting in line for the boarding of the plane that an airport official complained to another passenger why he only had the COVID-19 exams on his mobile phone, that he should have them printed out as well, but that is not true, since it depends on the airport and the country, as well as the airline, it is not always necessary to have the printed documentation, but as I explained, better forewarned and be prepared than to have a bad time. Every airport has temperature control at each location, whether in Europe or Panama. As a general rule there are thermal cameras that scan the temperature of all passengers. Once you arrive in Panama you will have to wait in line and wait for your turn to get off the plane, then you will be transported to the airport terminal, and once inside you will be asked again for the COVID-19 test. As I said, be careful that they are not expired. Then you will have to go to get your luggage, which is usually coming out on the right hand side (flights from Europe). Just follow the corridor and you will see the lines, as well as the signs going down some stairs; there you will be asked again for the COVID-19 test and passport, but now, it is to register you in a database (confirming the online registration that you had already made prior to your trip). After passing the passport control (take the left row for tourists, and the right row for foreign residents and Panamanians), you will need to pick up your luggage. Be guided by the signs of the origin of your flight. At the exit of the airport you will feel the humid Caribbean heat, it will take you a few days to get used to it. Don't be surprised if people come up to you offering to help you with your suitcase and bags, asking you if you want a cab. I do not recommend taking one. Cab drivers' fares are very high, i.e. they can charge you between 20, 30 and 50 US dollars. Be careful because free competition of supply and demand rules in Panama. What I do recommend is that you install an UBER application on your cell phone, make sure you have internet connection on your phone because you can take an UBER and it will cost you a fraction of what you would pay in a normal cab, and you will be more comfortable. If you come with a lot of luggage a $21 UBER is enough room to get to your hotel using the highway. Remember that mobile data roaming in the EU is no problem, but when you arrive in Panama you may not have internet. When you arrive you will be able to buy a Sim card. Buy a non-contract prepaid one. A recharge of 20 to 25 US dollars is enough to have internet connection. Google maps will help you a lot to know how to move around Panama. To avoid internet connection problems you can download offline maps of Panama on google maps. However, if you travel to Chiriqui, you will be asked to take an antigen test before you leave the province again. If you travel by plane this test will be done by the Ministry of Health at the airport in David. There is also a private laboratory at the Tocumen airport when traveling abroad. The rapid test result will be delivered to you in about 30 minutes. However, PCR tests are not done at neither of the two airports. Nevertheless there are laboratories in Panama City and David that will help you to get your PCR COVID-19 exam for travel purposes on time, either express in 5 hours, or standard processing time between 12 to 24 hours. On your return to Europe if you travel with KLM please note that the Netherlands requires registration as well, here is the link: https://www.government.nl/documents/publications/2021/05/26/quarantine-declaration). Be well informed before organizing your trip and buying your airline ticket, each country and airport has its own rules and requirements. Have a safe trip, I see you soon!
  5. Several companies (especially in the IT sector) are offering their employees more flexible working models and making teleworking the new normal. Nowadays for many employees it does not matter where they work from, which creates new freedoms, self-determination and opportunities when it comes to choosing a place to live. Why not move your workplace to the tropics in the short or long term? Like many other Caribbean countries, Panama has adapted its legislation to the new working conditions and has created an immigration category especially for remote workers and/or digital nomads. With this measure, the government hopes to encourage the development of the national economy, through investment and consumption of local goods and services. To qualify for the remote worker visa you must meet the following conditions: To have an employment contract from a foreign company of transnational character or to be a self-employed worker, in the modality of remote worker To carry out functions that take effect abroad. Receive income from a foreign source and with an annual amount not less than thirty-six thousand U.S. dollars (US$36,000), or its equivalent in a foreign currency. To apply for the Remote Worker-Visa, the following documents must be submitted: Complete copy of the passport duly authenticated by a Panamanian notary. Five (5) passport size photos. Criminal background check from the country of origin or residence (duly apostilled). Health certificate issued by a licensed Panamanian professional. Affidavit of personal background. Completion of the corresponding application form. Copy of the applicant's medical insurance policy. Affidavit of Non-Acceptance of any job offer or service offer from nationals, residents, tourists or companies of Panama in order to carry out business within the Panamanian territory (signed by the applicant). Payment of two hundred and fifty U.S. dollars (US$250) in favor of the National Immigration Service. Proof that your income comes from a foreign source: Bank account statement from your bank abroad (or from a local bank), duly sealed by the issuing bank that proves the transaction of the remittance of the funds and that accredits that the same is linked to the declared labor condition (if it comes from a foreign bank, the statement must be duly apostilled). Additional requirements for REMOTE EMPLOYEES If your are a foreign employee who wishes to reside in Panama to work remotely for a foreign company, you must additionally provide the following documents: Certification or proof of existence of the foreign company you are working for in the place where it is registered (apostilled). Letter of the company (apostilled), on the company’s letterhead, signed by the legal representative stating the following Your general information. The position and functions performed within the company. Your monthly income (which cannot be less than three thousand US dollars US$3,000), periodicity of payments and that it comes from a foreign source. The modality of your job (remote work / home office) The commitment to assume the costs of return or repatriation to your country of origin or destination, if necessary. Additional requirements if your are SELF-EMPLOYED OR DIGITAL ENTREPRENEUR In order to apply for a visa as a remote worker, a self-employed person must provide the following documents: Certification or proof of your company, duly registered abroad, through which you will conduct your business (apostilled). Notarized affidavit describing the commercial relationship with the clients to whom your are providing your services. Once approved the visa as a remote worker will grant you the right to live and work in Panama as a remote worker or digital nomad without having to request any other type of procedure or additional permission. The visa will have a duration of nine (9) months, extendable one-time (1) for the same period.
  6. Due to the recent legal changes in the immigration category of the Friendly Nations Visa we have received many questions and doubts. For this reason we have compiled for you the most frequently asked questions and their answers. When do the new Friendly Nations Visa conditions come into effect and how much time do I have left to apply under the "old" rules? The new decree becomes effective 90 days after its promulgation. If you still want to apply for your permanent residency in Panama under the "old" Friendly Nations Visa you can still do so in June and July. I want to apply for the Friendly Nations Visa in June. Do I have to travel to Panama? How long do I have to stay in Panama for the application? The residency application can only be submitted if the file is 100% complete and all applicants are present in Panama. During your stay in Panama an appointment is arranged at our office in Boquete to sign the necessary documents, deliver the original documents we have already received via email, make copies, open the bank account, go with a member of our team to the immigration office, register your passport with them, have your migration ID card photo taken and receive your multiply visa to leave the country without penalties. The minimum stay for this trip to Panama is four (4) weeks. I want to start my process to obtain my residency in Panama under the "old" Friendly Nations Visa, what do I have to do? What is the next step? We are currently organizing our agenda for June and July. Clients whose file is already completed (i.e. the company is already incorporated and the bank account is already opened or pre-approved by the bank) will be assigned a presentation date for filing their application in June or July. Due to the current workload the minimum stay in Panama for applications presented in the months of June or July is four (4) weeks. If we have not started to prepare your file yet, please contact us to evaluate your case and analyze if you are still in time to take advantage of the “old” Friendly Nations Visa regulations. I have read on the internet that I can open a bank account in Panama online, without coming personally to Panama. In the practice the personal interview with the client is one of the basic requirements in order to open a bank account in Panama. There are even banks in Panama that insist that you must first comply with the personal interview in Panama in order to subsequently send your file to the corresponding department and evaluate the approval of your bank account. Can you submit my application without me having to come to Panama for it? No. After formally submitting your file to the immigration office, a photo will be taken of you in order to issue your (temporary) migration ID card. This is why all applicants included in the application file must be personally present in Panama. I want to apply for a Friendly Nations Visa according to the "old" requirements. What documents do I need? What do I have to do and what do you do or prepare for me? As a first step please email us a colored scan of the apostilled police record, your passport, (just the photo page with your personal information) and second ID document such as identity card or driver's license, as well as the bank reference letter from your bank and proof of income (payslip of the last three months together with a copy of your employment contract). We prepare the power of attorney, forms and other necessary documents. The translation of the documents (if necessary) must be done in Panama. We will send the documents in advance to the translator. Once you have scheduled your arrival in Panama with us, we will coordinate an appointment in our office where you will deliver all original documents, sign powers of attorney and other documents. Additionally, we will arrange an appointment at the bank to open your bank account and to make the first deposit (in cash), as well as to request the bank reference letter necessary for your application. At all immigration appointments a member of our staff will accompany you and give you the necessary instructions to follow. When filing your application immigration will not ask you any questions or conduct an interview, our firm is in charge of delivering and presenting your file and answering any questions from the officials. Do the documents have to be apostilled? This is correct. The police record must be apostilled. As well as the marriage certificate (if applicable), and if you have minor children that you want to include in your application you must also bring their birth certificates duly apostilled. Do the documents have an expiration date? The police record, as well as the marriage certificate, and the birth certificates of your minor children (if applicable) are valid for six (6) months from the date of issuance (not the date of the apostille). If your marriage certificate was issued before 2021 it is no longer valid for your residency application. You must apply for a new certificate at the competent authority. The document must be certified with an apostille. The same rule applies to birth certificates for (minor) children. If you already have your police record and travel to Panama WITHOUT submitting a visa application, once you leave the country the record automatically loses its validity and you must apply for a new one (with apostille) prior to your next trip to Panama. My police record is expired and I don't have time to apply for a new one, can we submit my application anyway and you will tell immigration that I will provide the document later? No. Immigration does not accept incomplete files. The file must be 100% complete in order to be submitted. At the time of presenting your application an immigration officer will review your file, verifying if all documents are complete and comply with the minimum requirements as well as the expiration dates established by law. It is not possible to ask them to accept the file and submit a missing document at a later date. If the file is incomplete it will not be accepted. Do I need a birth certificate? No. Only if there are minor children that you want to include in your residency application. The birth certificate must be apostilled and must not be older than six months (date of issuance of the document, not of the apostille). My partner and I are NOT legally married, can we apply together? No. In order to apply for any visa in Panama as a couple (same file) you must be legally married. Otherwise you and your partner must file a separate application. Do you take care of translations? That is correct. The law requires that a licensed translator from Panama must do the translations. This is why you must send us all the documents by email in advance (before your trip to Panama) so we can forward everything to the translator in advance. How do I obtain the health certificate? We will give you the address of a laboratory in Boquete to obtain the certificate. The cost of the certificate is between 5 to 10 US dollars. Where is your office located? Do I need to travel to Panama City for the application? Our office is located in Boquete. All appointments for file preparation, bank account opening, presentation at the immigration office will be performed either in Boquete and/or David. Once your residency has been approved and to receive your permanent residency, we can make an appointment at the immigration office in David or Panama City, according to your preferences. I have already booked my flight to Panama for my residency application, can you send me a short timeline? It is best to book a hotel in David or Boquete. Boquete (from a tourist point of view) is more interesting to see. We can send you a list of hotels in Panama if needed. Immediately after your arrival we need an appointment at the office and another one at the bank for the account opening. If you bring the necessary cash to the bank appointment (5,000US$ or 7,000US$ if you are a married couple) we can also apply for the bank reference letter at once. Otherwise, you will have to wait for the international wire transfer. Be sure to activate your online banking while you are still in Panama. Also make a note of your bank officer's contact information. After the appointment at our office, the documents you sign during the appointment (and the copies we make) still have to go to the notary. Then we have to make copies of the whole file (there is one original and then two complete copies of the file). Afterwards we can submit the application at immigration office (for this we need your original passport). In the best case scenario we get an appointment at the immigration office on the same day of the presentation of the file in order to get your photo for the migration ID card taken. However, in most cases it will take up to three (3) days to get an appointment. Immigration will then hold your passport for 48 hours to issue the multiple visa. I already have my residency approved in Panama, what is the next step? When should I return to Panama? Before the COVID-19 pandemic clients had to travel within six (6) months (counted from the date of filing the visa application) to Panama to receive their residency in order to avoid any fines. Now (due to the new health measures) it is possible for us to be notified of your resolution without you being present in Panama. We then pay the new migration ID card and send your resolution with DHL to Europe or USA/Canada. This means that between your first trip to Panama for the visa application and the second trip to Panama to receive your residency, more than six (6) months may pass. On your second trip to Panama you must have your resolution on hand to avoid problems at the passport control at Tocumen airport. Then we will coordinate an appointment at the immigration office in David or Panama City to take the photo for your new migration ID card. The minimum stay for this trip to Panama is seven (7) days, if everything is done in Panama City. Preferably the appointment is set on a Monday morning (7:30 am) and you will be able to travel back to your country on Saturday or Sunday of the same week. I want to form a company for my "old" Friendly Nations Visa application, what do I need, how is the process? We have an online form for you to fill out. Remember that in order to incorporate a company in Panama a minimum of three (3) persons are required. In Panama it is not possible to create a sole proprietorship. The two other persons needed can be friends, family members or relatives. It is not necessary that they travel to Panama or have residency in Panama. It is not necessary that they are Panamanians. I have a company in another country, can I use this company for the visa application in Panama? No. For an application under the "old" Friendly Nations Visa, a Panamanian company must be presented. I want to apply for a residency as a single person, can I form a sole proprietorship? No. Sole proprietorships do not exist in Panama. In order to incorporate a company in Panama a minimum of three (3) persons are required. Apart from you, the other two persons can be friends or relatives. It is not necessary that they travel to Panama or have residency in Panama. It is not necessary that they are Panamanians. Can I use my friend's company for my residency? My friends and I want to use the same company for our residency application, is it possible? In the past Panama's immigration service discovered that lawyers were "recycling" companies for residency applications. This is no longer allowed. You must have your own company in order to qualify for the “old” Friendly Nations Visa. Do I need a business plan? Do I need to proof or deposit the share capital to incorporate my company? No. The capital stock of a Panamanian company is generally 10,000US$, but it is not necessary to consign this capital with the competent authority. How much are the company's annual expenses? The annual maintenance expenses of a company are US$ 567.50 (including taxes) plus accounting expenses. I already have my residency approved in Panama. Can I close the company I submitted for the "old" Friendly Nations Visa application? Yes, if you no longer need the company you can close it. How much is paid in corporate taxes in Panama? In Panama for legal entities it is 25%. The tax office also applies a "notice of operations - commercial license"tax, which is 2% of the net assets or patrimony that may not be less than $100 and must not exceed $60,000.00. Corporations that exceed $1,500,000.00 of taxable income may be required to pay the 4.67% rate. Income generated outside of Panama is really not taxed? Panama is taxed under the territorial system, i.e. everything generated within the coasts of Panama is taxed in Panama. Income generated outside of Panama (offshore) does not pay taxes in Panama. What if I invest in real estate? Is there any benefit for me? Yes, if you wish to apply under the NEW Friendly Nations Law you will NOT need to open a bank account in Panama or create a company. With a real estate investment of minimum 200,000US$ in Panama you qualify for this new visa. Do you have contacts of real estate brokers that you can recommend? Yes, we can gladly send you contacts of real estate brokers in Panama. You can also research rental and sales prices on Panama's most popular classifieds portal called encuentra24.com. I have pets, what do I have to do when bringing them to Panama? There are agencies in Panama City that specialize in "Pet Relocation" services. We will be happy to send you contact information so you can communicate directly with them and verify the necessary documents and the process to follow to relocate your pets to Panama. Do I need any vaccinations to travel to Panama? No. When my wife first traveled to Panama, the Vienna Tropical Institute recommended her all kinds of vaccinations, including yellow fever, hepatitis, typhus, cholera and even rabies. But in the practice, as an adult, at no time have the Panamanian authorities ever asked her for any proof of vaccination.
  7. If you are considering obtaining residency in Panama through the Friendly Nations Visa, be advised that yesterday through the publication of Executive Decree # 197 the requirements of the Friendly Nations Visa have been modified: The up-coming changes can be summed as following: 1. The Friendly Nations Visa will be a two-step application. This means that the foreign applicant(s) must submit an application through a Panamanian lawyer. Once the file has being processed and the petition has been approved the applicant(s) will be granted a residence permit for two (2) years. Contrary to what was granted in the past, where with a single application a permanent residence permit could be obtained. Now after two years, all applicants must present a second application, submitting practically the same documents requested in the first application (with the exception of the governmental state application fees and repatriation deposit) in order to receive their permanent residency in Panama. 2. The second modification relates to the proof of economic activity in Panama and proof of financial solvency. Until now it was necessary to open a bank account in Panama and set-up a Panamanian corporation to fulfill these requirements (although the details have been changed constantly in the past years). The bank account has been eliminated as a requirement, as well as the obligation to have a Panamanian company to demonstrate the intention to carry out an economic activity in Panama. Now, unless you have a guaranteed job offer from a Panamanian company you must proof a real estate investment in Panama for a minimum amount of USD$200,000 in order to qualify for the Friendly Nations Visa. Which documents do I need to qualify for the NEW Friendly Nations Visa? Here we have listed the detailed requirements for you: 1. Three (3) passport-size photographs. 2. Documentation that proves the reason for requesting permanent residency, which may be fulfilled in two ways: Option 1 - for labor reasons: This means a company in Panama wants to hire you as an employee and therefore the employer must present documents to the migration authority, for example: employment letter, certificate of incorporation issued by the Public Registry of Panama that proves the existence of the company, business license etc. The employer and employee must also file for a work permit through the Ministry of Labor. Option 2 - for investment reasons in real estate: The applicant must invest in a property in Panama with a minimum value of two hundred thousand dollars (US $ 200,000.00). 3. In case you apply as a family with children or married couple you must also submit a marriage certificate and/or birth certificate of the (minor) children in order to prove kinship, together with a proof of domicile in Panama and a letter of responsibility signed by the main applicant. Remember that the marriage and/or birth certificate must be duly authenticated via apostille (or through the Panamanian consulate in your home country) as well as translated into Spanish by a licensed interpreter in Panama. The general requirements remain the same: All applicants of legal age must present a criminal background check (duly authenticated via apostille or through the Panamanian consulate in your country, and translated into Spanish by a licensed interpreter in Panama), copy of the complete passport, health certificate, and state application fees (250USD$) as well as repatriation deposit (800US$), among others. I have already planned my Friendly Nations Visa application in June. What do I do now? The changes and new requirements will come into force in August 2021. All clients who wish to present before this date will obtain permanent residency with a single application by fulfilling the requirements to date (bank account, Panamanian corporation etc.). According to the law, the government will respect all residency permits that have been already granted or are currently being processed. After August, when filing for a Friendly Nations Visa a two-step application will be required, and the new requirements (job offer or real estate investment) must be met.
  8. Before starting any business, apart from the study and analysis of the market, profitability and competition, you should investigate the legal requirements in order to execute your entrepreneurial idea. Certain economic activities require a special commercial license. Although in Panama there are not as many restrictions as in other countries when it comes to starting your own business, there are certain commercial activities that are exclusively reserved for nationals. This limitation is based on Article 20 of the Constitution of the Republic of Panama, which establishes that Panamanians and foreigners are equal before the law, but for reasons of labor, national economy, morality, health, public safety and other conditions, the exercise of certain activities may be denied to foreigners in general. Which activities are reserved for nationals? Retail in general is reserved for Panamanians. That is to say, the direct sale of products to the Consumer (B2C). But it is possible to sell wholesale products (B2B) to distributors, supermarkets or other stores that sell directly to the customer. It is also possible to import and export products or merchandise. And, there are certain exceptions when it comes to agricultural products that you produce yourself on your own your farm and then sell them (example farmer's market). The so-called "liberal professions" in Panama require a special permit and can only be performed by Panamanians by birth or foreigners with a letter of naturalization. These include the following professional branches: Nursing, Barbering and cosmetology (there are exceptions for foreigners married to Panamanian nationals), Dentistry, Engineering (Civil, Chemical and Forestry are not allowed, the rest are), Architecture (there are exceptions for foreigners married to nationals), Agricultural Sciences, Pharmacy, Chiropractors, Nutrition, Medicine, Psychology, Medical Assistants, Accountancy, Journalism, Laboratorians, Public Relations, Speech Therapists, Therapists and the like, Economics, Social Workers, Veterinary Medicine, Physiotherapy, Medical Radiology, Law, Dental Assistants, Sociology, Chemistry, Sociology, Chemistry, Education in the following fields: History, Geography and Civics. (The rest of the fields are allowed). If I studied a career in medicine or nursing, can I practice it directly in Panama as a foreigner? The answer is no. Unless you are naturalized and your degree is recognized in Panama, you cannot. But what you can do is to incorporate a company in Panama (for example, a private clinic or an agency offering nursing services) and be the owner of that company and hiring licensed Panamanian employees to perform the service under your supervision. For the activities of engineering, architecture, insurance, real estate companies, certain tourism companies (such as travel agencies or tour operators) among others, there is a special rule that says that the president and legal representative of the company must be the person who holds the license to exercise that economic activity. In that case, it is possible to hire a person with said license, but it is the company that provides the service. The same company of which you are the owner. You would be the one who manages and administrates the company and provides instructions based on your experience and knowledge in that field. But it will be your company together with your collaborators, that will execute the work and carry out the commercial activity. You may not be able to validate your architectural degree in Panama (or it may be a little difficult to do so), but it is possible for you to have your own construction company. Which activities are allowed for foreigners in Panama? Services and wholesale activities are accessible to foreigners. This means that you can open a hostel or B&B, you can open a restaurant, import and/or export products, work remotely offering (digital) services to customers anywhere in the world, invest in real estate and live on rent and much more. In fact we have clients all over Panama who operate touristic and/or gastronomic companies, who are owners of hostels, hotels and restaurants, who produce strawberries, tofu or grow gourmet coffee, who are involved in construction, real estate projects or real estate investment, who offer maritime services, who provide IT services to clients in Germany, logistics services, who sell digital products or software, real estate agents and property managers, who work remotely as freelancers for clients in Europe and/or the United States, who buy nails in Taiwan and sell them to European companies, and much more. As corporate lawyer I am passionate about entrepreneurship and new business set-ups, and there are endless opportunities and entrepreneurial ideas to discover. Tell me about your experience. What is your business idea?
  9. Due to my business I am a frequent traveler. However, flying in times of a global pandemic brings new challenges and experiences. In the last 20 years I have never seen the airports as empty as they are now. It reminds me a lot of the 90s when I was flying for the first time without my family to England. When planning your trip to Panama there are some important details to consider. Important recommendations for passengers coming from Germany, Austria, Switzerland, Holland, Spain, USA, Canada, etc. If you travel from one of the countries of the European Union, United States, Canada, etc. to Panama, at the time of arrival at Tocumen airport you must present a negative PCR or antigen (rapid) test, which must not be older than 48 hours. With this it is not necessary to take another test at the Tocumen airport or comply with any type of quarantine. If you do not carry such test, if your test is expired or if your test does not meet the minimum requirements established by the health authority, you must take a COVID-19 rapid test at the Tocumen airport (at your cost). Requirements for passengers arriving from South America, United Kingdom, India or South Africa The Panamanian health authorities established the following entry requirements for passengers coming from and having stayed or transited through the United Kingdom, the Republic of South Africa, India or any South American country during the last 15 days. In order to travel to Panama, you must present a negative PCR or antigen test which must not be older than 48 hours. Additionally upon registration with the National Immigration Service in Panama, passengers coming from or who have transited through the United Kingdom, South Africa, India or South America, during the last 15 days, must take a COVID-19 test at Tocumen airport at their own expense (costs 85USD). If this test is negative, the person must comply with a three (3) day isolation period (remember that this only applies to passengers coming from South America, United Kingdom, India or South Africa). If you are Panamanian or a foreigner resident of Panama (and have the corresponding documentation, i.e. migration ID card or E cedula and proof of address such as a lease contract or title deed) you may serve the isolation period at your residence in Panama. Otherwise, the isolation period must be spent in a non-COVID-19 surveillance hotel for non-COVID-19 travelers at state expense. Isolation may also be carried out in hotels authorized by the health authority at your own cost. In this case you must present your reservation to the airline before boarding the plane to Panama. Either if you spend the isolation period at home or in a hotel, in both cases, at the end of the three days period, another PCR or antigen test must be performed. This test must be done by the health authority at its expense in a laboratory that has an operating permit from the Technical Board of Health and is validated by the Gorgas Memorial Institute). If the test is negative the the isolation will be concluded. For passengers who test positive upon arrival in Panama, a COVID-19 RT-PCR test and +ICGES analysis must be performed, complying with mandatory isolation for 14 days. Now, in practice, what is it like when you travel to Panama? First, before planning your trip, find out where to get a PCR or antigen test, which it is legally recognized for travel purposes. Nowadays, major airports already have laboratories for such tests. Depending on the day of the week a PCR test can take about 24 hours (although I know of a lab in Vienna that delivers it in 90 min) and an antigen test result can be available in about 15 to 30 minutes. Please note that when traveling, not all countries will accept an antigen test for entry into the country. Panama accepts antigen or rapid test, Spain for example only accepts PCR tests. You will usually receive your COVID-19 test result to your email so that it is available during your trip on your mobile phone. Choose the lab ahead of time and schedule your appointment early to get your PCR or antigen results prior to your flight. It happened to me that I arrived at the airport once on a Sunday thinking I could get a quick PCR test before my trip, and no.... but that’s another story. When you arrive at Tocumen airport in Panama, you must enter with your mask on, and its use is mandatory at all times and in all airport facilities. Likewise, your temperature will be taken by airport personnel. Immigration and customs lines are properly marked on the floor. Immigration and customs agents will serve you through protective windows to ensure physical distance. To enjoy your flight and reduce your stress level, we recommend the following:: 1. Investigate the travel requirements of the country of origin and destination in a timely manner. 2. Do Web Check-In and download your mobile boarding pass. 3. Remember to bring your mask. 4. Arrive at the airport at least 3 hours before your flight departure time. 5. Take into account that in some airports, only passengers who are going to travel are allowed to enter the facilities. 6. Remember that you can bring food on board for your personal consumption. 7. To expedite the boarding process, have your boarding pass ready, as well as your passport and COVID-19 test. 8. When passing through immigration control in Panama, remember to show your passport and migration ID card or E cedula (if applicable). If you are entering Panama as a tourist, remember to have your hotel reservation or place of lodging at hand. Feliz viaje! Have a safe flight!
  10. The owners of apartments or real estate that are subject to the Horizontal Property Regime in Panama, have the obligation to pay taxes, related to their individual real estate unit, as well as regarding the land on which the building is built. Here we are going to explain why you must pay taxes for your condominium under the Horizontal Property Regime, even if you have a tax exemption for the apartment. In Panama many years ago, most of the owners of an apartment (which we will now call PH) took into account that if the value of their apartment was less than USD$30,000, they did not have to pay real estate taxes for the land on which the building is built. But as a result of a law created in 2010 that modified the tax code in relation to real estate taxes, it is established that "the first $30,000 of this fee will not apply to the land of the properties subject to the horizontal property regime". In other words, the land where the building was constructed is taxable since it becomes common land, that is to say, the co-owner's land. The law does not say how to pay the taxes, and generally people forget to pay them and accumulate a debt with the tax office over the years. The Panamanian tax office distributes this tax among all the co-owners of the building and assigns the payment to each one of them in their individual account (according to the respective property number). In my professional opinion, and I agree with other professionals on this, as the land is a common good, that is to say it belongs to all the owners where the building is built, the tax should be paid in full and each owner should deliver his share with the monthly administration fee. But in practice this is not the case. The tax is not included in the common maintenance fees, which is why it is often forgotten. Nevertheless, each individual owner is responsible for paying his taxes and keeping up with his fiscal obligations. Now why is this happening? When a property is incorporated into the PH regime, two properties (fincas) are automatically created. The first property is the PH (the common property) with a different number and which is registered in the PH section of the Public Registry. This property has an initial value that is set by the developer that built the project. The other properties that are created, are all the apartments, one of them or several can be yours. This is called private property. The exempted improvements only correspond to each of the properties of the PH, i.e. the apartments, but this does not include the common property, i.e. the building constructed on that land. By law you will not be able to exonerate the real estate tax of that land. Therefore, if the value of the land is 1 million dollars, the tax to be paid is calculate based on this value at the rate of 1%. And this 1% is distributed among all the real estate units, i.e. all the apartments in the building. The 1% is paid in three installments per year: at the end of April, August and December. However, it is possible to pay in advance. When the exemption period of your apartment expires, you will pay for the value of the apartment plus the amount of the participation coefficient, that is to say, the 1% we have already mentioned. What if I have a "normal" property? How much do I pay? As of 2019, properties declared as family patrimony - principal residence (through a special procedure at the tax office, because nothing is automatic in Panama) must pay a real estate tax according to the value declared in the Public Registry, i.e.: Between USD$0 and USD$120,000 = exonerated. Between USD$120,001 and USD$700,000 = 0.5% of the value. Over USD$700,000 = 0.7% of the value. My property has not been declared a family patrimony, how much should I pay? From USD$0 to USD$30,000 = exonerated. From USD $30,001 to USD $250,000 = 0.6% of the value. From USD $250,001 and USD $500,000 = 0.8% of the value. Over USD $500,000 = 1.0% of the value. Banks became property tax withholding agents. The amendments to the Tax Code now obligates banks in Panama to help the tax office by withholding the respective tax for each apartment or property in general that has been acquired through a mortgage financing. With the exception of new homes which have an exception for up to three years, with the condition that you have never purchased a property before and that it is your first home. Property Exemptions in Panama: Why? The developers, or construction companies according to the tax office are recognized a type of exoneration to the constructions of those projects which construction permit was in force prior to 2018. After this date the developers must pay the respective tax from the legal birth of the PH property. The exonerations in Panama are created with the purpose of promoting the economic development of the country encouraging people, nationals or foreigners who want to do business in Panama and develop the country, and in return the Panamanian government grants them tax incentives. Therefore, farms dedicated to agricultural activities which cadastral value does not USD$350,000.00 are exonerated from taxes every 5 years while maintaining their activity.
  11. What should I do, sell the shares of the corporation I own or just transfer the title of my property to the buyer? In this week’s blog I explain you two very common situations which only apply to Panamanian corporations (SA - sociedad anónima) since private interest foundations have no legal framework to "sell" a foundation because they are originally used as a living will, for estate planning purposes and therefor the transfer of a foundation is not regulated (from a tax point of view), but this would be a topic for another blog. If I wish to sell my property, that is to say, transfer the title of ownership to the buyer, the taxes that the owner must pay to the tax office must be calculated, that is to say, the Real Estate Transfer Tax ("ITBI") which is 2% that must be paid based on the higher value of either the sale price or the updated cadastral value (VCA). But this value will be different from the one calculated by you, because for the Panamanian tax office, the property has as increase in value over the years (regardless of the global economic situation or crisis). Therefore, the period of time the property has been kept by you without selling it, will influence the calculation of the VCA. That means that the VCA calculated by the tax office might differ from the original value of the property. A property that costs $25,000 dollars, and being kept in your hands during 15 years increases its value. When you sell this very same property, the tax office will take into account this increase in value (the system calculates it automatically and you cannot modify it) using a coefficient of 0.75 for the full 15 years. That is to say that for the tax office that property had an increase of the VCA of $18,750.00 dollars. If you add this increase in value to the $25,000.00 dollars that you have in your deed, then your property is now worth: $43,750.00 dollars (for the tax office, regardless of the market value). Now, this tax for this specific example will be about $875.00 dollars, not much compared to the price, and it is still in your best interest to sell the property and not the shares and I will explain why. We continue with the same example of only 2% but with another sale value: If the sale value of the property is $352,500.00 dollars and under the same example, the property was kept for 15 years in your hands gaining value as a long term investment, the tax office is going to perform the same calculation with a coefficient for the land (0.75) and another for the improvements, the house, (0.5) because the value between land and improvements (house), results in the value of the property; In this example it turns out that the VCA is now $529,375.00 dollars. Even if you sell your property for a lower price, the government will base its calculations on the higher value in order to apply the 2% tax. This means you will have to pay $10,587.50 dollars and on top of that, the cadastral value of the property will increase (if applicable). In this particular case, it is recommended to sell the shares of the corporation that owns the property, because there is a capital gains tax on the sale of securities (shares of the corporation) which is 5%. For territoriality purposes, it is considered as Panamanian source income , an income produced by capital or securities economically invested in the national territory, whether its sale has taken place inside or outside the Republic of Panama. Therefore, if you sell the shares instead of the property, you will not increase the official registered value of the property (remember that annual property taxes are calculated based on this value). You pay your transfer taxes for the share deal and sell the property without further charges. The taxes for a share deal must be withheld and remitted by the buyer to the Panamanian tax office within 10 days after the closing. Taxpayers who commit tax fraud, and do not pay this tax to the national treasury, will be sanctioned with a fine of not less than 5 times nor more than 10 times the amount defrauded. The other tax to be paid is the Capital Gains Tax, which is 3% on the official registered price and the gain (if any) on the sale price. It is said "updated" because if you built "improvements" i.e. a house on the property, the improvements incorporated to the real estate must have been declared and registered in the Public Registry of Panama, otherwise legally they do not exist. These taxes were created to tax transfers of real estate, personal property and securities, made by individuals and legal entities. Each case is unique and special and we cannot guarantee that this example is accurate for your needs, but it does provide you necessary information to understand a little more about how buying and selling in Panama works so you can make an informed decision when selling your property or investing in real estate in Panama.
  12. Dear Zion, Yes, you still need an appointment at MINREX. In order to apply for your appointment at MINREX you must submit a digital copy of the document you want to authenticate (this is the requested attachment). I am not sure about the services offered by Mailboxes Etc but our firm can authenticate the documents for you as well. You can drop off the originals in our office at Plaza San Francisco in Boquete and once we have them authenticated at MINREX you can pick them up again. Feel free to contact our office manager Ms Herrera 6980-0688 for further information. Best regards, Abel
  13. When investing in a real estate in Panama, it is necessary to consider several factors and numbers in order to analyze if the purchase you want to make is profitable. This is why it is important to foreign investors to understand how the tax system works in Panama and what types of taxes must be paid when investing in real estate. There are three types of property taxes in Panama, which I will explain in detail below. First of all, Panama does not have what is known in Germany as “Grunderwerbsteuer" (real estate purchase tax). That is to say, the fiscal code in Panama does not contain a tax that must be paid for the acquisition of a plot or lot of land. When buying a property it is the seller who must pay the transfer taxes. Nevertheless it is customary that the buyer pays the registration fees of the Public Registry and the notary fees. What transfer taxes must be paid when selling a property? At the time of selling a property, the Panamanian government charges the seller the following taxes: 2% transfer tax calculated based on the cadastral (registered) value "or" the capital gains value (calculated by the system) "or" the selling price. The highest of these values is the one the government chooses as the calculation basis for charging the tax. And then 3% on the cadastral (registered) value "or" the selling price (whichever is higher) as capital gains tax. There are properties that pay annual taxes, others do not, some have exonerations, what does all this mean? In the past all properties whose value exceeded $30,000 were obligated to pay a progressive percentage of taxes on the cadastral value of the property (annually). However, there were different options to request an exoneration on these annual taxes for a maximum period of 20 years. This no longer exists today. But still the tax office respects the exemptions already granted, and for this reason you will see different offers in the real estate market with valid exemptions. Currently there is a new law where properties whose value is less than $120,000 do not pay taxes in Panama, as long as it is your primary residence. For properties with a cadastral value of $120,001 up to $250,000 the annual property tax rate is only 0.5%. Properties from $250,001 and above pay a rate of 0.7% (seven tenths of 1 percent). Now, if we are talking about horizontal property, that is to say, I have an apartment, what taxes do I pay? First of all, there are fixed expenses for the apartment that are calculated based on the registered square meters of construction, and from this measure the monthly maintenance fees that must be paid to the building’s administration is calculated. The maintenance fees must be paid on a monthly basis (you can also pay in advance if you wish) and never stop. The last reform of the law in 2020, made it very clear that for no reason it will be possible to stop paying the common maintenance fees since with these expenses the building exists and is maintained, that is to say as if it were a child's alimony. There is also a real estate tax that is divided in two, i.e. the tax on the apartment and then on the coefficient of participation of the land on which the building was constructed. It is important to mention that the payment of the (annual) property taxes is not included in the payment of the monthly maintenance fees. It is the responsibility of each co-owner to comply and pay their tax obligations for their apartment with the Panama tax office. What is a NIT? In order to have this information of how much you owe and if you are up to date in your tax obligations, it is advisable to process a user and password (called NIT) to have direct access to the electronic platform of the Panamanian tax office called "e-tax". This way you can check your current account statement, pay the corresponding taxes by credit card and even request a certificate of good standing, all of this can be done online. The NIT is also mandatory when selling your property in order to process the payment of transfer taxes and to obtain the documents requested by the notary for the closing of the sale. What if I sell the shares of my company ("share deal") instead of the title of my property ("asset deal")? Years ago the Panamanian government has regulated the sale of corporate shares in order to avoid the evasion of the transfer tax when selling a property. Now there is also a tax that must be paid if you have a corporation and this corporation owns a property and you sell the shares of your corporation (as a package). As the owner of the shares the seller pays a tax of 5% of the sales value, but the payment must be made on his behalf, by the buyer and both will have the legal responsibility before the Panamanian tax office. In the past the sale of corporate shares was a very popular strategy used to optimize the transfer taxes when selling a property, however each case is unique and individual and requires prior analysis by the lawyer. We will talk about this topic in the next blog, stay tuned!
  14. Many clients moving to Panama want to start taking their first steps in the Panamanian banking system, and they always ask me the same questions. It is for this reason that on this occasion I want to talk about banking products in Panama. The Panamanian banking system does not resemble the South American banking system, nor does it resemble or copy the European banking system nor that of the United States. In Panama we are used to take the best of each country and then make our own version. Over the years Panama created its own banking system which I want to explain in general today. What is a Savings Account in Panama? In Europe banks are not paying interests for keeping our money with them. If we remember well a bank lives by using other people's money and makes money that way. There are many ways how the bank can make money from other people's money, but we are not going to talk about that subject this time. When we say that we want a savings account in Panama, it is not the same as a savings account in Germany, nor is it the same as a checking or commercial account. That is to say, the savings account in Panama can be opened by any person, but it does not mean literally that it will be used exclusively to save up money. For the Panamanian banking system you can manage the savings account as you see fit. That is to say, you can use it to receive your salary, to pay the expenses of your household and you can even give the account a commercial use, in case you are an independent entrepreneur or freelancer. It is important to mention that banks in Panama do not distinguish between accounts that are being used for savings, for personal use, or even commercially. It is even possible for a corporation to open a savings account. The bank will pay you interests on your Panamanian savings account. These interests are calculated per year and are paid monthly at the closing date of each month. In Panama, bank accounts are not restricted or limited to a number of monthly transactions, as it is the case with certain banks in the United States where they tell you that you can issue transfers or move your money from one place to another only for a certain number of times. In Panama there is no limit, I can wire as many times as I want from the bank account and I am not charged for it. There will be charges made by the bank for the handling, that is, if I send money abroad from Panama or receive money from abroad into my Panama account. There are also fraud insurances that are basically deducted on a monthly basis, but they are no banking fees charged for the bank account to exist. If you want to withdraw money from your bank account in Panama using your ATM card (tarjeta clave) it is recommended that you use an ATM of the bank where you have your account. Otherwise, banks usually charge a small fee for the use of the ATM. In Europe there are still banks that offer savings passbooks, which are exclusively for personal savings. This modality existed in Panama, but was discontinued. Perhaps a reference of this can be found in the state bank called Caja de Ahorros de Panama. Bank interests are not taxable in Panama. In Panama the updated Tax Code states that interests recognized or paid on savings, fixed-term deposits or any other type of account held in banking institutions physically established in the Republic of Panama, whether they are local or foreign deposits, will not be subject to income tax in Panama, according to the definition provided in article two of Cabinet Decree 238 of 1970. What is the difference between a Savings Account and a Checking Account in Panama? A savings account pays interests, but a checking account does not pay interests. A checking account is entitled to a check book, which will be charged separately by most banks. This type of account exists practically for doing business or execute commercial activities. The conditions to open a savings account in Panama reduce the initial deposit amount, as it is a savings account, but when it is a checking account the initial deposit is higher. This initial deposit cannot be withdrawn and must always be kept as a minimum monthly balance of the checking account. Otherwise the bank will penalize you. What types of cards exist in Panama? The three most common types of cards issued by banks in Panama are: ATM cards, debit cards (with Visa or MasterCard logo, etc.) and credit cards. ATM cards are exclusively connected to a savings account. This type of card only works in Panama and the bank handling fees are very low. This card usually has no name, some have numbers, some do not have much information, this is normal. They can be used to withdraw money at any ATM nationwide or to pay in supermarkets or stores by using a PIN number. Debit cards with Visa, MasterCard or other logos basically work like a prepaid credit card, i.e. you pay with your own deposited money, but without entering a PIN code, but like a credit card; However, the card has no credit line. If the bank account that is connected to this debit card does not have sufficient funds, the card will be rejected. Credit Cards in Panama Credit cards in Panama works like the credit cards in the United States, this means, the bank opens a credit line for a specific amount depending on your income. The bank will lend you that money and with that money you pay with the card. The money the bank lends you is not connected to your savings or checking account. The bank will give you 30 days to pay back the money. In the practice the bank will give you the opportunity to pay back the amount well before the 30 days, but they will not tell you until the end of the month. Then the bank can charge you a monthly interest for the money you borrowed. Mismanagement of a credit card can create indebtedness. If you pay the full amount spent on the card before the closing date, you owe the bank nothing. If you don't, you must make at least the minimum monthly payment to be “in good standing” with your obligations to the bank. And so the monthly cycle begins again. In Panama there exists the Panamanian Credit Association (APC) which registers the credit and service relationships that a person maintains. Based on this registry the banks investigate and verify your degree of indebtedness. Therefore, banks may contact you to offer you more banking services and products. In Panama it is normal for people to keep three, four or five bank accounts since each bank can offer them different products and services in competition with other banks and there are banks that will offer to pay you better interest rates than others. It is well known that in Europe people often stay with one bank for 40 years, this practice is not the same in Panama. Online Banking in Panama Banks in Panama also offer online banking, many with their own mobile APP. We recommend that when you are opening your bank account in Panama you do not leave the bank until a bank officer helps you get the online banking running and your card activated. There are banks in Panama that do not invest much in the quality of customer service and although they offer to pay good interests and have a nice selection of banking products they are very deficient in customer service. So, if you are abroad, getting the bank to help you with Online Banking is going to be a problem. Digital Banks and Fintech Banks In Panama there are no Fintech banks. For this reason banks with banking licenses are very jealous and for this reason there are banks that will not accept to receive international transfers from Fintech banks (like Wise, formerly known as Transferwise). Fintech banks as we know are digital banks that are very economical and have zero maintenance costs because they do not exist physically in one place and do not have employees in an office offering walk-in customer service, and therefore they can compete. These Fintech banks are distinguished by handling multiple currencies in a single account and thus compete with the fees of physical banks. But as everywhere in the world, demand creates new services and products and we might see some interesting changes in the Panamanian banking market in the future. What is your experience with the banking system in Panama? Send me your questions!
  15. Foreigners using their country’s driver's license may legally drive a vehicle in Panama for up to 90 days. Once a foreigner obtains temporary or permanent residency in Panama he/she may request the homologation of his/her driver's license and obtain a Panamanian driver's license. To do so, it is not necessary to hand over your current driver's license or take any kind of driving test. The Panamanian government contracts a private company called SERTRACEN for the processing of driver's licenses nationwide. Only foreigners with residency status in Panama (either temporary or permanent) are eligible for a Panamanian driver's license, foreigners with tourist status are not. Below we have summed up the steps to follow to obtain a Panamanian driver's license for you. What documents do I need? 1. Original and copy of your migration ID card (valid and legible). 2. Original and copy of your passport (valid and legible). 3. Your driver's license (valid and legible). 4. Authenticated certification of the validity of your license. 5. Blood type: If your driver's license does NOT show the blood type and RH factor, a certification issued by an authorized Panamanian laboratory must be submitted. The laboratory certification is valid for six (6) months, counted from the date of issuance of the document. Names and surnames must be identical or coincide in all documents or requirements presented. All documentation provided must be in good condition and not damaged. Step 1: How do I get my license certified? The first step is to contact the embassy or consulate of your country to request the certification of your driver's license. The process varies from embassy to embassy, for this reason it is advisable to make an appointment in advance either by phone, online or by email in order to confirm the necessary documentation, how long it takes to issue the certification and the costs. U.S. citizens should approach the American Citizen Services at the U.S. Embassy in Panama City. There is a standard form (sworn affidavit) to request the driver's license certification. Keep in mind to verify that your name, personal information, driver's license number, etc. are written correctly on the certification when you pick it up. In addition, the certification must contain the following information: 1. The term "certify" or "declare", 2. Name of the officer in charge of validating the information, 3. Name of the applicant, identification number, number of the license to be validated; in addition to the date of issuance and expiration. If the license does not have an expiration date (indefinite) the certification must state so. 4. Place or country of issuance of the driver's license. 5. Description of the different categories of vehicles, 6. Stamp and original signature of the officer issuing the certification. 7. Apart from the certification the consulate/embassy must issue an authenticated copy of both sides of your driver's license (front and back), with original stamp and signature of the officer in charge of validating the information. Step 2: How can I authenticate the certification? The certification and the authenticated copy issued by your Consulate/Embassy must be further authenticated by the Ministry of Foreign Affairs (MINREX) in Panama City. The request for authentication by MINREX must be made through their web page https://sigob.mire.gob.pa/registrocorrespondencia/. Once the application is completed, the respective department of MINREX will give you an appointment. The payment must be made at the Banco Nacional after receiving the confirmation by e-mail of the amount to be paid. Step 3: Get an appointment at SERTRACEN Once the documentation described above has been completed, an appointment must be made at one of SERTRACEN's branches. All license applications must be submitted in person by the applicant. The appointment must be requested online through the following web page: https://citas.sertracen.com.pa/Citas/public/cita.jsf . On the day of the appointment you must present all documents to the officer in charge at the SERTRACEN office, your personal data (including emergency contact, organ donor or not etc.) and the photo for your new license will be taken, also an eye and hearing test must be performed. People who wear glasses can use them for the eye test. The cost of the driver's license is USD$40.00 (includes eye and hearing test). The driver's license is valid for four (4) years. If you are a temporary resident in Panama and you do not have your permanent residency yet, your Panamanian driver's license will have the same validity as your residency. Licenses issued with age restrictions will not be approved, nor will international licenses. Licenses issued in one of the EU countries must comply with the new EU format. ”Old” licenses (Papierführerschein) will not be accepted. Special requirements for drivers over 70 years of age All drivers over seventy (70) years of age must opt for a driver's license valid for two (2) years. They must also present a certificate of good physical and mental health from a Panamanian doctor specialized in internal medicine or geriatrics. The document must have the full name, passport number, stamp and original signature of the physician. The medical certification is valid for six (6) months from the date of issuance of the document. Drive carefully!
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