Why The Panama Forestry Permanent Residency May Be The Best Option In The World?

Panama offers a variety of essential advantages over other popular choices of second residency countries. While figures show that the US has been the top choice for many years for Chinese nationals when choosing a second residency, you may find that Panama offers a unique opportunity that is now becoming a top choice.

One of the most common questions when choosing a second residency is: Which country and why that country? Which benefits can I obtain by becoming a resident of that country versus the costs of getting the residency? Panama offers a low cost straightforward process, easy to maintain residence status, tax benefits, immigrant-friendly culture, strong and growing national economy, a non-saturated emerging market with loads of unexploited investment opportunities, cost-benefit ratio and more. You will quickly discover the vast benefits Panama can give you as a resident. Find out how Panama measures up.

1. Panama offers several affordable residency options

Panama has proven to be an immigration friendly nation in several ways, for example, by having a variety of residency options, that are relatively affordable as well as obtainable through a straightforward process. These include various investor visas, visas for professionals for specific jobs, Friendly Nations visa, visa for retirees, etc.

The Panama Reforestation Visa

Chinese citizens are qualified for the very attractive reforestation residency visa even before retirement, and now is an excellent time to tap into this opportunity!

This residency opportunity highlights the essence of Panama's friendly attitude towards foreign private investment and residency options. The project is green, in harmony with nature and supported, even encouraged, by the government. A more harmonious way of gaining a second residency is hard to find.

Panama Forestry offers an attractive USD 138,000 program that includes all the legal processing and governmental fees plus 100% ownership of 5 hectares of a managed forestry plantation. Moreover, Panama Forestry maintains a stake in each project (of the final teak product only - the land is 100% yours) ensuring that everyone involved will support the best outcome possible throughout the lifetime of the project. If you have any dependents, they will automatically qualify under this program too

Compare this to a minimum of USD 300,000 for alternative investment visa options that qualify under the Self Economic Solvency Visa, and which are much more volatile plus legal and processing fees.

By contrast, in the US it is impossible to obtain residency so easily, as it requires an investment of USD $500,000 to $1,000,000 plus legal fees to apply for residency through any kind of investment. Increasing minimum investment amounts, waiting lists, and stricter requirements are all recent initiatives from the US government, whereas Panama maintains an open and positive approach for foreigners seeking a second residency. For the US residency you may just paying a lot more for a lot less value. Singapore is a very good residency to have but the cost of residency through investment is about $1.9 Million USD.

2. Straightforward process

Panama has very clear rules about the requirements for the different residency programs, as well as the time frame and steps to process a petition. If the applicant fulfills the very reasonable requirements, a Panamanian temporary residency can be approved within six months from the date of submitting the application. The process of obtaining permanent residency will then automatically follow when choosing us as your investment and legal partner. We outline for you the entire process from start to finish, so you know exactly what to expect and when.

As the US has become increasingly unfriendly towards immigration, the processes for applying for residency have become lengthier and more difficult, especially if you don't put down a very sizable investment amount at about USD 1,000,000. At the same time, the US has lost much of the appeal of living in the US, which is a required part of having residency there.

3. Maintaining Residency

Panama does not require that you relocate to maintain residency. The only requirement of physical presence is that you must spend at least one day every 18 months in Panama. However, we do invite you to spend a bit more time enjoying the warm summer breeze, good food, and multicultural, urban vibe, or one of the many pristine beaches and natural sites including Unesco's World Heritage sites.

By contrast, in the U.S. you're required to stay in the country for a proven minimum of 183 days per year in order to keep your residency, limiting your freedom significantly and also making you a full-time tax resident of the US, which will tax you on your worldwide assets and income.

4. Taxes

Panama has a territorial tax system, considered to be one of the best tax systems worldwide. It means that they tax Panama source income only. It does not matter what your residency or citizenship is, as they do not tax the person, but only tax income based on the source; and only if that source is from within Panama and in a category that is required to pay taxes. Simply put, places such as the US tax residents and citizens on worldwide income, whereas Panama allows all residence and citizens worldwide income to be 100% tax-free. This is a huge plus to Panamanian residency and citizenship.

Your Panama reforestation investment is tax-exempt! This also means zero tax filing, unless you have additional Panama source income subject to taxation. That's right; even though you will have Panama sourced income from this green project, you will pay zero taxes and do zero filings in Panama, as income from this certified forestry projects is tax-exempt in Panama.

Moreover, when/if you choose to relocate to Panama and start having other Panamanian sources of income in the country, you will face very favorable taxation. Remember that all income generated from our reforestation programs is tax-free!

Since in Panama you will only be required to pay tax on the income you generate within the country, any foreign assets, foreign investments, foreign income, or income from the sale of products or services generated in Panama but to people, entities, or companies abroad are tax-free in Panama. You do not have to pay tax on foreign income.

The tax rate on income in Panama is as follows:

1) The first USD 11,000 you make per year is tax-exempt and if you make less Panama Source income then this there are not even tax filing requirements

2) Income between USD 11,000 and USD 50,000 per year is taxed 15%

3) And the income you make above USD 50,000 per year is taxed 25% (if you make above USD 50,000 the first USD 50,000 is still taxed as described in point 1 and 2)

Note: Panama corporations do pay tax at a rate of 25% from the first $1 of Panama Source income all foreign source income is tax-free for Panama corporations as well making Panama an excellent location for international investment holding companies.

In addition to reforestation investments, you can also enjoy complete tax exemption on many other income sources. Panama has a long list of deductions as well as other benefits making life easy. Examples include no inheritance tax, no exit tax if you want to leave and no personal asset tax or reporting requirements on any personal assets you have in Panama or worldwide.

In conjunction with low taxation, Panama has a relatively large public spending. For example, large scale infrastructure projects such as a well-functioning metro, where a third line is about to be added with no increase in taxes, several bridges crossing the Canal, new cruise terminals, the "Zona Libre" duty-free zone mall, mining projects, energy supplies, etc. These projects are all possible without high taxes because of the income the Panama Canal generates. Panama also has a lot of unexploited land and natural resources, which means that the country has the opportunity to produce an agricultural and energy surplus in the future. Panama is a low taxation country that is also financially stable and growing on every level.

This is in stark contrast to the USA, which requires all residents or citizens to report all assets and income they have anywhere in the world with the right to confiscate any unreported assets as well as up to 20 years in prison. For a more extensive overview of taxes and benefits see Deloitte

By comparison, in the U.S. you are required to file and pay taxes on worldwide income, no matter if where you live. You are also required to live in the U.S. if you want to maintain residency. It is considered a very unfavorable system for anyone wanting to enjoy some tax relief and it may be difficult and risky to navigate for foreigners.

You must report all your worldwide assets to the US government, even if you don't live there permanently. Failure to do so can result in a 20-year prison sentence and the U.S. will confiscate 100% of all your global assets as compensation for your failure to disclose your assets on all the correct forms. You have to file and pay tax on any income you earn anywhere in the world at a rate of up to 37%. Moreover, you have to report all assets you own anywhere in the world to the U.S. government every year, if your combined assets exceed $10,000 in value. The minimum cost of filing taxes in the U.S., even if you have no U.S. source income, is from about $3,000 per year and up.

Also, If you change your mind and want to stop being a citizen in the U.S., you will have to give the U.S. tax authorities 23.8% of your worldwide assets in exit tax (unless you did not report them, in which case you lose 100% of the assets and could go to prison).

5. Panama's economy is continuously growing

As per the World Bank, over the past decade, Panama has been one of the fastest-growing economies in the world, with an average annual growth rate of 5.6 percent over the last five years. The country ranks as the second-fastest growing economy in Latin America and the Caribbean (surpassed only by St. Kitts and Nevis), in an environment where public investments have been high and private investment has remained strong. For detailed information visit the World Bank website on Panama

Panama can be described as having three almost separate economies, which helps the country immensely. It helps the country through times of recession and it makes it possible for the country to have high public spending with low taxes. The Panama Canal is always open. No matter what is happening in the local market, it operates and it is a very large contributor to the public budget. The Canal is the main reason that the government can continue to make large scale investments in infrastructure projects while keeping taxes so low. The banking sector in Panama also runs almost independently of the local market, as Panama is the financial and investment hub of the region. The country's banking sector is much more linked to the international market than the local. Lastly, Panama's local market is more or less like any domestic market, however with a lot of local businesses supporting the operations of the Panama Canal and international business structures and activities especially within logistics. Moreover, prospects for the domestic markets are looking good. Panama is developing fast and has the national resources to become a net food and energy producer. The country has a unique prosperous economic outlook.

In 2019 Panama's economy grew at about 3.8%, which is slow for Panama but still the best performing in the region and a pretty respectable and sustainable overall growth rate. The national debt is 40% of GDP. It was 115% of GDP in 1990 (back when the U.S. was managing the country). Panama's spending on Defense is $0 since it does not have an army. 100% of the country's budget goes to infrastructure and government services for its residents.

Conversely, in 2019 the U.S. economy grew at about 2.3%, and it is expected to slow down significantly in 2020 and 2021. The national debt is 105% of GDP and increasing by about 1 trillion per year. It was 31% of the GDP in 1971. There is no real limit to the USD debt. Defense spending in the U.S. is now 1 trillion per year. The US recently passed legislation to allow the unlimited printing of money.

Panama is one of the top recipients of FDI in Central America, reaching 1472.40 USD Million in the third quarter of 2019.

The growth in the levels of FDI highlights the reasons why Panama is an attractive jurisdiction for investment. Many incentives draw investors to Panama. Not only is it politically stable, but it also has a stable economy that is still growing and a rational tax system.

6. New investment opportunities

Panama, as a developing country, has a variety of fields yet unexplored by Panamanians and foreigners. As an entrepreneur, you will find Panama as your playground.

The Reforestation Project is a unique opportunity to tap into this unexploited market. It has the dual benefits of providing you and your family with permanent residency, in addition to investing your assets in a parcel of land of which you have 100% ownership, with a managed teak forest growing on it. A very solid investment to secure your future in case something happens in your home country, you are set to go, and your investment will even be in a non-saturated area supported by the local government.

Panama invites you. Residency is more than just a possibility; it is encouraged by the government through foreign investment opportunities with good value and high security. Panama welcomes foreigners like you to invest in reforestation projects, which is why they have made it attractive and relatively simple for you.

Panama has enacted specific laws to encourage and protect private foreign investment, as well as offering permanent residency and citizenship to people who invest in Panama. Moreover, the projects are green, meaning that you will obtain residency through a project that is in harmony with both nature and the local government.

There are many opportunities for investments in Panama, as the country develops a lot of interesting key areas within agriculture, energy, and more. Panama is the place for someone looking for new investment opportunities in emerging markets. Panama is a logistics hub with a strong international financial sector. Panama makes it easy and safe to manage your assets.

We can help you get familiar with the market through our network if you want to take further advantage of this emerging market to obtain other investments in Panama as well.

7. Possibility to obtain Panamanian Citizenship

After five years of permanent residency in Panama, you can qualify for Panamanian citizenship, without making further investments. There are some advantages to becoming Panamanian, including the Panamanian Passport and a clear and friendly taxation system. The Panamanian passport is ranking 28th worldwide and with it, you may visit 124 countries, including most of Europe. There is no other country's passport that you can obtain for under USD 200,000 with the benefits of the Panama passport (US residency options start at $500,000 and up). The current Panama reforestation permanent residency program truly offers exceptional value.

In comparison, the US has stricter requirements for converting residency to citizenship and a lengthier process. Money usually talks, and you may be able to pay your way to an easier and faster process opting for investment visas starting at USD 1,000,000

Is Panama Paradise?

It may seem so, with a friendly attitude to foreigners, untapped investment opportunities, favorable taxation system, and straightforward visa processes it offers. In Panama, you can enjoy a high standard of living, good infrastructure, top health care, a modern city, and many pristine beaches and landscapes, among many other attractions.

We do want to be transparent and give you realistic expectations so you have the best possible foundation for making the right decision for you and your family and find the place and investment type that is right for you. Naturally, Panama is not perfect. Things to consider, especially if you are thinking of relocation with your family is that Panama is still not a first world country. It is an emerging market and you will still have to deal with the mentality of third world countries with many Panamanians and some foreigners. Service and efficiency are not always at their best in all aspects of life here, and access to the same wide variety of comforts as in the U.S. should not be expected within the country's borders. However, Panama is a hub for flights North and South and thus has some of the cheapest and most frequent flight connections of the region, so a shopping trip to very low-cost Colombia or the vast consumer market in the U.S. is easily accessible.

Panama has a unique and privileged location in Central America, as the bridge between North and South America, and with the Panama Canal, it is the logistics hub between East and West as well. For this reason, Panama is a logistics center that plays an essential role in global commerce and travel.

Tocumen Airport is today the Hub of the Americas, making Panama the perfect place to live if your lifestyle involves traveling abroad.

Panama is also much more than a centrally located international business city. The beautiful countryside is a mixture of coastal towns, mountains village, and Dairen jungle. Along the hundreds of miles of oceanfront areas, you can visit Pedasi in the Pacific and San Blas in the Caribbean. For mountains, you can visit the Boquete mountain coffee regions of the worldwide renowned Geisha coffee. For Jungles, an exploration trip to Darien will take you far from the modern skyscrapers of Panama City.

Expats can feel isolated when moving abroad because of language and cultural barriers. However, Panama has a large international community and is a trendy destination for retired expats from around the world. It's one of the reasons which makes Panama an easy place to settle down in. Even though Spanish is the official language, and the majority of the population is not fluent in English or another language, Panamanians will do their best to try to help you and will make you feel welcome. However, the majority of law firms and businesses have English speaking staff. Panama has the largest Chinese community in Central America and is on good political terms with China with an Embassy of China in Panama City.

Panama can be an excellent place to invest while planning for retirement in this magnificent country. The steady growth of the expats community, the amalgamation of different cultures, and the kindness of the Panamanian people make relocating to the country easier than some expats expect. Also, you do not have to live in Panama to maintain residency, making it a perfect 2nd residency and citizenship country and, if instead, you choose to live in Panama, that can be an easy and very pleasant choice as well.

Are you ready to invest in your future? If so, contact us today.

Remember that every great journey begins with a first step.

For more on living in Panama, click here (links to Why Panama)

Note: regarding the "Panama Papers" - for those that have read the news and think it is related to doing business in Panama – it is NOT. The name was coined due to the fact that the computer that got hacked was in the Panama law office of Mossack Fonseca (they had offices in over 40 countries).

It is good to be aware that this is information on companies which were structured not just in Panama, but also in the U.S., the U.K., the British Virgin Islands, as well as other countries. Panama has become much more aware of cyber-security since this event.

For more information on our current residency visa investment package opportunities, contact Jeff@Panamaforestry.com. Representative for China Zoe Zhu Email: ZoeZhu@PanamaForestry.comWeChat/WhatsApp: 008613503002464.