On October 15, 2024, the Republic of Panama issued Executive Decree No. 193, amending and adding provisions to Executive Decree No. 722, which was originally issued on October 15, 2020. This amendment introduces significant changes to the subcategory of Permanent Residency as a Qualified Investor under the Economic Residency category. The purpose of these modifications is to attract foreign investors who can contribute to Panama’s economic development, thereby strengthening the Qualified Investor Program.
One of the major changes includes the establishment of a minimum investment amount of US$300,000.00 from foreign sources for applicants seeking permanent residency as Qualified Investors. The investment can be made either personally or through a legal entity, where the applicant must be the ultimate beneficiary. The Ministry of Commerce and Industries of Panama, through its National Directorate of Investment Promotion, is tasked with issuing certifications confirming that the investment meets the required criteria. These certifications will be submitted to the National Migration Service as part of the residency application process.
The decree also outlines the specific types of investments that qualify for the residency application. First, real estate investments are eligible, provided the foreign individual invests at least US$300,000.00 in property located within the Republic of Panama. This property must be free from encumbrances, although applicants who invest in a property worth more than the required amount may finance the difference through a mortgage from a local bank. Additionally, if the investment is made through a promise to purchase and sell contract, the investor must meet certain conditions. These include using a trust administered by a licensed Panamanian bank and submitting documents such as the notarized promise to purchase and sell contract and trust agreement.
For properties not yet constructed or registered, investors can also apply by making a full payment for the property in advance. In such cases, the investor must present a bank performance guarantee issued by the developer or seller. This guarantee ensures that the investment is secure until the property is completed, segregated, and registered in the investor’s name. The guarantee must cover the total value of the investment and remain valid until the registration process is completed. Additionally, the guarantee must be renewed and presented annually to the Ministry of Commerce of Panama and Industries to obtain the necessary investment certification.
The changes are aimed at further enhancing the attractiveness of Panama as a destination for foreign investment, ensuring that these investments continue to drive economic growth and provide benefits to both the country and the investors. Through these amendments, Panama seeks to create a more secure and regulated environment for qualified investors while ensuring that the investment meets both national and international standards for economic development.
If you are ready to apply for permanent residency under the qualified investor category, contact us at info@lawyerinpanama.com.