Panama expat and nomad tax incentives in 2026: visas and 0% foreign income

Last reviewed: November 2026 · Reviewed by Stéphane Gombauld, tax expert, technologist and digital nomad

You work for foreign clients or a foreign employer, and Panama keeps coming up as a base. The pitch is simple: foreign income is not taxed there. This guide explains how far that goes in 2026, which visa fits your profile and where the limits are.

Panama expat and digital nomad incentives in 2026: the key figures

Panama writes amounts in balboas (B/.), which trade at par with the US dollar.

What changed for 2026

• Visa forms. The Servicio Nacional de Migración's requirement forms for the categories above carry April 2026 upload dates. Check them before you apply.
• Income tax scale. The scale is unchanged, and PwC, reviewed on 4 August 2026, reports no significant development for individuals.
• Programmes missing from the official list. The Migration Service's current permit list shows no "Qualified Investor" or "Friendly Nations" entry by name. Some forms there are shown only as images, so confirm any such route directly before you plan around it.

Is this guide for you?

Read on if you…

• earn most of your income from clients or employers outside Panama;
• are retiring with a pension, or investing a lump sum, and want residence;
• want to know whether a Panama visa also makes you tax resident.

Probably not your case if you…

• plan to work mainly for Panamanian clients, whose fees Panama taxes normally;
• are a citizen of a country that taxes its citizens abroad, since Panama cannot switch that off.

How does territorial taxation work for expats?

Panama taxes income from Panamanian sources. The DGI's income tax notes exclude foreign-source income from the taxable base and deny deductions for costs tied to it. PwC (secondary) says residents and non-residents alike are taxed only on Panamanian-source income.

Panamanian-source income follows the DGI tariff: 0% up to B/.11,000, 15% on the part from B/.11,000 to B/.50,000, and B/.5,850 plus 25% on the rest. Companies withhold 10% on dividends paid from Panamanian-source profits, and 5% on dividends from foreign-source or export profits, per the DGI.

Here's the catch: "foreign-source" is about where the income arises, not where your client sits. The official pages we read do not say how the DGI treats work you perform physically in Panama for a foreign client. Treat that as the grey zone, keep clean contracts and ask a local adviser before you rely on 0%.

Which visa fits your profile?

Remote workers and digital nomads

The visa de corta estancia para trabajador remoto (short-stay visa for remote workers) sits under the Migration Service's non-resident visas. Form PM18 sets these conditions:

1. Foreign-source income of at least B/.36,000 a year, and an employer letter stating at least B/.3,000 a month from a foreign source.
2. Medical insurance valid in Panama for the whole stay.
3. A signed sworn statement that you will not accept job or service offers in Panama from local people or companies.
4. Self-employed applicants add a notarised sworn statement on their clients, earnings and source of funds.
5. Fees of B/.50 for the card and B/.250 payable to the Migration Service.

The visa lasts nine months and can be extended once for the same period, on the same conditions. Its legal basis is Decreto Ley 3 of 2008, Decreto Ejecutivo 320 of 2008 and Decreto Ejecutivo 198 of 7 May 2021.

Good news: the visa needs foreign income, so it matches the territorial logic. Here's the catch: the sworn statement rules out local clients, and it is a short-stay, non-resident permit, not a path to a tax residence certificate.

Retirees

Form PE2 covers the jubilado pensionado. You need a lifetime pension from a foreign government, an international body or a private company of at least B/.1,000 a month. If you own Panamanian property worth more than B/.100,000 in your own name, the minimum falls to B/.750. Each dependent adds B/.250 a month of proof. The permit is indefinite, so there is no renewal.

Investors

Residence by property investment (article 193 of Decreto Ejecutivo 320, as amended) requires at least B/.300,000 in real estate in your own name, free of liens, with proof the funds came from abroad. Each dependent adds B/.2,000. The permit lasts two years, then you can apply for permanent residence. Fees at the application stage are B/.250 to the Treasury and B/.800 to the Migration Service.

Form RP6 allows B/.300,000 in a mix of real estate and a fixed deposit held at least three years in a general-licence bank. Two smaller routes exist. A temporary agrarian-investment permit needs B/.60,000 in farming or aquaculture, renewed every two years up to six. Forestry investment needs B/.100,000 for a provisional permit, or B/.350,000 for permanent residence, kept for at least five years.

Does a Panama visa make you tax resident?

Not by itself. A visa gives you the right to stay. Tax residence follows facts. PwC (secondary) gives one test: you are physically present and generating income in Panama for more than 183 days in the year. Two consequences follow:

• Getting proof of Panamanian tax residence takes evidence of presence and activity, not a visa. We found no official page on the certificate procedure, so ask the DGI. Our tax residency in Panama and practical guide to obtaining your tax residency in Panama walk through the steps.
• Your old country may keep taxing you. If your home, family or business stays there, you may remain resident there, whatever your visa says. Read how to cease your tax residency in Panama for the mirror case.

Honestly? For most digital nomads, the hard part is not getting into Panama. It is leaving the previous country cleanly.

What doesn't the territorial system cover?

• Panamanian clients. Fees from Panamanian clients are Panamanian-source and follow the 0% to 25% scale.
• Panamanian property. Sales are taxed on the gain (see capital gains tax in Panama).
• Consumption taxes. ITBMS (Panama's VAT) is 7% on most goods and services, and property tax applies like for anyone else. See specific taxes in Panama.
• Your citizenship country. A few countries tax citizens on worldwide income wherever they live. Panama's territorial system does not change that.

Compare with the regimes in Paraguay and Brazil before you choose a base.

Common mistakes (and what they cost)

• Taking Panamanian clients on a remote worker visa → you breach the PM18 sworn statement, and that income is Panamanian-source and taxed up to 25%.
• Assuming a visa ends your old residence → your home country can tax your worldwide income for years.
• Counting on a tax certificate from a short-stay visa → it is a non-resident permit, so banks and treaty partners may see you as resident nowhere.
• Ignoring where the work is done → the DGI can assess 0% to 25% income tax on work performed in Panama, plus interest and fines.
• Missing the filing date on Panamanian income → individuals file by 15 March (15 April with an extension); a late return costs a B/.100 fine under art. 293 of the Tax Procedure Code.

Frequently asked questions

Does Panama tax foreign income in 2026?

No, as a rule. Panama taxes Panamanian-source income only, for residents and non-residents alike, and the DGI excludes foreign-source income from the taxable base. Income from Panamanian clients, employers or property is taxed on the 0%, 15% and 25% scale. Always check where the work is performed.

Is there a digital nomad visa in Panama?

Yes. The short-stay visa for remote workers (Form PM18) needs foreign-source income of at least B/.36,000 a year, an employer letter showing B/.3,000 a month, medical insurance valid in Panama and a sworn statement not to take local work. It lasts nine months and can be extended once. It is a non-resident permit.

What is the Pensionado visa in Panama?

The jubilado pensionado is a residence category for retirees with a lifetime pension of at least B/.1,000 a month, or B/.750 if they own Panamanian property above B/.100,000. Each dependent requires B/.250 more per month. Foreign pensions are foreign-source income under the territorial rule, so Panama does not tax them.

How much do I need to invest for Panama residence?

The Migration Service requires at least B/.300,000 in real estate, a fixed deposit held three years, or a mix of both, with proof the funds came from abroad. Each dependent adds B/.2,000. You get a two-year permit first, then can apply for permanent residence. Fees at application are B/.250 and B/.800.

Can I get a tax residence certificate in Panama?

We found no official page describing the certificate procedure, so ask the DGI before you plan around it. Tax residence rests on facts: PwC gives a test of more than 183 days of presence while generating income. A short-stay remote worker visa is a non-resident permit, so do not assume it supports a certificate.

Do US citizens benefit from Panama's territorial system?

Only partly. Panama will not tax foreign income, but the US taxes its citizens on worldwide income wherever they live. They still file US returns every year. So Panama lowers the local layer of tax, not the home-country layer. Check your own country's rules on foreign income before you move.

Related guides

• Tax residency in Panama
• Practical guide to obtaining your tax residency in Panama
• Capital gains tax in Panama
• Panama tax landscape overview
• Personal tax deductions and benefits in Panama
• Expat and digital nomad incentives in Paraguay
• Expat and digital nomad incentives in Brazil
• All country tax guides

Sources

• Visa de corta estancia para trabajador remoto (PM18) – Servicio Nacional de Migración
• Jubilado pensionado (PE2) – Servicio Nacional de Migración
• Solvencia económica de bienes inmuebles (RP5) – Servicio Nacional de Migración
• Tarifa del impuesto sobre la renta – Dirección General de Ingresos (DGI)
• Generalidades de la declaración del ISR – DGI
• Plazos de presentación (filing deadlines) – DGI
• Permisos migratorios (permit list) – Servicio Nacional de Migración
• Panama individual – residence (secondary) – PwC Worldwide Tax Summaries

This guide is general information, not personalised tax advice. See how we research and review.