Territorial income taxation (Panama)
Live in Panama and pay no Panamanian tax on income earned outside the country.
Record checked Oct 27, 2026 · official source confirmed 14 Nov, 06:01 UTC
Summary
Panama's income tax only reaches income produced within Panamanian territory (Código Fiscal art. 694), so residents' foreign-source income, such as a salary paid from abroad for work done abroad or foreign investments, falls outside its tax base.
Dream spread
Live in Panama and pay no Panamanian tax on income earned outside the country.
Relocation reality check
Not a special regime or a visa - it is the general tax rule. You still need a residence route to live in Panama, Panama-source income is taxed at normal progressive rates, and your home country (e.g. the US) may still tax you. Where remote work performed while physically in Panama counts as foreign-source is a question for a tax adviser.
Your fit signals
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Eligibility
Anyone with income; the territorial rule applies to all taxpayers, national or foreign.
The long game
If Panama becomes home, here is the road from first visa to a second passport.
Panama · residency → PR → citizenship
Verify rules- Y0ArriveYear zero
- Y2Permanent residency~2 years
- Y5Citizenship eligible~5 years
Costs & money
The amounts & terms on record from the official source. USD figures are estimates.
- Property purchase
- Not required
- Tax
- Código Fiscal art. 694 (restored by Ley 1 de 2014): only income produced, from any source, within Panamanian territory is taxable, wherever it is received. Rate bands are set elsewhere in the Code (not reverified here).
True cost to move
Upfront cash, reimbursements, and net position after approval — not headline incentive amounts.
- Flights & logistics$1,200
- Temporary housing (90 days)$2,400
- Deposit / first month rent$2,000
- Visa & consular fees$500
- Health insurance$600
Application roadmap
A practical sequence — adjust for your consulate and timeline.
1. Confirm official eligibility
Read the primary government source.
2. Gather income & employment proof
Bank statements, contracts, or tax records.
3. Book consulate / immigration appointment
Slots vary by country and season.
4. Prepare health coverage
Meet minimum coverage rules before arrival.
Meet people before you go
Existing communities already talking about life in 🇵🇦 Panama. Lurk, ask, make a friend — before the flight.
Facebook groups
Source trail
Official links, the line we checked, and when we last checked it.
“Ley 1 de 2014 (G.O. 27450-A), restoring Código Fiscal art. 694: "Es objeto de este impuesto la renta gravable que se produzca, de cualquier fuente, dentro del territorio de la República de Panamá sea cual fuere el lugar donde se perciba." [Taxable income is that produced, from any source, within Panama, wherever it is received.]”
Primary official sourceLast checked Oct 27, 2026- Secondary referenceLast checked Oct 27, 2026
Rule changes
CasaSedora last checked the official source on 14 Nov 2026. Changes appear here once two independent automated checks agree on them, or a person confirms them.
No rule changes recorded since monitoring began.
Our summaries point you to what moved — always confirm details on the official source.