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Many people have a dream of living at the beach, working from home on their computers. You may dream of the simple life of a digital nomad. They go by many names: nomad, long-term traveler, digital nomad or remote worker.
What are the visa requirements for working from Panama?
Obviously, I want to differentiate two types of nomads:
- one who simply comes to Panama as part of their travels, living here for less than six months,
- the person that sets up Panama as their home base.
For the remote worker passing through Panama, I’m not so concerned about your immigration status. Your income tax liabilities are not tied to Panama. As long as you are not employed by a Panamanian company, the immigration & labour departments consider you a tourist.
What is remote work?
For many people internationally, remote work allows them to carry on working, outside of a traditional office environment. The basic concept is many types of computer-based work are successfully executed from anywhere. These jobs include:
- translation services
- teaching English online
- software programming
- illustration & graphic design
- copywriting
- web development
- writers/transcribers
- social media management
- virtual assistants
- affiliate marketing
But, you might also find that you can work online as a lawyer, accountant or other professional skills.
The most secure income streams are as a corporate remote worker – whether sitting at home or traveling. Of course, this type of commitment may require «office hours» of some nature, including being available for regular phone calls and meetings.
Another option, of course, is to launch your own digital business. Many online entrepreneurs make their money trading online services. In this case, your online work generates income. In fact, most digital nomads actually work for themselves!
You could also work as a freelancer – offering your services to a number of different companies. In freelancing, you are on time-limited projects and obviously have no benefits.
Immigration requirements as a digital nomad in Panama
As I said in the introduction – if you are simply passing through, you might not want to go to the expense of applying for residency in Panama. Nonetheless, if this is your semi-permanent base or you are actually working remotely from your home in Panama, then you must consider two aspects of this:
- immigration status
- tax residency status
The two are tied hand-in-hand, especially if you are using your Panamanian residency as a reason to claim that you are exempt from income taxes in the country you are receiving payment from. While it’s true that 10+ years ago you could earn income in Panama, with your Panamanian residency, and claim that your income was «foreign source» and therefore not taxable in Panama – all of this has changed.
If you are resident of Panama, and you are working from home in Panama, then the tax department considers Panama to be the source of your income. That is where you are working from.
If you want the income to be exempt from Panamanian taxes, you would need to look into the effects of the double-taxation treaties that exist with the country from which you are being paid, and consider what is the most advantageous way of receiving the money.
Immigration status
Most foreigners living in Panama as digital nomads are looking to get immigration status as quickly and easily as possible. This typically means that they set up a corporation, getting a local business license, and apply for the friendly nations visa. This visa has the benefits of being quick and easily approved. You get permanent residency immediately, which means you can apply for a cédula.
Of course, if you don’t qualify for a friendly nations visa, the investment required in Panama will be considerably more. In that case, you would need to apply for an investor visa, as you will not qualify for a work permit in Panama unless the company is Panamanian.
Where to work from – there are a number of co-working spaces available throughout Panama City.
For more information regarding immigration and visa options in Panama, please contact us.
