Gray & Co. Immigration Pensionado Visa vs Friend

Pensionado Visa vs Friend


Pensionado Visa, pensioner visa, retired, retire to Panama, friendly nations visa, Friendly Nations, business in Panama, visa requirements, permanent residency, cedula, cédula, driver's license

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If you are a retiree, you may be wondering why is everyone suggesting that you get the Friendly Nations visa in Panama.  Wouldn’t a pensionado visa be easier?  It might be, but many clients discover that the friendly nations visa is easier to qualify for than providing the paperwork for pensionado.  Also –  not everyone qualifies for the friendly nations visa (because they are from a country that is not listed).

The primary reason you might go for a friendly nations visa rather than the pensioner visa is the requirements to qualify for permanent residency as a retiree.

pensionado, requirements, pension, government pension, social security, apostille, annuity, self-directed, monthly payments, custodianPensionado Visa Requirements:

  • Pension for life or an annuity
    • Not just an income stream from your investment account
    • Not rents received from a property
    • Self-directed pension plan is probably not acceptable. Someone else must manage the investments & show that it is FOR LIFE.
  • Proof of pension – Apostilled pension letters
    • Authenticated in the country where the pension is being granted.  Are you still in that country? Can you easily get those papers apostilled?
  • For a private pension – proof of existence is harder
    • Pension letter (proof of pension apostilled)
    • Certificate of Good Standing for the company that you retired from (Where was it incorporated? How will you get that ordered & apostilled?)
    • Proof of who is the custodian of the pension funds
    • Indication of who is the investment manager/advisor of those funds
    • Apostilled certificates of good standing (proof of existence) for the custodian & manager of the pension
  • Does not depend on market conditions
    • Your monthly income received from the pension must not depend on market conditions – it must be a set monthly amount that you will receive for life, not what you are currently receiving in the current market conditions
  • If young – it might be a disability pension.  But otherwise, you are probably disqualified from having a pensioner visa.

Benefits of the Pensionado Visa

Before you give up on the retiree visa, note that it does provide some benefits that the Friendly Nations visa does not provide:

  • the discounts – everyone has probably spoken about these (hotels, restaurants, air-fares, pharmaceuticals, etc.). A primary reason some apply for the pensionado visa rather than friendly nations visa.
  • the cost of the visa – if you have a government pension (say from Social Security) and you easily qualify for the pensionado visa without too much paperwork, this visa is typically less expensive than getting the Friendly Nations visa.
  • you’re not expected to file tax returns in Panama every year – the presumption is that your income from your pension is sourced from outside of Panama, and therefore you will not be presenting every year a Panamanian tax return. So, you have residency here, but your source of income is your pension.
    • This is not, however, a license to work in Panama and simply not pay taxes here. Just an expectation that you are retired and therefore will not be working.
    • You may still be required to file tax returns each year in your country of origin, because that’s where your source of income is from.  You should check this out yourself.
    • If you set up and run a business in Panama, that business will need to file tax returns, because while you are exempt, the business is not.

Comparisons with Friendly Nations

With the friendly nations visa, there are a few requirements that you have to meet that are not required for the pensionado visa:

  • Set up a personal bank account:
    • the personal bank account will require a minimum balance of USD$5,000.00 to qualify for the friendly nations visa
    • the pensionado visa does not require that you set up a personal bank account.  You might still want one, but it’s not required for your immigration application.
  • Set up a business corporation:
    • the applicant should be the president of the company
    • at least 30% of the company shares issued to the applicant
    • the company is NOT an offshore company – it is a local operating business company
      • subject to presenting an annual tax return to Panama’s tax department
      • you need a Panamanian accountant for this company, once it is up and operating
      • the company is registered with the local city council and pay the district council rates (local taxes on businesses)
      • if you have sales over $36,000 a year, you will be subject to ITBMS (sales tax) and need to present the monthly reports

On the other hand, one of the benefits with the friendly nations visa is that you might get a work permit – this allows you to work in your business.

Time frames

Once you have all of the paperwork together, the application process and time length is almost identical for both visa applications.  In the pensionado visa process, you might take longer getting your paperwork together in your country of origin, while in the friendly nations visa, there are more requirements to fulfill in Panama.

But having all of the paperwork together, Joan Villanueva will present the visa application to the immigration department and you should expect to have the answer back within 3-5 months.

Once approved, in both cases, you will have permanent residency and be able to apply for your cédula.  You will no longer require a multiple entry-exit permit to leave Panama, as you will now be a permanent resident.

For more information regarding the immigration process, please do not hesitate to contact Joan Villanueva.