Pensionado or Favored Nations?

At 65 I have been looking into various Latin American countries with a view to retiring. Cost Living, Climate and at least a smattering of other expats around seem to be my main criteria.  I need something "half way up the mountain" - like Boquete or maybe a few degrees warmer. We spent a month in Boquete in January and found it to be very nice, but long-term rentals are difficult to find and somewhat pricey. Loja Ecuador seems OK but so far way from family.

That is by way of introduction.  I am familiar with the ins and outs of the Pensionado Visa but have recently been looking at the "Favored Nations" Visa.  It seems to me when comparing the two that with the Fav. Nat. Visa you can simply pay $5K into a Panama bank account (which I understand can be difficult to set up?), set up a corporation (an additional $1.5K or so?) and then receive your visa, which allows you to carry on some kind of business to earn a little money.  (As a lawyer I will not be able to enter as a "professional." ) However you do not get the Pensionado discounts.

With the Pensionado Visa you get the discounts but are not permitted to work (except some self employment?)

As well, am I right in thinking the Fav. Nat. Visa is processed more quickly? That actually be an insignificant factor though. 

And comments most welcome! :)

Sunset Steve,
I am also checking other Latin American and Caribbean Countries, even Portugal and Spain, to relocate with my family (me, wife and probably my brother) and I am still undecided.  Due to the high tension with Greece going broken, Russia and Nato/USA preparing to war, I have decided, Europe is out for me, at least for the time being....

Other countries though, are still under scrutiny and, one of them, is Panama. There are pros and cons regarding the two visa and of course the major snag with the "Pensionado Visa" is that you cannot work, but if you have a company or trust formed, you probably could do your self employed work, "homework" or otherwise (have to check it out), and on the other hand, do not forget that under the "Friendly Nations" visa, you will also have to deposit an additional $2,000 per family dependent, as well as to prove economic and financial solvency. In addition, there are other types of visa to Panama, which I suggest you look into each one´s perks.

Applying for Panama Immigration Permanent Residency:
If hired as a professional by a Panama company, the decree orders the Ministry of Labor to fast track the issuance of a work permit. In addition, the foreign professional must register with Panama’s Social Security Administration. The employer will need to provide an employment contract or a letter explaining the professional capacity the foreigner is hired for. Certain professions are restricted only for Panama citizens like architects, attorneys, engineers, and medical & veterinary doctors.

Economic Solvency is another requirement which only requires depositing $5,000 USD (and $2,000 USD for every dependent) in a Panama bank account. Panama immigration has the discretion to determine whether the foreigner is sufficiently solvent to live in Panama and to care for the family. The wages to be paid will help determine this requirement.

In addition to the usual required documents for application to Panama immigration to become a permanent resident, here are the documents required for the Friendly Nations Visa:
2. A written letter stating the types of professional or economic activities you will conduct in Panama. Here are the 2 activities Panama immigration is looking for:
(a) Professional: Working for a Panama company in a professional capacity. While the decrees and Panama immigration have not come up with a list of
acceptable professions, note that some are reserved only for Panama citizens like engineers, architects, attorneys, and veterinarian & medical doctors. You will need to provide a copy of the employment contract, proof that the Panama Company is registered with Panama Social Security Administration, and you have obtained a social security card.
(b) Economic: Provide documents that you are either a Board of Directors member or a major shareholder in a Panama Corporation or you own a Panama company. If the Panama Company or Panama Corporation is new, submit proof that its corporate franchise tax has been paid along with a copy of its business (commercial) license. If the company is over one year old, submit a copy of its tax return along with its business license. If the corporation is over one year old, submit a copy of its tax return or certificate of good standing. In addition, submit copies of Panama bank accounts in the company or corporation’s name along with proof of any income producing real estate owned by the company or corporation and any other income producing activities in Panama.
3. Proving Solvency: You must submit proof that you are economically solvent by:
(a) Proving that you deposited at least $5,000 USD into a Panama bank account plus $2,000 USD for every dependent.
(b) Proving income like a letter from your employer on company letterhead describing your salary. Include a copy of your Panama social security ID card.
Note: Proving sufficient income to support yourself and your family is discretionary by the Panama immigration officials.
5. Dependents: You must submit a Letter of Responsibility for your dependents.
(a) Submit proof that your dependents are relatives with a copy of their birth certificates or for your spouse a copy of your marriage certificate. These copies must be authenticated by a Panama consulate or Apostilled.
(b) Dependents (not your spouse) can apply up until 25 years of age if they are enrolled as full time students.
(c) Dependents over 18 years of age must provide a notarized affidavit that they are single. These copies must be authenticated by a Panama consulate or

thanks for you input tos223 - I also looked at Spain, but if not coming from an EU country the immigration requirements are onerous and costly - in the sense of requiring a major financial investment. As for Panama, I believe I would qualify for either a pensionado or a favored nation visa. Which to go for? I am not eager to get involved in a start-up at this point in my life, but always nice to have the option in the event an opportunity presents itself - or becomes necessary! Hate to pas up those discounts though, especially for travel.

@Sunset Steve
the north-west of portugal and sapin (galicia) are really gorgeous areas
great food, very friendly people and still affordable living
panama is nice but you need lots of money to enjoy all the bells and whistles. for the same amount of money you can live elsewhere much better. many other countries have understandable laws, clear rules and regulations
many friends of mine have left panama again because of the high cost of living. for business owners the reasons for leaving panama are corruption, safety, sluggish economy and unclear laws. statistically 50% of expats go back or chose other destinations.

Hey Steve,

I wanted to clear one thing up about the Pensionado Visa vs. the Friendly Nations Visa. If you do elect to go with the Friendly Nations Visa, you will still get most of the discounts that you would receive from the Pensionado Visa. That is because the discounts are not specific to the Pensionado program, but are actually Jubilado discounts that all Panamanian citizens and permanent residents receive when they reach a certain age (55 for women, 60 for men). So once you receive your friendly nations visa, you will qualify for all of them.

The only discounts from Pensionado that you won't receive if you go the friendly nations route are the import perks. This includes being able to import a car duty free every 2 years and a one time exemption to import household goods. The pensionado also grants the Jubilado discount regardless of age, so if someone was retiring here with a pension at 40, they would still get the discounts. But since you qualify for the jubilado age, that doesn't apply to you.

If you narrow down your choice to Panama and decide to move, it's highly recommended you use an immigration lawyer for either type of visa. They should be able to help you with any additional questions and clarifications you may have.

You can also check out an article I wrote that has more information on the different types of visas.

Hope this helps,

purplebox :

@Sunset Steve
the north-west of portugal and sapin (galicia) are really gorgeous areas

I hear you PB but as much as my wife in particular would prefer to live in Spain, it is quite a challenge to emigrate there if not an EU member. The investment and financial requirements seem to be significant from what I could tell. We have motorcycled through Andalusia and quite loved it.

PanamaforForeigners: thank you for the elucidation! Saved me lots of head-scratching. :)

you can also do visa runs in your case morocco a non EU country would be near the south of spain. you can take a ferryboat.
what I forgot to mention is if you belong to the euro or efta zone you can work in all these countries or get social benefits. EU countries have high sales taxes but traveling in and around europe is dirt cheap -

I read this:

"Contrary to what you may have heard, a weekend trip abroad doesn’t automatically renew your tourist visa when you re-enter Spain. It would be great if it did, but this is false. Spain is a member of the Schengen Agreement, which means that tourists (from the USA, Australia, Canada, New Zealand and a number of other countries) are only authorized to stay in the entire Schengen territory (covering most of the EU countries) for up to 90 days in any six month period. To stay in Spain longer than 90 days, you’ll need to get a visa (work visa, student visa, etc.) and no weekend “visa run” is going to change that; otherwise you’ll be staying in Spain illegally. To be honest, some people do stay in Spain illegally (some run into problems, some don’t), but we can’t recommend this."

Sort of dashing my Spanish thoughts. :(

I am the original author of the Friendly Nations Visa requirements posted here.  I was the manager of a Panama law firm's marketing department for over 3 years and went out on my own providing marketing, promotional and SEO services for companies around the world including the same law firm.  Apparently, the law firm did not revise my words to change "47" Friendly Nations into 50 and include the 3 new nations on their list.

Everything posted regarding Panama's Pensionado and Friendly Nations Visas here are correct.

One thing I would like to point out about the differences between the 2 visas is that the Pensionado Visa will give you permanent residency, but not Panama citizenship.

The Friendly Nations Visa will allow you to obtain permanent residency faster than the Pensionado Visa and will lead to Panama Citizenship and a Passport after 5 years of permanent residency if you choose to apply for citizenship.  I know of many Americans who have given up on their government and are looking forward to becoming Panama citizens so they can just use the Panama Passport.

Steven Rich, MBA

Thank you Steven. I need to find your post on the FN Visa - I haven't seen it. I want to understand why/how it is quicker than the Pensionado.


You are a few years ahead of me ( although at times not sure on that ) ....and am looking for the exact same scenario I will be. I want to find a place more lush than baking on the beach ...and Boquet was a place I was zeroing in on....for all the obvious reasons...sorry to hear that housing is getting harder to find. I'd hate to see a beautiful place like that be ruined with cheapo apt. housing also however....I'd be curious how your search goes...maybe we'll meet up down there. My situation is alittle diff. in that I raised a family, kids all growed up and am single now...but do want to escape a lot of whats going on in the US, or what is going to be going on it seems....and the economic struggle of trying to survive happily on a fixed income in the US.

I'll try to keep you in the loop, Knute.

I am in constant contact with Panama lawyers and hear what goes on in the trenches regarding processing immigration visas by the Panama government.

The Friendly Nations Visa is processed faster than any other visa because when it was created by President Martinelli, he specifically ordered the Immigration Department to fast track their applications and for the Ministry of Labor to also fast track processing applications for Work Permits once the Friendly Nations Visa is approved by the Immigration Department.  President Varela has not interfered with that order.

The application for the Pensionado Visa requires the Immigration Department to verify all of the documents submitted which requires making sure the pension is for real and that the minimum $1,000 USD per month are being paid for at least 3 months.  There are more required documents to verify for the Pensionado Visa than there are for the Friendly Nations Visa.  This is why it takes longer to process an application for a Pensionado Visa.

Steven Rich

Thanks Steve - makes sense. Another way of putting it : money talks; bulls hit walks! (I'll leave the autocorrect alone LOL)

Steven Rich MBA :

making sure the pension is for real and that the minimum $1,000 USD per month are being paid for at least 3 months.
Steven Rich

Are you sure about this and if yes, is that official or inofficial? I was under the impression that the pensionado visa requires a lifetime pension.

You are correct.  The Pensionado Visa requires a lifetime pension of at least $1,000 per month.  But, I was specifically referring to the process in which Panama immigration officials take when looking at an application for the visa.  Officials will look at a minimum of 3 month's payments in order to determine that the pension is for real and not a fake application.

Steven Rich

Steven - I am interested in getting a feel for the realities of the FN Visa - that is to say, how one might anticipate that discretion might be exercised. I am also interested in getting some clarity on the required $5K investment.

As I understand it:

- I retain a lawyer to incorporate a corporation; then I deposit $5K into a bank account - am I right in assuming that the lawyer assists me in opening a bank account in Panama and the deposit is made to the corporate account?

- Is it likely that further evidence will be required to demonstrate financial stability?

- Is it necessary to include a business proposal in the application, one with a degree of economic feasibility?

- Is it necessary to also submit the police report from a national police service as part of the application?

Or is it the case that with incorporation and $5K deposit one might reasonable expect that the Visa will follow?


Dear Sunset Steve,

Here are the entire requirements to qualify for the Friendly Nations Visa provided to me by an English speaking Panama law firm whom I often refer clients to:

Requirements of Friendly Nation Visa

The words “professional and economic ties with the Republic of Panama” means that citizens of these 50 countries must establish professional or economic relationship with Panama.  This can be accomplished by starting a new business or purchasing an existing business or being hired to work for a Panama company.

An “Economic Activity” means the applicant owns either a Panama corporation or a Panama company (new or bought an existing business) which is doing business in Panama.  Foreigners are prohibited from owning a Panama retail business.

Another option is to prove “Professional Activity”. Meaning the applicant is employed by a professional Panama company, has a Panama work permit, and is registered with Panama’s Social Security system.  In addition, proof of income like the employment wages needs to be provided by the employer.  Documents proving these activities must be submitted.  Foreigners are prohibited from practicing certain professions such as: medical & veterinary doctors, attorneys, architects, and engineers.

Proof of Economic Solvency is another requirement.  This can be met by having at least $5,000 USD (plus $2,000 for each dependant) deposited in a Panama bank account.  Whether an applicant is solvent enough is not clearly defined leaving the matter up to the discretion of the immigration officials.

Dependants include the spouse and children up to the age of 25 if they are full time university students.  The applicant must provide a written letter of responsibility regarding the dependants.  Every son or daughter dependant over the age of 18 must provide an authenticated being single certificate from their respective country.

After the application is filed along with all required documents the immigration office will issue a one year temporary residency card (carnet) which will be replaced by a permanent residency card once the application is approved.

Once the application has been approved, the foreigner can apply for a Work Permit. Panama’s president recently issued a Presidential Decree ordering Panama’s Ministry of Labor to fast track acceptance of work permits for the 50 friendly nations citizens.

Current Panama Immigration Required Documents

Law 3 of 2008 under Article 28 requires the following documents from an applicant:

1. Application for Permanent Panama Residency with a Special Power of Attorney
authorizing a Panamanian attorney to act on behalf of the applicant who is duly
authenticated by a local notary with the proper government stamps.

2.  Copy of the entire passport notarized by a Panama Notary.

3.  Criminal history background check from the applicant’s country of origin or the country where he has lived consistently for the two past years.  The Panama immigration department requires the applicant to provide an authenticated criminal history report issued by a “federal”, “central”, or “national” police force or criminal investigation authority. The criminal history records that do not have an expiration date will be valid for 3 months from the date of issue for immigration purposes.

(a) If the applicant is providing a criminal background report from a country where he is not a citizen, but a resident, the applicant must provide the legal residency identification which must be authenticated or Apostilled.

(b) If the applicant has been residing in Panama for the past two consecutive
years (without leaving the country) the criminal background check must be prepared by the national police (DIJ).

4.  Panama immigration will require the national criminal history report to be authenticated by a Panamanian Consul from the country that issued the document or by Apostille which is an internationally recognized government agency authentification of its issued documents by attaching certain seals to the document.  Here is a list of Panama Consulates Worldwide.

5.  Original medical examination report from a Panama medical doctor.

6. Two Certified Checks:

(a) $250 USD in favor of the National Treasury for immigration fee; and

(b) $800 USD in favor of Immigration for repatriation purposes (deportation).

IMPORTANT: Once immigration has issued a resolution whether it’s an approval or denial of the application of residency the checks are non-refundable.

7.  Personal Sworn Affidavit explaining the purpose for seeking Panama Permanent Residency and ability to support family and dependents. (This form will be supplied by Panama Offshore Legal Service’s immigration attorney.)

In Addition, the recent Presidential Decrees require the following documents:

1.  3 Passport Size Photos;

2.  A written Statement describing the economic or professional activities to be conducted by the applicant in Panama.  These can be explained in the following manner:

(a)  Economic Activity: Produce documentation that the applicant is a    member of the Board of Directors or majority shareholder of a Panama  Corporation
or is the owner of a Panama company.  If the Panama  Corporation or Panama Company is new provide proof of its franchise tax being paid and its commercial license.  If the corporation or company is over one year old provide proof of its tax return, paz y salvo, or in good standing  certificate.  Further proof of bank accounts in the corporation or company’s name along with any real property generating income it owns, and any activity generating income.

Note: The economic activity cannot be one reserved for Panamanian nationals such as a retail business.

(b) Professional Activity: A professional activity is a job with a local company.  The applicant must provide proof of an employment contract, that the company is registered with Panama Social Security and the applicant has a social security card and work permit.  There are several ways to obtain a Panama work permit including the allowable 10% foreign employees or the Marrakech Treaty.  The professional activity cannot be one reserved only for Panama nationals such as an attorney, architect, engineer, medical or veterinarian doctor.

3. Proof of Solvency: In addition to the documents that demonstrate the applicant’s economic or professional activity the applicant must also provide the following:

(a) Proof from a Panama bank that the applicant has at least $5,000 USD           deposited plus $2,000 USD for each dependant.

(b) Proof of income such as employment salary with a letter from the employer
which includes applicant’s social security number and work permit.

Note: Part (b) is vague which can be interpreted by Panama immigration at its discretion to verify the applicant’s solvency.

4. Copy of Applicant’s I.D.: From applicant’s country of origin such as driver’s license or government issued photo I.D.  This is in addition to the passport to prove residency and citizenship.  This document must be Apostilled or authenticated by a Panamanian consulate.

5.  Dependants require a letter of responsibility from the primary applicant.

(a) Proof that the dependants are related either with a birth certificate or if it’s a spouse, a marriage certificate.

(b) Dependants other than a spouse can apply up until the age of 25 if enrolled as full time university students or are disabled

(c) Dependants over the age of 18 must submit an affidavit that they are single which must be Apostilled or authenticated by a Panamanian consulate.

Steven Rich, MBA

Now THATs what I call an ANSWER! :)

SunsetSteve :

Now THATs what I call an ANSWER! :)

Very informative indeed Steve.  The "Economic Activity" requirements sounds real - not just setting up a Panamanian corporation but actually engaging in business activity, as demonstrated by paid taxes and other verification.  The Pensionado visa or the 180 day tourist visa (aka "Hop-In-Hop-Out" approach) looking easier?  Are you really willing to retire to Panama only to have to deal with the hassles of a business in Panama?

Mt thoughts exactly Sawman. Based on Steve's post it seems there are too many hoops and phony business plans to bother with the FN Visa if all you really want to do is "go fishin'".  Too bad. I was kind of liking the FN possibilities. I had been under the presumably mistaken impression that the $5K and a corp. was going to do the trick.


The Friendly Nations Visa was intended to attract a smarter, better educated & trained workforce to improve the country's economy.  It was never intended to be a "retiree" or "pensioner's" free ticket to just hang out in Panama and become a citizen.  There is already the Pensionado Visa for that purpose.

Steven Rich

Thanks for making that clear Steve

I know this thread has been inactive for about a year but i'm sure people like myself still stumble across it.
I have seen several websites offering to fulfill the FN visa requirements through an investment in Teak.
As a cheaper investment than forking out $80,000 or $60,000 and going down the full reforestation visa option, these websites are asking for aprox $20,000 and saying this will guarantee a FN visa, with the bonus of a return in aprox 15 years.

Does anyone have any thoughts on this, pitfalls, advantages etc?


you don't need to do any such kind of investment


The Friendly Nations Visa and the Reforestation Investment Visa are 2 different types of Visas.

The Reforestation Visa requires a minimum investment of $80,000 USD in a government certified reforestation program which includes purchasing at least 5 hectares of land.

The Friendly Nations (FN) VIsa allows citizens of 50 countries to get fast track permanent residency leading to full citizenship after 5 years.  The foreigner must either start a new business, buy an existing business, or make a $10,000 purchase of land and deposit $5,000 in a Panama bank plus a little more for each dependent.

What you wrote about is mixing up the 2 different visas either due to a misunderstanding or the promoter of the visa is really stupid. 

I have published several online articles about both Visas, as well as, writing a Panama law firm's web pages on these Visas.

Steven Rich, MBA

It would seem that a $20000 investment would buy a plot of land exceeding the requirements of the Friendly Nations Visa if the article below is to be believed.

I have found at least 3 companies offering similar deals, ECI Developments, Panama Teak Forestry and Latam Prime Investments.

''The Panama Friendly Nations Visa program was passed into law in 2012. The government of Panama is offering a very attractive residency option to those who are citizens of countries the Panamanian government has strong “professional and economic ties with”. There are 48 countries total, and the United States, Canada and much of Europe are among them.

The visa itself requires very little effort on the part of the one trying to obtain it. A few choice documents are required, such as three passport sized photos, a copy of your ID, a list of your dependents, and proof of solvency. The final and most important requirement is proof of an investment made into Panama.

The base investment to qualify for the visa is surprisingly low. All it takes is a mere $5,000 deposited into a Panamanian bank account, and proof of having some sort of economic activity in Panama. The types of things that could qualify one for doing economic activity in Panama might be starting and operating a business there, getting a job there, or, the simplest option of them all, owning real estate.

There is no “official” dollar amount for the size of the economic activity, but it seems that the Panamanian government is looking for an initial investment of at least $10,000. For those who plan on owning and operating a business in Panama, this shouldn’t be a problem. But for those who are looking to purchase real estate, this number can be important. You want to spend the least amount possible when buying real estate in Panama, if the residency is your only goal. To be clear, this real estate can’t be idle; it has to be tied to some sort of economic activity. And this is where the teak comes in.
An Investment in Teak
Teak is quite possibly the best investment option to become involved in to qualify for permeant residency through the Friendly Nations Visa. Teak is an incredibly sturdy tree. At the age of 3 years old, the wood grows resistant to fire, termites, fungus and rot. This makes the tree an extremely safe investment, as once it hits 3 years of age, there is little risk to be had.
The market for teak is strong, meaning that it will be easy to find a buyer once the wood is harvested. Teak prices have increased at an average yearly rate of 5.5% over the past 3 decades, and that rate has been averaging around 7% the last several years. Teak is currently being cut down at 8-12 times the rate of replanting, meaning that the price for teak is only expected to go higher.

One of the few downsides to investing in teak is that the harvest period is rather long. From planting to harvesting with teak takes 25 years. This means that an investment in teak is one for the long term. The good news about this though, is that there are teak plots available for purchase right now in Panama which are already 17 years old. This puts the trees well past the 3-year age for developing their resistances, making the investment all that much more secure. And, this is an excellent opportunity to get a hold of some teak that is more than two-thirds on its way to harvest, making your return on investment pay off all that much sooner. It is not often that teak can be purchased so close to the harvesting period.

Currently, a 1,000 square meter (approximately one quarter acre) plot of this teak can be purchased for $20,000. This includes the $4,300 fee for all legal work associated with the application for one main applicant for the permanent residency visa, and for a Panama corporation. If teak prices stay fixed where they are today (an unlikely scenario, as they have been increasing for the past several decades) this 1,000m2 plot of teak will be worth $24,338 at harvest. If teak prices continue to increase as they historically have at the rate of 5.5% annually, a 1,000m2 plot of teak will be worth $39,410 at harvest. Again, the value may be even higher than this, as teak prices have been increasing above their 5.5% average rate the past several years, and this is likely to continue in the future, as teak continues to be harvested well above the rate of replanting. Whatever the actual selling price may be, an investment in Panamanian teak will get you permanent residency in a foreign country, for significantly less than almost any other permanent residency program in the world, and will net you some profits as well. Seems like a win-win situation.''

In your opinion, is this a scam, or false information then?




There is nothing wrong in what they state about teak investing and the time it takes to harvest, etc.

Bear in mind, they are reforestation program companies promoting their product which is reforestation in Panama.

You don't need to invest in reforestation in order to qualify for the FN Visa.

They are just pushing their product.

Steven Rich, MBA

Thanks Steven, I appreciate that they are probably pushing their product, most businesses who want to stay in business do. And the reforestation of Panama can't be a bad thing either. I won't be rushing into anything but this does seem like a viable option at the moment. Regards, Gary


A few years ago, I wrote an article published in The Visitor about the Reforestation Visa and teak.  It looked like a viable, profitable investment at the time due to the global popularity of teak and its many uses.

Steven Rich, MBA

Hi Steve, thanks for all info...for FN visa has the rule changed purchasing land worth $10,000 to now $50,000?


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