As part of my continuing five flags plan, I would like to acquire a Panamanian passport, making Panama my Country B (the country in which I am a citizen).
Panama, one of the friendliest nations to foreigners (and particularly Americans) has one of the easiest and most liberal residency programs. You almost don’t even need residency, since most visitors can stay in Panama legally up to six months with no special visa.
However, if you want citizenship beyond just residency (meaning an actual Panamanian passport), you need to get residency first.
After discussing this in great detail with several attorneys and bankers on my most recent visit to Panama City (one of my most favorite cities in the world now; what a fantastic place!), here’s an overview of how it works.
First, you have to go through a local Panamanian attorney who will file all the necessary letters and paperwork for you (and there is a lot of paperwork required for these things). You also need to either rent an apartment on a long-term lease, or start a Panamanian corporation, or purchase real estate in Panama. Good attorneys can help you with any of those three options.
The government of Panama will do various credit and criminal background checks. Assuming you’re not a bad guy, you are given residency (not citizenship) within six months, often within just two or three. The entire process costs several thousand dollars.
Residency means you are not a citizen, but you can legally stay in Panama for as long as you want with no time limit. It also means you use a special express line at the airport whenever entering the country.
After getting your residency, if you want citizenship, you need to wait five years. During this five year period, you need to,
- Visit Panama at least semi-regularly; the recommended minimum is one week every 20 months.
- Learn Spanish.
- Study up on Panama’s history and politics.
- Develop some ties in Panama (work, or charitable work, or social circles, and so on).
I plan on doing all of these things. I love Panama and I’ve always wanted to learn Spanish for other reasons, so I’m happy to do it.
After the five years are up, you can apply for citizenship. You have to take several tests, prove you know Panama well, prove you can speak Spanish, and prove you have ties there.
After that, it takes 2-5 years to get your citizenship approved. If approved (and it looks like you probably will be if you do all of the above and you aren’t a criminal), you are then a Panamanian citizen with a Panamanian passport.
If you do the math, the entire process takes a grand total of 7-10 years. As I’ve said many times, five flags is a long-term, slow-burn plan. (Unless you’re willing to spend $150,000+ by buying your passport from a Caribbean country.) If it takes me the outside max of 10 years to get Panamanian citizenship, I’ll only be 56 years old by then; perfectly fine with me. That’s why I’m starting all of these processes now.
As always, I play the long game.
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dont you have to give up current citizenship to gain panama citizenship ,or maybe they dont enforce it
How are the women in Panama?Are they hotter than mexican women?
Will you make a blog post “A dragon in Panama”?
Do you know other countries where you can get residency this easily?(Countries outside the collapsing west)
Sounds awesome. How about temporarily living full time (at least 6 months per year) there under residency permit until one gets the citizenship approved? (Which means making Panama a temporary country A). If it’s one of your favorite city then it probably aint too bad to live in. Is there any downside? (Tax, women, utilities…)
They don’t give a shit.
Yes, Thursday at the other blog I’ll answer all of those questions.
Sure. Argentina, Paraguay, many others, though every country is very different in their requirements, logistics, waiting times, etc.
That would be fine as long as you stopped doing that once you got your passport and started spending your 6 months somewhere else. You don’t want your country A and B to be the same country if you’re following five flags; that defeats the purpose.
About your idea to have New Zealand as country A… I recently read the government there started to implement some crazy stuff like every time you get in / out of country the border guards now have the permission to go through your computer and phone and even request passwords. Does this affect your decision?
Very interesting; taking notes for my own future (though I like Argentina more, as it highly reminds me of my own country in many ways, has interesting women and I want to explore it more at later date)
On a semi-related point, wanted to ask how I can get in contact about full payment for the rest of your Business Course. I’ve written both to mail you mentioned in Q&A and Facebook, yet got no answer after a few days.
Thanks for the article.
Dubai is now offering 10 year-long visas for company owners, and 100% company ownership (no need for a local partner). Real estate is incredibly cheap in Dubai compared to other world’s big cities.
When you visited it, how were the demographics? Did you see many caucasians? It says less than 10% of people in Dubai are “western”.
No. 2% Rule.
I’m there right now. 🙂
Sorry about that. Email me here using the contact form and put “Business Course” in the subject line. I don’t check the Facebook group very often so you need to email me.
http://blackdragonblog.com/2017/11/23/a-dragon-in-dubai/
Unlike citizenship, residency (or long-term visas) tends to be pretty easy in most places. Why wouldn’t any country welcome the proprietor of an Alpha 2.0 business who gets money from international customers and spends it in their country (not to mention taxes)?
Regarding collapsing West, getting a passport from a place like Italy, which is what Caleb is doing because that’s an option for him, doesn’t sound like a bad idea at all. Even if a major crisis hits Italy, that’s very unlikely to have any effect on what an Italian passport enables for its holder. Is New Zealand going to revoke visa-free access to Italians in that case?
Also one thing Caleb doesn’t really address but it’s important: where you live and where you have tax residency don’t necessarily have to be the same country. Especially easy in the Schengen zone but possible elsewhere as well.
Hi Caleb,
At which level of yearly income do you think that this 5-flags strategy becomes interesting?
Thanks,
I solve this problem by not staying anywhere longer than six months; then your tax residency becomes irrelevant (minus the USA of course). But yes, there are other ways to do this.
At least $150,000 per year, though some could argue the real number is $250,000+ per year. However, there may be other other reasons you may want five flags beyond tax savings. That’s just my big reason.
I will write up an article answering that question in more detail. There seems to be a lot of confusion about this at both of my blogs.
I get the impression that if you see your self with 150-250k/yr location independent income, that you should get started on this 5 flags thing, with the 7 year timelines.
Do you have to fill out any special forms with the IRS with your foreign panama corporation? I would understand that it would be a foreign controlled corporation, but I can also see it just acting like a holding company with little activity or assets that it would be under some IRS limit.
Thats about it happening to you, but what do you think will the government and continued social developments be in a country who starts to do insane stuff like this and get away with it? Of course, could happen anywhere, but how easy is it for you to change your Country A if stuff does get bad?
You can do it shorter than 7 years in other countries. I’m just talking about Panama here.
You certainly must declare it on your taxes to the IRS, but I have no idea which forms that entails. I leave all that to my accountants / attorneys.
That’s happening in 100% of all Western countries since the entire West is going down this road. There is no avoiding this unless you choose to live 100% of your time in non-Western countries. For me, I don’t mind putting up with it as long as I have five flags in place. If my Country A gets bad, I’ll just move.
Uh, very easy, that’s the entire point of doing all of this. Dumb question.
Hiring a good attorney is the best course of action if you are going to live in Panama. even with a good knowledge of things to do, it is still the best option. However I loved reading this, you are very good at addressing what to expect and how to handle tax situations. Thanks so much