Panama Pensionado Visa

The Pensionado permit grants permanent residence to foreign nationals who receive a pension for life from a foreign government, an international organisation or a private company. The pension must be at least US$1,000 a month, or US$750 a month for an applicant who owns Panamanian property valued above US$100,000. The permit is indefinite, so there is no temporary stage and no renewal.

Applications go through a Panamanian lawyer to the Servicio Nacional de Migración, and the process from first documents to permanent card runs about 4 to 10 months. Holders cannot take salaried work in Panama, and naturalisation becomes possible after five years of permanent residence.

How Panama taxes foreign pensions

Panama taxes on a territorial basis, so income earned from activity inside the country is taxable while income from sources outside it generally is not. A foreign pension therefore falls outside the Panamanian tax net, whereas Panama-source income such as rent from a local property is taxed locally. Permanent residence does not by itself make anyone a Panamanian taxpayer: the tax authority applies a presence test of more than 183 days in a fiscal year, and those days need not be consecutive.

Tax treaty with the United States

Panama has no income tax treaty with the United States. The two countries have a tax information exchange agreement, which lets their authorities share information on request but does not relieve double taxation or set reduced rates.

For US citizens and green card holders

US persons stay taxable on worldwide income whatever Panama does. The foreign earned income exclusion on Form 2555 is US$132,900 for 2026, but it covers only earned income such as wages and self-employment. Pensions, dividends and capital gains do not qualify, so a pension-funded retiree has little use for it. The foreign tax credit on Form 1116 is limited by foreign tax actually paid, which is why it matters mainly for Panamanian-source income.

FBAR (FinCEN Form 114) applies when foreign accounts together exceed US$10,000 at any point in the year, and the total is counted across all accounts rather than per account. Form 8938 has its own higher thresholds that depend on filing status and where you live.