Panama is working hard to promote itself as an all-purpose destination, inviting tourists, investors and retirees alike to "Take the Path Less Traveled" - so much so that the path is becoming well-trodden indeed. The number of people visiting, exploring and moving to Panama is growing in leaps and bounds each year, and Panama has established itself competitively as the place to be.

Because there are very few restrictions on foreigners owning property in Panama, many are choosing to buy into the country’s booming economy and tropical lifestyle, and this can mean spending more time than the usual 30 days granted to tourists.

For those who want more than just a quick look around (or for those who have had that look and love what they see) there are a number of different immigrant and residency visas options available to foreigners.

So whether you are looking to invest in Panama, enjoy time away in your beachfront vacation home, or spend your retirement in this tiny, tropical haven, you need to consider which is best suited to your means, and your plans.

Changes to the law

In May 2008 a new immigration law was passed, bringing in changes to existing visa and residency categories, many of which are not yet fully clear. A final draft of the new rules is expected to pass at the end of August, with tougher requirements, and the elimination of some categories altogether. Those who have already obtained residency are not affected by the new law, and until the new regulations are finalized, the current rules still apply. While the final wording may still change, here are the main categories under which a foreigner might gain residency in Panama after August:

For Retirees

The pensionado, or ‘pensioned tourist’ visa, is one of Panama’s best-known and most oft-touted. Panama has gained a reputation as a top retirement destination in the last decade, securing International Living’s #1 spot six years running, thanks to a strong incentives package aimed at retirees, and a number of attractive traits – year-round pleasant weather, political stability, the use of the US dollar, great healthcare and the modern amenities of Panama City.

Add to that a cost of living that is markedly lower than in North America or Europe, and it is no surprise many are choosing to stretch their retirement savings into a better quality of life in Panama.

Formerly, pensioners needed to show an income of just $500 USD per month and an additional $100 USD per dependent in order to qualify. The new law proposes to increase the minimum amount to $1000. The income has to be verified by a foreign government, international organization or private company.

The rentista retirado, or Independent Retiree visa is principally for those retirees who were self-employed, owned their own business or have received a retirement lump sum, rather than monthly pension payments. In order to qualify for a five-year residency, you must make a five-year term deposit at the National Bank of Panama that will generate at least $750 USD a month in income.

There is no minimum age for a retiree, as long as you can show evidence of your retirement. For those who want to enjoy the good life early, applying for a pensionado visa can be the ideal option. Under the new proposed rules, pensionados obtain permanent residency, with the option to apply for citizenship after five years.The pensioned tourist is also entitled to a number of benefits, including the duty-free import of up to $10,000 USD worth of household goods, and a duty-free car every two years.

There are also a multitude of discounts for pensioned tourists, which also apply to all senior citizens, from entertainment to medical services, utilities, property taxes, bank loan interest rates and more. A sampling of the discounts includes:

• 25% off airfare with private or public, national or foreign companies
• 15% off hospital and private clinic services
• 50% off all entertainment
• 25% off restaurant prices
• 20% off general and specialist medical consultations and surgeries
• 15% off dental and eye exams
• 20% discount for technical and professional services (lawyers, architects, nurses, physical therapists, etc.)
• Freezing of property tax on sole personal residence
• 15% off maximum interest rate on personal and commercial loans

For Property Owners and Persons of Independent Means

For those who have sufficient money to support themselves or own residential property in Panama, permanent residency can be obtained under the Economic Solvency (solvencia económica propia) category. To qualify under the new rules, you must invest a minimum of $350,000 USD (up from $200,000), either as a time deposit certificate (CD) with a Panamanian bank, or in the form of a mortgage-free residential property, or a combination of the two.

For Business Investors

Until the new law, there were two visa categories for business investors: the Micro Business Investor visa, which required a minimum investmentof $40,000, and the Macro Business Investor visa with a minimum investment of $150,000. Under the new rules, only the Macro Business Investor visa will be available. To qualify, you must be the director of a company registered in Panama with a capital stock of minimum $200,000 USD, and at least three Panamanian employees.

Investing in Panama's reforestation program can also secure you permanent residency, either directly by purchasing land for reforestation, or indirectly by investing in a certified reforestation project. As with the Business Investor category, there used to be two versions: the Reforestation Micro Investor, with a minimum of $40,000, and the Reforestation Macro Investor with a minimum of $80,000. These have now been collapsed into a single category, with a minimum investment of $80,000, and an additional $4000 per dependent.

While similar to the business investor category, the investment must be for at least ten years, in a reforestation project certified by the Ministry of the Environment's Forestry Department. This can include cash crops such as teak plantations, and there are also a number of tax exemptions on any earnings from the project, as well as real estate tax exemptions for farms that turn over half their land to reforestation.

The Bottom Line

While the new rules may seem restrictive compared to what has been in place until now, there is still a great deal of flexibility for those who would like to spend time in Panama. As the public debate on the final draft of the regulations continues, further changes may be introduced to ensure Panama remains a welcoming haven for investment and retirement, but it is the total package - climate, amenities, infrastructure, economic and political stability - that remains the true draw for so many.