Moving to Panama from the US: A Legal Guide for Americans

Which residency can an American get?

• Retirees with a lifetime pension: the Pensionado Visa, with a minimum pension of USD 1,000 a month. A Social Security retirement benefit is a lifetime pension and is commonly used to qualify, with a benefit letter from SSA.
• Americans with a job or an investment in Panama: the Friendly Nations Visa, because the United States is on the list of eligible countries.
• Remote workers paid from abroad: the remote worker visa, which is temporary.
• Investors: the Qualified Investor visa, with permanent residency from the start, or economic solvency residency.
• Families: your spouse and dependent children can usually be included in your application (see family reunification).

Compare all of them in Panama visa options.

Which documents do you need from the US?

• Criminal record: an FBI background check (Identity History Summary). As a federal document, it is apostilled by the US Department of State's Office of Authentications, not by a state.
• Birth and marriage certificates: apostilled by the Secretary of State of the state that issued them.
• Proof of income: for example, your SSA benefit letter or pension statements, apostilled when the residency option requires it.
• Translations: everything must be translated into Spanish by an authorized public translator in Panama (see embassies and consulates).

Some documents, such as the background check, are only accepted for a limited time after they are issued: request them close to your filing date.

Do you still pay US taxes?

Yes. The United States taxes its citizens on their worldwide income wherever they live, so you will normally keep filing a US return. US rules offer ways to reduce double taxation, such as the foreign earned income exclusion for salaries and self-employment income, and the foreign tax credit. There is no income tax treaty between the United States and Panama (see double tax treaties).

• FBAR: if the combined value of your foreign financial accounts exceeds USD 10,000 at any time during the year, you must file FinCEN Form 114.
• Form 8938 (FATCA): you may also have to report specified foreign financial assets with your tax return, depending on their value.
• In Panama: your foreign-source income, such as Social Security or a US pension, is generally not taxed under Panama's territorial system. Income earned in Panama is.

We do not advise on US tax law: review your situation with a US tax professional before you move.

Social Security and Medicare

• Social Security: US citizens can generally keep receiving their benefits in Panama. Check your case with SSA's Payments Abroad Screening Tool and keep your address up to date.
• Medicare: it usually does not cover health care outside the United States. Most American retirees in Panama buy private health insurance or an international policy.
• Proof of life: SSA may periodically ask you to confirm that you are still eligible; answer on time to avoid a suspension (see receiving your foreign pension).

Banking, moving your belongings and driving

• Banks: Panamanian banks report US clients' accounts to the IRS under FATCA, and they apply strict due diligence; prepare a reference letter from your US bank (see opening a bank account).
• Currency: Panama uses the US dollar, so there is no exchange rate risk on dollar income (see Panama's currency).
• Household goods: pensionados can import their household goods with a tax exemption.
• Cash: declare USD 10,000 or more in cash when entering Panama (see declaring cash).
• Driving: you can drive on your US license for 90 days as a tourist; once you are a resident, convert it to a Panamanian license (see driver's license).