Can You Work or Start a Business on Panama’s Pensionado Visa?

Overview of the Panama Pensionado Program

Pensionado is the name for Panama's retirement visa, which has been consistently chosen as one of the best. Its main strength lies in the fact that it proposes a low threshold to permanent residency. It has perks like access to a great lifestyle, low costs, and several discounts in healthcare, travel, and import of personal goods.

Today, we talk about whether it is possible to work on Panama retirement visa. If it is aimed at pensioners, then it is only logical that it won't provide the right to work, or is it not? Recent changes have been quite positive. In this article, we answer key questions about Pensionado and the possibility of working in the country of the canal. 

Eligibility Requirements for the Pensionado Visa

The program is open to citizens of any nationality who comply with the following:

• Having a lifetime pension of at least $1000 a month
• The pension can come from any type of source (private or government-based)
• Pension income of $750 a month plus a $100,000 investment in real estate 
• Proving the existence of the company granting the pension (only private pensions)
• Providing proof of receiving the income through bank statements or payment receipts (only private pensions)
• Proving to have $250 a month (income) as proof of solvency for each dependent
• Having an extra 250 income in your monthly pension for each dependent (alternative to the above)
• Proving to be in excellent health
• Proving the absence of a criminal record in the country of origin or the country of previous residencies

Financial Requirements

The main financial requirement consists of a minimum pension income of $1000 a month, which, when applied with a spouse, can be achieved by combining two pensions. In simple words, a couple earning $650 each (or 850/400, etc.) qualifies for a Pensionado Visa. 

For each dependent, 250 must be added. According to Executive Decree No. 320, Article 200, the retirees must provide proof of financial solvency for $250 for each dependent they add. This can also be included in the minimum pension income. For instance, the applicants with one dependent need an income of $1250, and those with two dependents need an income of $1500.

Here is a graph to better illustrate the point:

Now, here is another graphic, this time adding the government fees and how they impact the overall costs. Keep in mind that this doesn’t include legal fees or expenses. 

Note: fees are paid once, while the minimum income must be received monthly for life. 

Documents Required

• 3 pictures
• A copy of the passport (all pages) notarized or authenticated
• Clean criminal record
• Health certificate
• Certificate stating your status as a pensioner
• Proof of economic solvency: $250 income for each dependent
• Certificate of a real estate duly registered in the public registry (if applies)
• Letter of the company that administers the pension (if the pension derives from private sources)
• Certificate stating the existence of the company (if the pension derives from private sources)
• A copy of a proof of payment or a bank statement (if the pension derives from private sources)

Application Process

Panama is characterized by giving retirees convenient time frames to achieve their migration goals. The permit can be obtained in approximately 6 months, with the larger time frame being the waiting period. In simple words, the time the office takes to review your application. 

Next, there is a detailed list of the process step by step. 

Steps to Apply and Timeframes

Steps that require physical presence

As you can see above, two of the steps require physical presence, which means the retirees need to be present at the migration office. They will have to submit their documents in person and also receive the permanent residency approval. Everything else can be done online and through an expert, since you will be signing a power of attorney. 

More information about Panama residency

What is the Panamanian cedula?

All foreigners (retirees or not) with permanent residency have the right to obtain a Panamanian ID, which is called “cedula”. This is what symbolizes the expat’s permanent status in the country of the canal, being very similar to the ID of Panamanian natural citizens. The main difference is that it has an “E” before the ID number, representing the word “extranjero” (Spanish for foreigner). This is why it's usually called “cedula E” (E cedula).

Applying with Spouse or Dependents

Pensionado allows you to apply with your spouse and children as dependents (see above). 

Benefits of the Pensionado Visa

Tax Advantages

In Mundo’s opinion, there are very few countries in the world that treat their retirees as well as Panama. The conditions of the program are accessible, per se. On top of this, Panama adds a wide range of benefits. One of them is the possibility to import up to 10,000 dollars’ worth of personal goods and a new car every two years, both duty free.

Besides, the country of the canal is widely known for being a territorial taxation country. This means that, if you have a permanent presence in the country, you won't be taxed for the assets, accounts, royalties, and investments you maintain abroad.

Discounts Available for Pensionados

An excellent lifestyle goes hand in hand with a convenient cost of living. For pensioners, this is enhanced by discounts that cover various areas. Discounts and benefits on travel, hotel stays, medical consultations, dental and eye exams, transportation fares, technical services, utility bills, and movie, theater, and sports events tickets make life much more affordable.

Download a list of all the discounts available

Permanent Residency and Citizenship

Panama doesn't have a citizenship by investment program, so the path to citizenship is through naturalization. A permanent residency is the first step towards becoming a citizen after five years of permanently living in the country with a permanent permit. 

Property Ownership Rights

If this country has been consistently chosen by retirees and expats for decades, it's because there are good reasons. One of these reasons is that property ownership rights are exactly the same for foreigners and locals, with a few exceptions near international borders. Property is also attainable for foreigners through mortgages, whose conditions we have sorted out in one of our latest articles. 

Cost and Legal Fees

Breaking down fees

Whenever you're applying for residency, you will have to face government fees, legal fees, and expenses. Government fees are fixedly stipulated by the government, while legal fees are charged by your lawyer or consultancy agency. Besides, you will have to pay for translations, notarizations, copies, and couriers, as needed. 

The following list breaks down the fees concerning the Pension program. As for Mundo’s fees, these will be provided during formal consultations. 

• Legal Fees – Main Applicant: Consult
• Legal Fees – Dependents: Consult 
• Government Fees – Main Applicant: $750 
• Government Fees – Each Dependent: $750 
• Bank Account Opening: Consult 
• Rental Agreement Assistance (if needed): Consult 
• Tax Residency Certificate (optional): Consult 
• Monthly Bill Setup (optional): Consult 
• Translation, notarization, and document authentication: Depending on the case

Disclaimer: The fees, conditions, requirements, and other information about the pensionado visa stated in this article may be inaccurate or outdated at the time of reading. Updated information and case-by-case advice will be given only through formal consultations. This article doesn't constitute migration or legal advice. Before applying for residency in any foreign country, make sure to consult with certified professionals. 

Apply for Panama residency now

Pros and Cons of Retiring in Panama

Working in Panama with a Pensionado Visa

One of the biggest improvements across all Panamanian programs was when pensionado allowed the right to a work permit. Even though it's aimed at pensioners, the visa now allows for a work permit and conducting business.

Obtaining a Work Permit

A work permit is obtained at the Ministry of Labor by submitting the letter of approval. In general, they last as long as the visa lasts (in this case, it's permanent).

Job Opportunities for Retirees

A clear sector that constitutes a pool of opportunities for retirees is education. There are plenty of international schools where to get employment, some of them fully English-speaking. Hence, they need English native teachers, assistants, and so on. Other popular jobs include writing, blogging, or freelance services. 

Restrictions for foreigners when it comes to employment

Some professions can be carried out only by Panamanian citizens. This means that you can't be employed or freelance in any of these professions even if you are a permanent resident. 

Frequently Asked Questions

Can I work with a Pensionado Visa?

Yes, but only if you have a working permit. A working permit is relatively easy to get once you obtain a legal resident status. Please be aware of the restrictions when it comes to foreign employment (see above).

Does the Pensionado status allow me to work automatically? 

No, it is mandatory to have the corresponding work permit if you want to have any type of employment.

How long does the work permit last?

In general, it lasts as long as the residency (two years for friendly nations, permanently for retirement and qualified investor, etc)

Can I work only with a Panamanian Cedula?

No. The Panamanian cedula will be your national ID, and it will help you open bank accounts, purchase real estate, and perform several other processes. However, working in Panama is only legal with the proper permit.

Does my Panamanian cedula needs renewal?

Yes. The Panamanian cedula needs renewal. This is an easy process if you maintain your residency and comply with all your responsibilities.

What type of pension is required?

Any lifetime pension makes you eligible, regardless of the source.

Can I leave Panama with this visa?

Yes, as a permanent resident, you are free to come and go in and out of Panama. The minimum stay requirements are flexible, with a week or two (every two years) being sufficient.

Does the Pensionado Visa grant permanent residency?

Yes. 

Final thoughts: work and thrive in Panama as a retiree 

To sum up, the pensionado program is an outstanding pathway towards permanent residency. In Mundo’s view, it is the best one if you have a lifetime pension. It stands out for its flexibility, accessibility, and wide array of benefits.

Who we are and how we can help you

Mundo’s experts have wide experience when it comes to Panama residencies, banking, corporate trust services, real estate, and wealth management in general. All of our team members have years of experience helping expats, global citizens, and international investors achieve their goals and fulfill their dreams.

Contact us and ask for a consultation with your Mundo expert so that we can help you implement the right tools for your financial and personal plan. 

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