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State Pension Plans in Panama

Panama makes it possible for pensioners to live in Panama with what is called the pensionado visa, or pension visa. There is no age requirement for the visa as long as one can prove they receive $1,000 USD a month from a private or government pension.

In order to apply for the pensionado visa, one must first find a lawyer and collect a list of documents from their country of residence that prove their pension status. Once the documents are collected and the visa application is filled out, one must visit Panama and obtain a temporary residence card. A visit to an immigration office to take an identification photo is also required. Immigration offices are located in the cities of Santiago, Panama City and David.

It can take up to six months for the immigration office to approve an application for the pensionado visa. Once approved, the next step is to obtain a permanent residence card at the immigration office in Panama City.

Benefits of the pensionado visa include:

• One-time exemption on import duty up to $10,000 USD on all personal and household goods.
• Exemption on import duty on a car, tax-free, every couple of years.
• The right to a residency visa for all foreigners who buy a home of above $200,000.
• 100% exemption on property tax in case of sole residence.
• 50% reduction in home loan closing costs.
• 10% discount on prescription medications.
• 20% off on visits to the doctor and surgical procedures.
• 15% discount on dental procedures.
• 25% discount at some restaurants.
• 30% discount on train, bus and boat fees

Company Pension Plans in Panama

If one's pension is from a private corporation, it is entitled to all the benefits and regulations of the pensionado visa. In order to be approved for the visa with a company pension, one must provide an official letter from the company that pays the applicant's retirement or pension income. The letter must be signed by a representative of the company, certifying that the person receives a "pension" in the amount of at least a lifetime's worth of $1,000 USD per month. This letter can be provided by a private retirement or insurance company.

Private Pension Plans in Panama

If one's pension is a private pension plan, it is entitled to all the benefits and regulations of the pensionado visa. To be approved for the visa with a private pension plan, one must provide an official letter from the institution that pays the applicant's retirement or pension income. The letter must be signed by a representative of the institution, certifying that the person receives a "pension" in the amount of at least a lifetime's worth of $1,000 USD per month. This letter can be provided by a mutual fund manager, bank, insurance company or trust.

Expat Pension Plans in Panama

A few countries, such as China and Canada, have a bilateral agreement with Panama that allow for years worked in Panama to count towards their State pension. Inquire with your state plan about the particulars.

If your country does not allow for years worked in Panama to count toward your state pension, there may be an opportunity to buy back time once you have returned to your home country and are once again contributing to the pension plan. Again, inquire with your state plan about the details.

Making Contributions to your Pension while Abroad

Expats can make tax-deductible contributions to private pension plans not exceeding 10% of the individual's gross yearly income.

Collecting Pension while Abroad

One can collect a monthly foreign pension from a foreign government, private company, or international organization.