Understanding Decree No. 722 in Panama

In recent years, Panama has become an attractive destination for foreign investors seeking permanent residency through the Qualified Investor category. The regulatory landscape governing this process underwent significant changes with the issuance of Decree No. 722 on October 15, 2020. This executive decree, modified by Executive Decree No. / 09 on January 3, 2022, introduces adjustments to the requirements and provisions for the subcategory of Permanent Resident for Economic Reasons, specifically for Qualified Investors.

Background and Legal Framework

The legal foundation for the modification lies in the powers granted to the Executive Branch by the Immigration Law of 2008. This law empowers the Executive to regulate migratory categories and subcategories, ensuring they align with national interests in security, public health, order, and the protection of rights and freedoms.

Executive Decree No. 722, issued in 2020, initially created the subcategory of Permanent Resident for Economic Reasons, specifically for Qualified Investors. This designation aimed to encourage foreign investment, particularly through real estate ventures, with positive impacts on Panama's economic and social development.

Key Changes Introduced by Executive Decree No. 109

The recent modification, Executive Decree No. 109, introduces crucial changes to the investment requirements for the Permanent Residency as a Qualified Investor subcategory. The most notable adjustments include:

Real Estate Investment Criteria:

1. The minimum investment for Permanent Residency as a Qualified Investor through real estate is set at five hundred thousand balboas (B/. 500,000.00).
2. Applicants must ensure the purchased property is free of encumbrances.

Alternative Real Estate Investment Method:

1. Qualified Investors can opt for a promissory sales agreement with a deposit of five hundred thousand balboas (B/. 500,000.00) via a trust managed by a local bank or fiduciary entity.

Investment through Securities with Licensed Brokers:

1. Investors can also qualify by investing a minimum of five hundred thousand balboas (B/. 500,000.00) in securities issued by entities whose businesses impact the national territory.

Fixed-Term Deposit in the Banking Sector:

1. Qualified Investors can choose to invest a minimum of seven hundred fifty thousand balboas (B/. 750,000.00) in fixed-term deposits with a licensed bank operating in Panama.

Transitional Provisions and Effective Date

Executive Decree No. 109 includes transitional provisions allowing for a reduced real estate investment of three hundred thousand balboas (B/. 300,000.00) during the first forty-eight months after its implementation. This provision aims to facilitate a smooth transition for individuals with pending or initiated applications under the previous decree.

In conclusion, the recent modifications to Executive Decree No. 722 present opportunities for foreign investors seeking permanent residency in Panama. The adjusted criteria provide flexibility while maintaining the government's commitment to economic development and national interests.

If you are considering applying for Permanent Residency as a Qualified Investor in Panama or need assistance navigating the updated requirements, our legal experts at Legal@Work are here to help. Contact us today for personalized guidance and support throughout the application process.

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