Panama enacted Law 24 to encourage private investment in efforts to restore the country's rapidly diminishing tropical forests. At the time the law was passed, Panama's tropical forests were disappearing at the rate of 79,000 hectares (about 195,213 acres) per year. To reverse this trend, Law 24 offers significant tax advantages and residency visa eligibility to investors in government-approved reforestation projects.
Panama's environmental protection agency ANAM ( Autoridad Nacional del Ambiente) oversees reforestation projects. Below are the key benefits of the reforestation program to investors.
- All wood that is harvested within the project is exonerated from Panamanian taxes, including export taxes, for 25 years. All capital gains from the project are tax exempt, and all direct and indirect investments in the project are 100% deductible from the investor's Panamanian income tax. In addition, no real estate taxes are levied against the land while in the reforestation project.
- Any equipment and materials purchased for use in the reforestation project can be brought into Panama tax-free. This includes vehicles and heavy equipment, which would normally be subject to import taxes.
- Individuals who present proof that they have invested at least $80,000 in an approved reforestation project, including the purchase of the land itself, can apply for a Panamanian reforestation residency visa. This visa is particularly advantageous for those who want to live in Panama but who do not qualify for a retiree visa and want to avoid the lengthy process of obtaining a standard investor's visa.
- After 5 consecutive years of holding permanent residency status, an individual may apply to become a naturalized citizen of Panama and receive a Panamanian passport. It is not necessary to live in Panama while your visa application is being processed, although periodic visits to the Panama City immigration office are required.
- Panama places no age limits on the reforestation residency visa, other than requiring that the applicant be at least 18 years old. Dependents can also be covered in the program, including the applicant's spouse and any children under 18. Children between the ages of 18 and 25 who are unmarried students with no children of their own may also qualify as dependents of the applicant.
Procedure for Obtaining a Reforestation Residency Visa
To obtain a reforestation residency visa, you must invest at least $80,000 in 51% ownership in a reforestation project that has been approved and registered with ANAM. You can then begin the process of applying for your residency visa. For this process, you must be represented by a Panamanian attorney. The bilingual attorneys recommended by Panama Forestry have extensive experience in guiding clients through the visa application process and will keep you informed of the status of your application.
Your Panamanian attorney will give you a list of documents that are required for your visa application. These include a police record/police clearance report, since the government of Panama reserves the right to reject otherwise qualified applicants who have a criminal history. Your attorney will advise you on how recent the documentation must be and what authentication is required from your home country and/or from the Panamanian consulate in your area. Your attorney can also help you obtain a Panamanian health certificate and advise you on where to get documents notarized and photographs taken.
The application process for a reforestation residency visa is as follows:
- 1.You and any dependents to be included in the visa must present yourselves to the immigration authorities for the initial visa application. This process requires that you spend at least 6 working days in Panama. When the office has registered your application and examined your documentation, they will issue you a provisional visa that is good for 3 to 4 months.
- 2.Within 4 months of the expiration of the provisional visa, you must return to the immigration office to apply for your 1-year immigrant visa. This stage of the process requires about 7 working days.
- 3.Before the first 1-year immigrant visa expires, you must apply for a second 1-year provisional visa.
- 4.Before the second 1-year immigrant visa expires, you must apply for a third 1-year provisional visa.
- 5.After your third year of holding a provisional visa, you can apply for a permanent residency card.
- 6.Five years after receiving your permanent residency, you can apply for Panamanian citizenship.
Note that legal fees are not included in the $100,000 100% ownership investment package offered by Panama Forestry. However, we can recommend qualified bilingual attorneys and provide general guidelines on what you can expect to pay for legal services.