“Kathleen, I’m planning to apply for permanent residency in Panama this year (and probably citizenship later on in a couple of years).
“Can you advise on Panama tax matters? I’m non-U.S. (from Europe), have an online business with no business within Panama, and wonder how I would be taxed in Panama if I were to become a permanent Panama resident and later on a citizen?”
–Pete O., United States
Panama takes a jurisdictional approach to taxation. If you earn money in Panama, it’s taxed in Panama no matter your residency or citizenship status. Money earned outside Panama isn’t taxed in Panama.
Meaning that a non-Panama business earning income outside Panama isn’t taxed in Panama. Neither are any funds remitted into Panama taxed in Panama.
All that said, you should seek advice from a local tax accountant to confirm that your business is structured correctly, so as not to trigger any Panama tax liability.
“Kathleen, I was surprised to see that you listed so many South American countries ahead of Chile in your recent report. Chile is probably the most stable country from a government perspective as well as a financial one. Their dollar is strong and their banking fundamentals sound. No hanky-panky going on as it is in the Western civilizations.
“Chile has as many resources as any other South/Central America country and develops them wisely. Real estate is still affordable and beautiful. They welcome expats and foreigners and offers several means of acquiring visas and permanent residency. And get this! Their immigration laws are so simple that if you hire a lawyer to manage the process for you, they will find you odd. Don’t need a lawyer. Their infrastructure is solid, and you have Internet access all over the country.
“The population is well-educated, and crime rates are extremely low. You can hit a cafe, light up your computer, and be engaged in an intelligent conversation with a local in no time.
“The only drawback I see is that you’re going to have to learn some Español.
“Have you spent considerable time there? If not, I would suggest you do, as it would be a benefit to you and your readers. If so, then I have to ask your reasoning for putting places like Mexico, Belize (and I love Belize), Colombia, Brazil, Uruguay, Ecuador, Nicaragua, and Argentina ahead of Chile?
“All those countries have their pros and cons. However, if you look at all aspects of what you want in a country so that you don’t have to drastically change the lifestyle you’re used to in the States or Europe, I believe Chile grades out better than the other options.”
–Mike S., United States
First, my recently published list of top havens in the Americas wasn’t in any order of priority or preference.
Second, no, I haven’t spent any time in Chile. Will be visiting for the first time next week. Your report echoes those I’ve had from many others, so I’m very much looking forward to this getting-acquainted trip. Will report back from the road.