It is alot of paperwork to get residency, but it might be worth it.
There are many reasons to live in Panama.
You don't need a residency visa to enjoy most them.
However, there are practical and concrete reasons to get a resident permit.
Americans may have more reasons to get a Panama residency than other foreigners, but every nationality benefits. (Scroll down for 3 American specific reasons)
At a certain age (55 for women, 60 for men), enjoy discounts on services. (Even if you don't have a Pensionado visa, all permanent residents get those same Pensionado discounts, if they are old enough.)
You will get a cedula. A cedula is a Panama ID card, which you can only get as a Panama resident. (Cedulas for foreigners are called an e-cedulas. The e stands for extranjero.)
Life is easier with a cedula. Any government, banking, or really any task that requires you to show an ID, will get done much more quickly if you have a cedula. People are just used to dealing with cedulas. They tend to slow down and have questions when confronted with a passport.
About Cedulas & Their Perks
As I said, a cedula is a Panama ID card. You can only apply for a cedula, after you become a Panama resident.
A cedula is forever. It is a document with a number specific to you. Like your social security number, it never changes.
Without a cedula, anything you do: getting a bank account, electricity, buying land, or even registering your car is done using your passport number. Unfortunately, every time you renew your passport you get a new passport number as well. Changing the passport number you have associated with almost everything in Panama is a nightmare and takes time.
More Cedula Perks
Again, it is much easier to open new bank accounts, and more, using a cedula, just like the local Panamanians do.
You don't need to haul your passport around anymore. Just flash your cedula.
A cedula entitles you to all the benefits of a Panama citizen, except voting.
Want to apply for Panama citizenship? You must have a cedula first.
If you’re an American, you may have even more reasons to want be a Panama resident.
3 Reasons To Consider
Foreign Earned Income Exclusion(FEIE). If you live in Panama, the IRS allows you to exclude earnings of up to $108,600 ($217,200, if married) in 2015 dollars. Those are tax free dollars. (Note: You can only claim FEIE if you live overseas for most of the year. Read this US Tax post for more.)
Makes it easier to open a bank account in Panama. Many Panamanian banks won't let Americans open a bank account unless they have a residence permit (or are in process of getting one). (Read this post about opening a bank account in Panama)
If this US election season is making you uneasy, if you are looking for an exit strategy, then you will need a place to go. Having Panama residency gives you a place to go, should you decide to leave the United States.
Until March 6, 2017, many people lived in Panama as tourists for many years. But no longer!
You will need many documents to get residency: an FBI report, finger prints, birth certificates, medical examination reports, affidavits and more. It all must be certified, authenticated, notarized, stamped and gathered together and submitted, in person, in your presence. And some of those documents, like your FBI report, can expire and need to be done again if too much time passes before you are able to submit it.
You may want to hold off on getting your residency visa until you are sure you want to live in Panama on a long-term basis. The tourist visa gives you 180 days to check out Panama as you decide if it is a good fit.
