Can I Be a Freelancer or Digital Nomad in Panama?
Yes, Panama is a growing destination for freelancers and digital nomads due to its attractive lifestyle, robust infrastructure, and favorable tax system. Whether you are working remotely for a foreign employer or running your own freelance business, Panama offers a supportive environment for remote work. Here’s what you need to know:
Visa and Residency Options for Digital Nomads and Freelancers
Panama has developed visa options to accommodate the needs of freelancers and digital nomads. One of the most relevant options is the Short-Term Remote Worker Visa, introduced in 2021 under Decree No. 198. This visa allows remote workers and freelancers to legally live and work in Panama for up to 18 months. Key requirements include:
- Income Proof: Applicants must demonstrate an annual income of at least $36,000 from foreign sources.
- Remote Work: You must prove that your work is performed for a company located outside Panama, or that your freelance clients are foreign.
- Health Insurance: You need to have health insurance that provides coverage in Panama for the duration of your stay.
- Declaration: You must submit a sworn declaration stating that you will not accept any job offers from Panamanian employers during your stay.
For Freelancers and Self-Employed Workers
Freelancers who work with clients or companies based abroad can also benefit from this visa. The application requires documentation such as:
- Certificate of Company Existence: Proof that your freelance business or the foreign company you work with is legally registered abroad.
- Proof of Income: Authenticated bank statements showing consistent earnings from foreign sources.
- Notarized Declaration: A sworn statement before a notary detailing your freelance activities, services, and clients abroad.
Tax Benefits for Digital Nomads
Panama operates on a territorial tax system, meaning you are only taxed on income generated within Panama. As a freelancer or digital nomad earning income from foreign sources, you would not be liable for income tax on your foreign earnings. This tax structure is a significant draw for remote workers, as it allows you to avoid double taxation on your income earned outside Panama.
Living Costs and Connectivity
One of Panama’s key advantages for freelancers and digital nomads is its relatively low cost of living, especially outside of Panama City. Affordable rent, food, and services make it easy to manage your finances while enjoying a high quality of life.
Read more in our extended article about the cost of living clicking here
Panama is also known for its reliable internet connectivity, particularly in urban areas. High-speed internet is essential for remote work, and Panama’s infrastructure makes it easy to stay connected. Additionally, coworking spaces like Workings, My Office, and Panamacoworking provide great options for digital nomads looking for a professional workspace and opportunities to network.
Expat Communities and Networking
Panama has a vibrant expat community, which makes it easier to connect with others, whether for social or professional reasons. Cities like Panama City, Coronado, Boquete, and Pedasi have established expat networks that host regular meetups and events, allowing newcomers to quickly integrate into local life.
Social and Leisure Activities
Aside from work, Panama offers plenty of opportunities to engage in leisure activities and meet new people. Whether it’s joining sports clubs, attending language classes, or participating in cultural events like concerts and festivals, there are many ways to build a social network in Panama.
Conclusion
Panama is an ideal destination for freelancers and digital nomads, offering a favorable visa process, excellent connectivity, a welcoming expat community, and a territorial tax system that exempts foreign income from taxation. By leveraging the available visa options and tapping into local coworking spaces and expat networks, you can enjoy a rewarding lifestyle while working remotely in Panama.