Work Remotely from Panama: Complete Guide

Yes, you can work remotely from Panama for US or EU companies. Panama offers a Short Stay Visa specifically designed for remote workers, allowing digital nomads to stay up to 18 months. With excellent infrastructure, official use of the US dollar, strong internet connectivity, and its position as a major financial and logistics hub, Panama combines First World amenities with Latin American affordability and tropical lifestyle.

Key Facts

Visa: Short Stay Visa for Remote Workers (up to 18 months)
Timezone: GMT-5 (same as US Eastern Time year-round, no DST)
Cost of Living: $1,800-$3,000/month for comfortable lifestyle in Panama City
Internet Speed: 100-300 Mbps fiber widely available, best in Central America
Currency: Panamanian Balboa (PAB) = US Dollar (both used interchangeably)
Language: Spanish primary, but English widely spoken in business/expat areas
Infrastructure: Most developed in Central America, modern banking and healthcare

Visa Options

Panama has developed one of Central America’s most straightforward visa programs for remote workers:

Short Stay Visa for Remote Workers (Visa de Corta Estancia para Trabajadores Remotos)

Introduced in 2021 specifically for digital nomads, this visa allows remote workers to legally stay in Panama for extended periods.

Requirements:

Proof of employment with foreign company (employment contract, pay stubs)
OR proof of freelance income from foreign clients (contracts, invoices)
Minimum income requirement: $3,000 USD per month
Valid passport with at least 12 months validity
Health insurance covering Panama
Clean criminal background check (apostilled)
Application fee: approximately $250-$300
Letter explaining your work and intention to stay in Panama

Benefits:

Initial 9-month stay, renewable for another 9 months (18 months total)
Can enter/exit Panama freely during validity
No Panamanian taxes on foreign income
Bring dependents (spouse, children) with proof of relationship
Can open Panamanian bank accounts

Process:

Apply through Panama’s National Immigration Service (Servicio Nacional de Migración)
Can apply online or in-person in Panama City
Processing time: 2-4 weeks typically
Requires in-person biometrics appointment in Panama

Tourist Visa

Citizens of most Western countries (US, EU, Canada, Australia, UK) receive 180 days visa-free upon entry with a tourist stamp. This generous allowance makes Panama very accessible.

Note: Some nationalities get only 90 days, verify for your citizenship.

Friendly Nations Visa

For citizens of 50+ “friendly nations” (including US, EU, Canada, Australia), Panama offers a straightforward path to permanent residence through the Friendly Nations program.

Requirements:

Professional or economic ties to Panama (bank account, property, employment)
Investment of $5,000+ in Panama (can be as simple as bank deposit)
Valid passport and background check

This leads to permanent residence after initial temporary period.

Pensionado Visa (Retiree Visa)

For those 18+ receiving $1,000+ monthly pension or permanent retirement income. Offers extensive discounts on services throughout Panama (25% off restaurants, 20% off medical, 15% off hospital bills, 50% off entertainment).

Not suitable for most digital nomads unless you have qualifying pension income.

Tax Implications

Panama offers one of the world’s most favorable tax systems for foreign income:

Territorial Tax System

Panama operates on a territorial tax system, meaning only income sourced within Panama is taxable. Foreign-sourced income is NOT taxed in Panama, regardless of residence status.

Digital Nomad Tax Benefits

Remote workers earning income from foreign companies enjoy significant advantages:

Zero Panamanian taxes on foreign employment income
Zero Panamanian taxes on foreign freelance income
Applies regardless of how long you stay in Panama
No need to file Panamanian tax returns for foreign income
Valid even if you become a tax resident

Tax Residency

You can become a Panamanian tax resident without triggering taxes on foreign income thanks to the territorial system. Tax residency requirements:

Having residence visa, OR
Staying 183+ days in a calendar year

Even as resident, only Panama-sourced income is taxed.

US Citizens

US citizens must continue filing US tax returns and paying US taxes regardless of where they live, as the US taxes based on citizenship, not residence.

Banking

Panama is a major financial center with strong banking privacy laws. You can easily open local bank accounts with residence visa. However, due to international financial transparency agreements (FATCA, CRS), banks report accounts to relevant countries.

Important Considerations

Keep documentation proving foreign source of income
Maintain records for home country tax purposes
Consult with international tax professional for complex situations
Panama has tax treaties with several countries
Don’t perform work for Panamanian clients without understanding local tax implications

Best Cities for Remote Work

Panama’s small size means most digital nomads concentrate in a few key areas:

Panama City

The capital and financial hub of Central America, Panama City offers a dramatic skyline, modern infrastructure, and cosmopolitan lifestyle.

Pros: Best internet in Central America (100-300 Mbps fiber), numerous coworking spaces (Selina, Pipeline, Workengine), international airport with flights throughout Americas, modern banking, excellent healthcare, diverse restaurant scene, large expat community, English widely spoken, shopping malls, mix of modern city and historic Casco Viejo, beaches nearby.

Cons: Most expensive city in Central America, traffic congestion severe, hot and humid year-round (80-95°F), rainy season intense (May-November), income inequality visible, can feel more like Miami than Latin America, less “authentic” cultural experience.

Best neighborhoods:

Casco Viejo: Historic district, cobblestone streets, hip cafes, boutique hotels, cultural scene, touristy but charming
Obarrio/Bella Vista: Business district, high-rises, restaurants, nightlife, central location
Punta Pacifica: Upscale residential, ocean views, shopping, expat-heavy
San Francisco: Mix of residential and commercial, good value, local feel

Monthly cost: $2,000-$3,500 for comfortable lifestyle.

Coronado Beach

A gated beach community about 90 minutes from Panama City, Coronado is popular with expat retirees and remote workers seeking beach lifestyle.

Pros: Beach access, gated security, lower cost than Panama City, modern amenities, golf courses, established expat community, English common, peaceful lifestyle, warm weather year-round, good restaurants, nearby supermarkets.

Cons: Limited coworking spaces, internet less reliable than Panama City (verify provider before committing), requires car for most activities, can feel isolated from city amenities, expat bubble feeling, less cultural immersion, limited nightlife.

Best for: Beach lovers, families, those seeking relaxed pace, people comfortable driving, remote workers with flexible schedules.

Monthly cost: $1,500-$2,500 for comfortable lifestyle.

Boquete

A mountain town in Chiriquí Province known for coffee plantations, cool climate, and stunning highland scenery at 4,000 feet elevation.

Pros: Spring-like weather (60-75°F) escaping tropical heat, natural beauty, hiking and outdoor activities, coffee culture, expat retirement community, low cost of living, peaceful lifestyle, nature-focused, excellent coffee.

Cons: Small town (15,000 population), limited coworking infrastructure, internet quality variable (20-50 Mbps typically), requires long travel to Panama City (7 hours by bus, regional flight to David), can feel isolated, rainy and foggy, limited restaurants/entertainment, older expat demographic.

Best for: Nature lovers, outdoor enthusiasts, coffee aficionados, those escaping heat, digital nomads seeking mountain tranquility.

Monthly cost: $1,200-$2,000 for comfortable lifestyle.

Timezone Overlap

Panama operates on Eastern Standard Time (EST, GMT-5) year-round with no daylight saving time:

North America

US East Coast: Perfect alignment during EST, 1 hour behind during EDT
US Central: 1 hour behind Panama
US West Coast: 3 hours behind Panama (9 AM PST = 12 PM Panama time)
Canada: Similar to US timezones

Panama offers exceptional timezone overlap with US companies, allowing complete business hours alignment. This is one of Panama’s biggest advantages for remote workers with US-based employers.

Europe

UK/Portugal: 5-6 hours behind Panama (depending on daylight saving)
Central Europe: 6-7 hours behind Panama
9 AM CET = 2-3 AM Panama time (challenging for morning meetings)

European meetings happen late afternoon/evening for Panama-based workers. Early morning meetings with Europe are difficult unless you adjust schedule. Better suited for asynchronous work or flexible hours.

Latin America

Colombia/Ecuador/Peru: Same timezone (0 hours difference)
Brazil: 1-3 hours ahead depending on location
Mexico: 1-2 hours behind depending on region
Argentina/Chile: 1-3 hours ahead depending on season

Excellent for working with Latin American companies or distributed teams across the region.

Asia-Pacific

Significant timezone difference (12-16 hours) makes synchronous collaboration very challenging. Requires asynchronous communication or unusual working hours.

Your Panama Remote Work Checklist

Frequently Asked Questions

Why is Panama more expensive than other Central American countries?

Panama's higher cost of living reflects its status as Central America's most developed economy and major financial hub. The use of US dollar eliminates currency devaluation benefits seen in countries with weaker local currencies. Panama City rivals Miami in pricing for rent ($800-$1,500 for decent one-bedroom in good area), restaurants ($10-$20 for meals), and services. The country's economic success, strong banking sector, canal revenue, and position as regional business center drive higher prices. However, you get what you pay for: best internet infrastructure in region, modern healthcare comparable to US/Europe, reliable utilities, extensive shopping, international cuisine, and political stability. Outside Panama City, costs drop 30-40% in places like Coronado or Boquete. Many nomads find the premium worth it for the reliability and infrastructure.

How does Panama's territorial tax system work for digital nomads?

Panama's territorial tax system is one of the world's most favorable for remote workers. Only income sourced from Panamanian territory is subject to Panamanian taxes - income earned abroad is completely exempt, regardless of whether you're a resident or how long you stay. For digital nomads working remotely for foreign companies or clients, this means zero Panamanian taxes on your remote income. This applies even if you live in Panama full-time with residence visa. You don't file Panamanian tax returns for foreign income. Keep documentation proving foreign source (employment contracts, client locations, payment sources). This contrasts with citizenship-based taxation (like US) or worldwide taxation systems. However, if you provide services to Panamanian clients or companies, that income would be Panama-sourced and taxable. Always maintain home country tax compliance.

Is English really widely spoken in Panama?

English proficiency in Panama is significantly higher than most Latin American countries due to historical US presence (Canal Zone until 1999), strong business ties with US, and position as international financial center. In Panama City's business districts, expat neighborhoods (Punta Pacifica, Casco Viejo), major hotels, international hospitals, and banks, English is commonly spoken. Many Panamanians working in tourism, finance, or with international companies speak functional to fluent English. However, Spanish is still the primary language - outside tourist/business areas, in government offices, local neighborhoods, and outside Panama City, Spanish is necessary. Restaurant menus, street signs, and official documents are in Spanish. Basic Spanish greatly enhances your experience and shows respect for local culture. Panama is more English-friendly than Peru, Ecuador, or Colombia, but less than Costa Rica. Think of it as 50/50 in expat areas, 80/20 Spanish elsewhere.

What are the downsides of living in Panama as a digital nomad?

Despite many advantages, Panama has notable drawbacks. Cost of living in Panama City rivals major US cities - expect $2,000-$3,500/month for comfortable lifestyle, much higher than Peru, Ecuador, or Colombia. The climate is relentlessly hot and humid (80-95°F, high humidity) year-round with intense rainy season May-November (daily afternoon downpours). Traffic in Panama City is horrendous during rush hours. The city can feel more like Miami than Latin America, lacking cultural authenticity some nomads seek. Income inequality is stark and visible. Outside Panama City, options are limited - Coronado is expat-centric beach community, Boquete is small mountain town. Crime exists, particularly petty theft in tourist areas. The country is geographically small, limiting long-term exploration compared to larger nations. Healthcare is good but expensive compared to other Latin countries. For budget-conscious nomads or those seeking deep cultural immersion, other Latin American countries may be better fits.

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Last updated: January 20, 2026