Relocation for Americans
The United States is on Panama’s Friendly Nations list, which makes residency easier for Americans than for most. We take care of the Panamanian side of the move: residency, property, banking, schools. The US side doesn’t end when you leave, since the IRS still expects a return every year, so the checklist further down is worth reading early.
Residency
Which one fits depends on whether you plan to work, retire or invest.
The usual route if you’re still working. Executive Decree 16 of 2026 kept the United States on the list. You get a two-year provisional residency first, then permanent residency.
For retirees with a pension of at least $1,000 a month, paid for life. Social Security fits that rule. Withdrawals from a 401(k) or an IRA aren’t a lifetime pension, so we look at how your retirement income is set up before you apply.
Gives permanent residency directly, with no provisional stage. The rules were rewritten in September 2026.
Amounts are those set by Executive Decrees 16 and 17 of 2026. Requirements and government fees do change, so we check the current rules against your file before you commit to anything.
Why Panama
Panama only taxes income earned in Panama. The catch for Americans is that the US taxes its citizens on worldwide income wherever they live, so moving doesn’t end your US tax bill. The checklist below covers what can reduce it.
Panama has used the US dollar since 1904. Your pension, paycheck and savings don’t need converting.
Panama City’s main private hospitals normally see patients in English. Hospital Punta Pacífica, for one, is affiliated with Johns Hopkins Medicine International. Public hospitals may not offer English. Medicare generally won’t pay for care outside the US, so you’ll need private insurance, which our insurance team can arrange.
Immigration, real estate, school enrollment and the practical setup are handled by the same team, so nothing gets lost between advisers.
On the ground
These are the same relocation services we offer every client, from the day you land until you’re settled.
Before you leave the US
Leaving the US doesn’t end your US tax life. These are the points Americans most often have to plan for. They’re US matters, so take them to a US tax professional, preferably before you sell the house or book the flight.
US citizens are taxed on worldwide income wherever they live, so you keep filing a federal return. Living abroad gives you an automatic extension to June 15, but interest on any tax you owe still runs from April 15.
For 2026 you can exclude up to $132,900 of foreign earned income if you pass the bona fide residence test or the physical presence test (330 full days abroad in any 12 months). It doesn’t cover pensions, Social Security, dividends, interest or capital gains.
If your foreign accounts together top $10,000 at any point in the year, you file an FBAR by April 15, with an automatic extension to October 15. Form 8938 applies above $200,000 at year-end or $300,000 at any time if you’re single and living abroad ($400,000 and $600,000 filing jointly). Panamanian banks report US account holders under FATCA.
Social Security keeps paying you in Panama, and can go straight into a Panamanian bank account. Answer SSA’s questionnaires or the payments stop. Medicare generally doesn’t cover care abroad, and if you drop Part B and sign up again later, you pay 10% more for each year you went without, usually for life.
Moving abroad doesn’t automatically end state residency. Some states, California for one, keep treating you as a resident until you’ve clearly given up your home there. Check your state’s rules before you go.
The US and Panama have no income tax treaty, only a tax information exchange agreement in force since 2011. There’s no Social Security totalization agreement either.
Advice Panama is a Panamanian firm. This checklist is general information about US rules, checked in September 2026. It isn’t US tax or legal advice, and your situation may change how the rules apply, so confirm each point with a US tax professional.
Next step
Vera, our AI assistant, takes the first call. She notes what your matter is about, then a professional at the firm follows up.
