Territorial tax. Foreign-source income exempt. New construction exempt up to 20 years.

Panama operates a territorial tax system: only Panama-source income is taxed. Foreign-source income (dividends from foreign companies, capital gains on foreign investments, salary earned abroad) is generally tax-free for residents. Real estate gains within Panama are taxed at progressive rates with substantial exemptions for primary residence. Annual property tax exemption available for new construction up to 20 years.

Panama uses the US dollar as its official currency, eliminating exchange-rate risk for USD-denominated investors. Strong banking secrecy tradition (within OECD-compliant frameworks). Strategic position connecting the Americas with a 3-hour flight to Miami. Politically stable since 1990s; pro-foreign-investment legal environment. Friendly Nations Visa offers permanent residency to citizens of 50+ countries through investment or qualifying employment.