Panama Friendly Nations Visa vs Puerto Rico Act 60 (Individual Resident Investor & Export Services)
A factual side-by-side comparison of two residency programmes. All figures are drawn from the canonical program pages — follow either link in the table header for sources and the full profile.
Key Differences at a Glance
- ›Panama Friendly Nations Visa leads to citizenship (~5 yrs); Puerto Rico Act 60 (Individual Resident Investor & Export Services) does not.
- ›Panama Friendly Nations Visa requires a 200,000 USD investment; Puerto Rico Act 60 (Individual Resident Investor & Export Services) does not.
Panama Friendly Nations Visa Panama · passive income | Puerto Rico Act 60 (Individual Resident Investor & Export Services) United States · other | |
|---|---|---|
| Country | Panama | United States |
| Category | Passive Income | Other |
| Application Fee | $800 | $750 |
| Minimum Income | — | — |
| Minimum Investment | $200,000 | — |
| Processing Time | 3 months | 3 months |
| Family Included | Spouse and dependents can be included on the same application at minimal additional cost | Spouse and dependents are covered as part of the household relocation and face no separate immigration hurdle (they are already US citizens or otherwise share the applicant's existing US status); each adult who independently wants Individual Resident Investor tax benefits generally needs to separately qualify as a bona fide Puerto Rico resident. |
| Path to PR | Yes — 0 years | No |
| Path to Citizenship | Yes — 5 years | No |
| Physical Presence | Must visit Panama at least once every 2 years to maintain permanent residency | Not a visa or immigration status — US citizens and other US nationals may relocate to Puerto Rico as freely as moving between US states. To claim Act 60 tax benefits, however, an individual must qualify as a 'bona fide resident' of Puerto Rico under IRC Section 937, generally requiring: (1) a presence test — at least 183 days in Puerto Rico during the tax year (limited alternative tests exist), (2) a tax home test — the applicant's tax home must be in Puerto Rico, and (3) a closer connection test — a closer connection to Puerto Rico than to the US mainland or any foreign country, evidenced by a primary home, family location, and registrations (driver's license, voter registration, vehicles) based in Puerto Rico. |
| Dual Citizenship | Allowed | Allowed |
| Tax Impact | Panama uses a territorial tax system; only Panama-sourced income is taxed. Foreign income — including remote work earnings, investments, pensions, and business income from abroad — is completely exempt from Panamanian income tax. | Bona fide Puerto Rico residents are, under IRC Section 933, excluded from US federal income tax on Puerto Rico-source income. Layered with an Act 60 Individual Resident Investor decree, this delivers 0% Puerto Rico tax on PR-source capital gains, interest, and dividends realised after the decree date and the establishment of bona fide residency — only gains accrued after relocating are covered; pre-move built-in gains generally remain subject to federal capital gains tax, subject to a bifurcation/phase-in rule tied to how long the asset is held post-move. Separately, Act 60's Export Services chapter (successor to Act 20) offers a flat 4% Puerto Rico corporate tax rate on eligible income from services exported to clients outside Puerto Rico, plus a substantial exemption on distributions of those earnings to Puerto Rico resident shareholders. This is the only route by which a US citizen can materially reduce federal tax exposure on qualifying investment and export-services income without renouncing US citizenship. |
| Tax Residency Trigger | 183 days/yr | 183 days/yr |
| Worldwide Taxation | Territorial | Territorial |
| Renewal Cost | — | $5,000 |
About Panama Friendly Nations Visa
Panama's Friendly Nations Visa grants immediate permanent residency — not a temporary status that converts later — to nationals of roughly 50 designated countries, including the US, UK, Canada, most EU states, and Australia, who demonstrate economic ties to Panama. Qualifying routes include a real estate purchase of $200,000+, a bank time deposit of $200,000+, or a confirmed employment contract with a Panamanian company; a 2021 reform tightened these criteria after a looser prior standard was widely used. Spouses and dependents join the same application for modest extra cost. Holders must visit Panama at least once every two years to keep status active. Citizenship is available after 5 years, though naturalisation generally requires renouncing prior nationality. Panama's territorial tax system is a major draw: only Panama-sourced income is taxed, so foreign salary, remote-work earnings, investments, and pensions are fully exempt regardless of where held; the country also uses the US dollar. Bank account opening has become notably harder since 2021 amid heightened global anti-money-laundering scrutiny, and most applicants use an immigration attorney.
Full Panama Friendly Nations Visa profile →About Puerto Rico Act 60 (Individual Resident Investor & Export Services)
Puerto Rico's Act 60 of 2019 (the Puerto Rico Incentives Code) consolidated dozens of prior tax-incentive laws — most notably Act 22-2012 (Individual Investors) and Act 20-2012 (Export Services) — into a single unified code effective January 1, 2020. It is not a visa: as a US territory, Puerto Rico requires no immigration process for US citizens, who can relocate as freely as moving between states. What Act 60 offers instead is a Puerto Rico tax decree layered on top of that existing right to relocate. Individual Resident Investor decree holders who become genuine bona fide Puerto Rico residents (183+ days per year, primary home, and closer connection to Puerto Rico than to the mainland or any other jurisdiction) pay 0% Puerto Rico tax on qualifying PR-source capital gains, interest, and dividends accrued after the move — a benefit rooted in IRC Section 933's exclusion of PR-source income of bona fide residents from federal tax. Separately, businesses that export services from Puerto Rico can access a flat 4% corporate tax rate under the Export Services chapter. The programme has drawn sustained local political scrutiny over housing costs and perceptions that wealthy newcomers extract disproportionate benefit; this pressure led to a 2022 increase in the mandatory annual charitable-giving requirement and continues to generate periodic legislative proposals to further tighten eligibility or compliance.
Full Puerto Rico Act 60 (Individual Resident Investor & Export Services) profile →Gotchas to Watch For
Panama Friendly Nations Visa
- ⚠August 2021 reform tightened rules — prior version allowed "any professional activity" proof
- ⚠Panama does not allow dual citizenship in most cases — citizenship path means renouncing original
- ⚠Territorial tax only applies to Panama-source income — worldwide income outside Panama remains untaxed locally
- ⚠Bank account opening became harder post-2021 due to global AML scrutiny
Puerto Rico Act 60 (Individual Resident Investor & Export Services)
- ⚠Not actually a 'visa' — no immigration application is required for US citizens; the entire benefit is a Puerto Rico tax-decree programme layered on top of ordinary US citizenship rights
- ⚠Only income/gains accrued AFTER establishing bona fide PR residency and receiving the decree qualify for the 0% rate — built-in gains on assets held before the move generally remain subject to full federal capital gains tax
- ⚠Both the IRS and Puerto Rico's treasury have increased audit scrutiny of 'paper resident' claims — maintaining a mainland home, mainland driver's license, or spending significant time outside PR can disqualify bona fide residency and trigger back taxes and penalties
- ⚠Applies only to PR-SOURCE income; income from a mainland-based business generally remains fully taxable at ordinary federal rates even if the owner personally lives in Puerto Rico
- ⚠Growing local political backlash over housing costs and perceptions of inequitable benefit has led to periodic legislative proposals to tighten or sunset Act 60 incentives — current decree holders have historically been grandfathered under their original terms even when rates for new applicants were revised
Neutral reference — we don't recommend one programme over another. Programmes change: always verify each detail against the official source linked on the individual program pages.