The concept of residency is defined by Panamanian law in Law 33
of June 30 2010, as amended by Law 52 of August 28 2012. The
necessity for such a definition arises principally from the
signing of conventions for the avoidance of double taxation
(DTCs) by the Republic of Panama, and to assist its national
strategy regarding the development of international services.
In particular, Article 762-N of the Panamanian Tax Code
establishes that tax residents are those individuals who remain
on Panamanian territory for more than 183 days, or who have
established their permanent homes in the country. Furthermore,
legal entities constituted in accordance with Panamanian laws,
or constituted as foreign entities registered with Panama's
Public Registry, which have their place of effective management
in the Republic of Panama, are also considered tax
In order to qualify for the benefits set forth in a DTC,
there is typically the prerequisite that a Certificate of
Residence is obtained.
In Panama, Certificates of Residence are issued by the
Department of International Taxation, a division of the
Republic of Panama's Tax Authority.
It should be noted that at present the Department of
International Taxation has the power to issue additional
Certificates of Residence as proof of the legal and fiscal
relationship an entity has with the Republic of Panama; this
power may be used even in the absence of a DTC.
Finally, it is important to recognise that whenever a person
requires a Certificate of Residence issued by the Panamanian
Tax Authority, the request must contain sufficient proof that
the applicant is indeed a resident of the Republic of Panama.
Such proof must adhere to the criteria mentioned above.
Anna Cristina Valdes