Panama Reforestation Visa
The Panama Reforestation Visa
Panama has a unique eco-friendly immigration visa program which allows foreigners to invest in government certified reforestation projects in return for a permanent residency visa. In addition, these reforestation investments have provided good returns.
In order to qualify for a Panama immigration permanent residency visa the foreigner must invest a minimum of $80,000 USD in a reforestation project with is certified by the Panama government. There are several such projects to choose from around Panama where most of them are foreign owned mainly from Europe. The $80,000 USD investment goes towards purchasing a minimum of 5 hectares of forest land. Besides making the investment in one’s own name, there is an option to make the investment using a Panama legal entity.
An additional $2,000 USD investment is required for every dependent that will be included with the visa application.
Benefits of a Panama Reforestation Visa
Panama immigration provides permanent residency for the applicant and dependents which can lead to full Panama citizenship with a Panama passport.
Panama law requires that a foreigner must be a permanent resident for at least 5 years before qualifying to apply for citizenship.
Reforestation Investment Can Be Very Profitable
All around the world tropical rainforests are been cut down for their timber making them increasingly rare nearing extinction. The prices for many of these woods are rising as demand increases and their supply dwindles.
A Panama reforestation investment provides a perfect opportunity to help the environment by reducing rainforest losses. Reforestation involves planting new trees to replace the ones cut down for lumber. Rainforests are a natural habitat for wildlife, plants, climate preservation, air purification, and replenishing worldwide water resources. It is better for the environment to source lumber from sustainable reforestation projects and not from rain forests.
This is truly a “Green Investment” where investing in environmental cleanup or alternative clean energy helps reduce pollution and costs of energy. Panama’s immigration reforestation visa is often called “Panama’s Green Investment Visa”.
The Panama reforestation projects plant new trees, cultivate them, trim them every few years, harvest them in 15 to 20 years, and replant more trees in their place.
Panama offers mahogany and teak reforestation investments. Teak is more popular because of its resistance to decay, resiliency to weather, and repels insects. Teak is more often used for outdoor and indoor furniture and decking for vessels. Teak is also elastic with a solid fiber making it perfect for wood crafting products.
Panama teak reforestation is profitable. Although it will take up to 20 years for a teak tree to mature, a thinning of the trees every 6, 12, and 16 years produces lumber to sell. Teak market prices have been rising at a 2% annual average. An $80,000 USD investment can produce a 2% annual return totaling $370,586 in 20 years. This amounts to a 460% return averaging over the 20 year cycle to an annual 23% return. This is better than a Standard & Poor’s S&P 500 index which averaged 7.33% yearly between 1990 and 2008.
Teak has always been in high demand as its supply globally diminishes. A United Nations Report stated that about 28 million acres of rainforests are destroyed every year. This is the size of Ohio State. Malaysia, India, and the Philippines have virtually over logged their teak forests making them nearly extinct. Teak logging has dramatically increased in South America. While teak is not a natural Panama hardwood, it was imported in the early 1900’s and has grown very well under Panama’s climate.
The 2006 International Teak Market Report declared that teak log prices increased a yearly average of 8.3% during the past 30 years. Because of the rapid decline in teak supply the teak log prices rose 15% from 2005 to 2006.
You don’t have to become a farmer to invest in Panama reforestation programs. The companies who are government certified will sell you the required minimum hectares and do the maintenance during the full life of the investment. This involves thinning and selling the thinned lumber, harvesting upon maturity and selling the teak at market value.
This is a truly “Green” investment with benefits.
Applying for Panama Immigration Permanent Residency
An explanation of the documents required by Panama immigration when applying for permanent residency can be found Here
In addition to the usual required documents for application to Panama immigration to become a permanent resident, here are the documents required for the Panama Reforestation Visa:
Note: If you use our law firm, we will be able to provide these documents for you.
1. If you will be using a legal entity like a Panama Corporation to purchase the reforestation property then a sworn affidavit from the treasurer or secretary (other than the applicant) verifying the ownership and shares held by the applicant along with the total capital stocks.
2. Panama Public Accountant (CPA) certification detailing the total amount invested in the Panama reforestation project by the applicant. The accountant must submit documents supporting this.
3. Certificate authenticating shares owned by the applicant.
4. Copy of official tax returns showing the invested capital. If the first tax year has not ended yet, then a copy of the certificate of the corporation’s tax ID (RUC) must be submitted.
5. Copy of the National Environmental Authority (ANAM) resolution certifying the reforestation project.
6. Copy of the Panama Public Registry certificate of the business (corporation) and the property’s title.
7. Proof of the direct investment of a minimum of $80,000 USD in the reforestation project. Acceptable documents include:
(a) Audited Finance Statement;
(b) Bank certification that funds were transferred or payment was made (required);
(c) Documents that merchandise was imported;
(d) Receipts for purchase and sale.
Extension of Reforestation Visa
Requesting an extension of the Panama Reforestation Visa requires submitting the following documents.
1. Certification of Incumbency (Paz y Salvo) for the applicant;
2. Proof of disbursements from the reforestation project during the past year or proof that the reforestation company is providing maintenance and that their contract remains in force.