Indeed, there is a special temporary residency program that grants a Panamanian passport for five years, which you may renew once for an identical period of time. The main requirement is to maintain a fixed-term deposit in a state-owned bank that pays monthly interest of $850 or more. You won’t need to carry any other passport when traveling, given that the one granted by Panamanian authorities works as a travel document.
How does the Panama travel passport work?
I learned that Panama issues a special kind of passport to foreign investors who deposit $372,100 in the national bank of Panama. Holders of this passport could enjoy visa-free travel to over 128 countries. When I travel with this passport, do I still need to carry the passport issued by the country that I am a citizen of? Would I encounter any issues entering one of the visa-free travel countries of Panama since this passport doesn’t grant me citizenship of Panama?
When you deposit that money you will not get a passport automatically. In fact, after five years of Panama permanent resident status, the applicant may apply for Panama citizenship through the naturalization process (once a Panama citizen, then Panama passport may be obtained). Currently, the Panama self-solvency economic visa offers three different Panama investment options to qualify for Panama residency.
The Panama special travel passport program has existed since the 80s, but little promotion of it has been done. As far as the Panama passport agency goes, no reports of travelers having troubles with it exist. There are also no problems from our own experience, but the passport cannot be used to obtain visas for the countries where one is required. Some European countries though, could question it, as in the 90s many insular countries issued similar passports without proper vetting. The best it is always to check in advance with the consular section of your intended travel country. We always advise carrying your passport of citizenship as well.