Five years after you get your permanent residency in Panama you can apply for Panamanian citizenship and a Panama passport. To apply, you’ll pay $600, do in interview (in Spanish) to explain why you want to become a Panamanian, then take a history test also in Spanish. Then the President of Panama must sign the authorization. I’ve heard from people who have obtained their Panama citizenship and passport that the whole process can take a year. Panama provides this STUDY GUIDE to help you pass the test.
Panamanian citizens enjoy visa-free access to 118 countries and territories. This article from ANPanama explains why a Panama passport is so great:
(Panama City-ANPanama) The Panamanian passport is the second in Central America that offers more visa-free access to countries in the world, behind that of Costa Rica, according to the Henley Passport Index, the only one endorsed by the International Air Transport Association (IATA).
According to this strict ranking, in Central America the best classified is that of Costa Rica, which gives its citizens access without visa to 150 countries, followed by Panama with 140, El Salvador and Honduras are third with 134, Guatemala fourth with 132; Nicaragua fifth with 128 and Belize sixth with 99 countries.
The Dominican Republic, which is part of the Central American Integration System, appears seventh with access to 64 countries.
Panamanians currently enter 48 countries in Europe, 20 Caribbean islands, 18 American countries, 5 countries in Oceania and the same number in Asia and the Middle East and 3 in Africa without a visa.