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PANAMA – Major Work Permit Changes
March 24, 2023
A New Decree “Decreto Ejecutivo No. 42″ took effect in Panama on 02 March with the goal of:
- Amending all the work permit categories, and;
- Bringing consistency across all the different work permit categories by establishing common requirements to all of them.
MAIN AMENDMENTS PER IMMIGRATION CATEGORY
The Work Permit for Permanent Residences is scrapped. Instead, permanent residents will be able to work under different work permit categories on their permanent residence status.
Quota for foreign workers versus local employees
- 15% Specialized and Technician employees, will be required to prove knowledge transfer and training of national workforce.
- Small companies (MIPE) (prior Marrakech Agreement) will be able to have up to 8 local employees and one MIPE employee, which would be the only foreign national allowed in the company.
- Position of Trusts working on transactions not affecting Panama but taking place abroad will now need to prove that their incomes come from foreign source in order to obtain an extension.
Work Permit Categories based on Special Laws (Leyes Especiales)
The main changes affecting SEM and EMMA personnel include:
- New Permits for position of trusts for Permanent Positions of Managers mid-senior level for both SEM and EMMA companies are required.
- Dependents of SEM and EMMA personnel will only be able to obtain work permits subject to the authorised quota.
Permits Under Special Conditions (Friendly Nations Permits, Foreign Professional, Extraordinary Regularization, Students, and family reunion)
- These permits will be subject to quota/employment restrictions
- These permit holders can apply to either a self-employed option or work for an employer option.
- Student visa holders will be able to apply for a work permit.
Temporary Permits (artists, sportspersons, short term technicians)
- Short term technicians would require to apply for another work permit category (i.e.10% or 15% permit)
- managing positions staying for a maximum of 15 days without receiving local income in Panama must inform of their stay to MITRADEL through their appointed lawyer.
COMMON REQUIREMENTS TO ALL WORK PERMIT CATEGORIES
Processing time to resolve work permit applications
- Increases from 30 to 40 working days
Reconsideration
- Reconsideration can be submitted within 5 working days from the notification (increases from 2 working days). Proof of evidence to be submitted within 15 days of the reconsideration submission
Qualified Accountant Certification
- Companies with more than 20 employees will be required to file a qualified accountant certification with the payroll’s information (prior only for companies with 100 or more employees).
Extensions and Validity
- Extensions can be submitted within 60 natural days before the expiration of the permit (increases from 30 working days of permit expiration).
- Residence cards (carne) government fees will be established by Ministerial Decree.
Work Permit Cancellation.
- Reasons for cancellations are established.
Infringements, penalties and fines.
- If the extension of the work permit has been submitted before the end of validity of the initial permit, employers would not be fined.
Increase of Percentage of Specialists and Technicians
- It could be possible to apply for an exemption to the quota restrictions to hire specialists and technicians under certain conditions, provided the local labor market is not disturbed. MITRADEL will be able to issue an exemption approval per employer or per sector.
NEWLAND CHASE RECOMMENDATIONS
Please note that we are still waiting for further official processing guidance to be issued by MITRADEL in relation to each work permit category. Please contact Newland Chase should you require additional details.
