Panama’s immigration policy, as established by the executive branch, is designed to attract foreign investment, promote economic growth and encourage the influx of skilled workers who can contribute to the country’s development. The Ministry of Public Security, specifically the Immigration Authority (Servicio Nacional de Migración or SNM), is responsible for administering, supervising, controlling and executing these policies. In addition to the Ministry of Public Security, other government entities such as the Ministry of Labour, Ministry of Commerce, Ministry of Foreign Affairs and the Ministry of the Presidency also contribute to and recommend immigration policies related to commerce, trade, investment and employment.
The immigration policy is designed to create special categories that align with the diplomatic, investment and economic goals of the executive branch, thereby facilitating the entrance and residency of foreign investors and individuals possessing specific skills needed in the country.
Panama’s immigration law dates back to 2008, however, new categories of residence permits have been added in accordance with the immigration policy of the executive branch. In recent years, categories such as the Qualified Investor residence permit, and the Remote Worker visa, have been introduced.
The Qualified Investor residence permit offers a fast track to permanent residency in Panama for foreigners that invest USD300,000 in real estate, USD500,000 in stocks, or USD750,000 in fixed-term deposits. In October 2024, the investment required under the real estate option will increase to USD500,000, with the aim of attracting high net worth individuals seeking fast-track permanent residency. The Remote Worker visa allows foreigners to reside in Panama while working remotely.
Panama’s labour immigration rules are based on the Labour Code and the new Executive Decree No 6 of April 2023 (the “Labour Immigration Decree”). This decree, which came into effect in May 2023, has introduced significant changes in relation to work permits, including:
The main sponsor-based employment options in Panama are:
The main unsponsored work visas in Panama are:
The main unsponsored investment visas in Panama are:
The Immigration Law and Resolution 22068 of 2021 from the SNM establishes certain limitations on what visitors or tourists can do in Panama, including engaging in activities such as recreation, shopping, business, medical tourism, visiting, or similar purposes.
Additionally, tourists must (i) enter the country on an occasional basis, without the intention of establishing residency, or abandoning their country of residence; (ii) have the financial means to support themselves during their stay in the country; and (iii) comply with the requirement to leave the country upon the expiration of their authorised stay period.
There are certain restrictions for visitors from some nationalities (without a visa exemption agreement) that require an entry visa before travelling, such as Venezuela, Cuba, China, India, and many other Asian and African nations. There are exceptions to this requirement for individuals who possess a tourist visa or residency from certain countries, including the United States, Canada, United Kingdom, Singapore, South Korea, Australia, the Schengen territory and Japan. These exceptions require that the visa (i) has been previously used to enter the issuing country; (ii) is valid for at least six months; and (iii) is issued for multiple entries and exits.
Once in the country, foreigners can stay as tourists depending on their nationality:
Panama has recently established a Short-Stay Visa for Remote Workers by means of the Executive Decree No 198 dated 7 May 2021. This visa allows a stay in Panama for nine months, renewable for an equal term. Recipients are authorised to work in Panama without the need for a separate work permit or additional processes. This visa permits individuals to carry out remote work activities while in Panama, providing flexibility and convenience for those who can work remotely.
To qualify for this type of visa, applicants must meet the following requirements:
Visa holders are prohibited from providing services or representing their foreign company for activities within Panama.
In Panama, there are no specific language requirements for obtaining a visa. Nevertheless, in certain cases where a face-to-face interview is required, such as the category of Married to a Panamanian, applicants who are not fluent in Spanish must have an authorised public interpreter present during the interview.
When submitting documents for a visa application, the Immigration Law stipulates that if the documents are issued in a language other than Spanish, they must be translated by an authorised public translator in Panama.
Medical certificates are a requirement for all visa applications as provided by Panama’s Immigration Law. This certificate must be issued by a qualified Panamanian doctor, within three months prior to filing the application. Nevertheless, no proof of vaccinations must be provided when applying for a visa.
Sponsor-based employment visas in Panama require the following minimum thresholds to be met, including:
In addition to what is established by the Immigration Law, it is important to take into consideration the legal minimum salary, which is reviewed by the executive branch every two years, in accordance with the activity and region.
The following are considered as local labour:
Nonetheless, exemptions to the 10% or 15% quotas apply to certain categories including: (i) micro or small employers; (ii) executives hired by international corporations whose duties take effect abroad; (iii) executives from the Colon Free Zone; (iv) SEM and EMMA visas; (iv) City of Knowledge Foundation; and (v) temporary technicians.
For an employment-based visa, the foreign worker must have a work contract with a Panamanian company. As a result, the visa and work permit will be tied to a specific employer. If the foreign worker ceases to work for that company, the latter must communicate it to the SNM and the Ministry of Labour, to request the cancellation of the residence and work permit.
Other limitations apply depending on the situation:
Visa processing times vary depending on the specific immigration category being applied for.
Some of these processing times for visas and residence permits are as follows:
Exceptions to these processing times include (i) the Qualified Investor residence permit, which takes up to 30 working days to be processed; and (ii) visas for labour reasons, which can take up to nine months, depending on the approval of the work permit.
Work Permits
As for work permits, the processing time is generally around four months. Nevertheless, it is important to note that work permits for labour reasons, which require a quota analysis, can take up to five months to be processed.
These estimated processing times can vary depending on individual circumstances, the workload of the immigration authorities, the visa/permit category, and any additional requirements or factors specific to each case.
As a general rule, visa applications in Panama are filed after foreigners arrive in the country. Once the application is submitted, the SNM grants foreigners a temporary identification card that is valid for six months. This card (i) includes an authorisation to travel in an out of the country multiple times during that period; and (ii) proves the application is in process while they process the application.
Nevertheless, for certain special immigration categories, the application process can be initiated prior to the arrival of foreigner’s arrival in Panama. In such cases, individuals may only travel to Panama once they have obtained proof of filing their application.
It is important to note that entry travel restrictions apply to nationals from countries that are not visa exempt, which need to obtain a Stamped Tourist Visa, that can be requested either: (i) directly by the foreigner before the Panamanian Consulate, in their country of origin or residence; or (ii) in Panama, through a legal proxy.
In general, immigration categories in Panama follow standard processing times and cannot be expedited or fast tracked. However, there is an exception for the Qualified Investor category, where applications are processed within a maximum of 30 working days. This fast-track processing time comes with higher fees.
In general, Panama visa applications are filed once foreigners enter the country. This means they first enter as tourists and later change their immigration status. The process of changing their immigration status commences with the submission of an application.
In most case, these applications must be submitted by an attorney on behalf of the foreigner, as the requirements vary depending on the immigration category, the individual’s nationality, and purpose of their visit.
Visa processing generally involves the following steps:
The typical cost of a sponsored employment visa in Panama varies depending on the type of visa. Even so, all these visas have common fees such as:
The fees associated with sponsored employment visas typically range from USD500 to USD2,000.
Legal fees for handling the visa application process are typically established by each attorney based on a minimum tariff set by law for legal services.
The costs associated with obtaining an sponsored employment visa in Panama are typically the responsibility of the employer. As an exception, when applying for non-sponsored visas, individuals cover these costs. However, the answer often depends on other matters, including the specific immigration process, the visa type, and the specific expense.
In Panama, immigration and labour immigration authorities may take enforcement actions against an individual and/or a sponsor under various circumstances. The causes for enforcement actions are exhaustively listed in Panama’s regulations and can vary based on the nature of the violation.
The most common circumstances are as follows:
It is also important to take into consideration that if an individual enters Panama without a valid visa or other authorised means of entry, they may be subject to deportation. In addition, an individual who has been deported or otherwise penalised for violating immigration laws may be (i) banned from entering Panama; and (ii) become ineligible for subsequent visas or immigration benefits.
In Panama, some obligations an employer might have when sponsoring an employment-based visa include:
Regarding penalties for non-compliance, authorities in Panama may impose fines, revoke visas, or take other enforcement actions against employers who fail to meet their obligations or violate immigration laws, including the possibility of cancelling their commercial licenses.
Panama does not have a specific Right to Work check process, as in other jurisdictions. Nonetheless, employers do have to verify some elements prior to hiring a foreigner. This review includes eligibility of foreigners to legally work in the country and to hold a valid work permit (for unsponsored categories) or to obtain a work permit (for sponsored-based categories). Concurrently, employers must verify specific conditions to be met, such as: nationalities and entry visas; position and salary; restricted professions; and quotas.
Panama offers a variety of visas, including dependant visas, which allow family members of visa or residence permits holders to accompany or join them in the country.
Family relationships recognised for the purposes of a dependant visa may vary depending on the visa category and the regulations in place. Generally, dependant visas may be available for the following family members:
It is important to note that each visa category has specific requirements, such as financial criteria or proof of relationship, and there may be additional eligibility criteria for dependant visas. The application process for a residence permit for dependants in Panama is similar to the application process for main applicants.
In Panama, Dependant visas do not grant visa holders the right to work. For this reason, a separate work permit must be requested based on their residency status:
The introduction of the Family Reunification work permit for dependants is a significant change introduced by the Labour Immigration Decree, as previously dependants were only allowed to apply for a work permit after obtaining permanent residency or when renouncing their Dependant status and applying afresh.
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Panama City
Panama
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customerservice@morimor.com www.morimor.comPreliminary Considerations
Like much of the world, Panama’s economy took a hit due to the COVID-19 pandemic, leading to a significant reduction in foreign investment and personnel, particularly in 2020 when stringent measures were implemented by the Panamanian government to curb the virus’s spread. However, despite a contraction of GDP during the pandemic, there has been consistent growth in the past few years, averaging 5.0%. This positions Panama as one of the fastest-growing economies in Latin America.
In 2023, Panama has seen a substantial surge in immigration, surpassing even pre-pandemic levels. This surge can be attributed to Panama’s favourable geographical location, as well as its economic and political stability. These factors have solidified its position as a prime destination in the region for investors, skilled workers, and retirees.
Panama has become an attractive choice for foreign executives and skilled professionals, thanks to the presence of numerous multinational corporations that have established their headquarters in the country. Moreover, there are numerous infrastructure projects, including one of the world’s largest open-pit copper mines, expansion of the Metro System, Panama-Arraijan Highway and Tocumen Airport, in addition to the existing Panama Canal, the Port and Airport Hub, and the Colon Free Zone.
World Bank data suggests that Panama’s economic growth is projected at 5.7% for 2023 and 5.8% for 2024, while the fiscal deficit is projected at 3.0% of GDP for 2023 and 2.0% of GDP for 2024. Growth is expected to be driven by the services sector, particularly wholesale and retail trade and transportation, but also by construction, manufacturing and mining. As Panama ventures into new industries, it continues to attract foreign personnel to participate in these projects and support their development.
Recent Trends and Developments
In recent years, several new laws have been enacted in Panama with the aim of improving the business climate and attracting foreign investors, particularly those seeking a second residency due to political, social and tax changes in their countries, mainly in the region. Notable changes include the introduction of the qualified investors visa, short-stay visas for digital nomads, and the implementation of technology to streamline processes in Panama.
Measures due to the COVID-19 Pandemic
In response to the global pandemic, Panama declared a State of National Emergency in March 2020, which led to the implementation of various initial measures, including the temporary suspension of international flights and mobility restrictions. Gradually, these measures were lifted, allowing for the resumption of international flights with certain sanitary requirements for travellers, such as COVID-19 tests, mandatory vaccinations and quarantine. Currently, Panama has lifted all sanitary measures related to the pandemic, so there is no requirement for proof of vaccination, tests, or quarantine for travellers.
Extension of visas and residence permits
The Immigration Authority (Servicio Nacional de Migración or SNM) recognised the validity of residence permits that expired between 13 March 2020 and 30 June 2021, through resolutions. During this period, fines for exceeding tourist stay and expired residence permits were waived.
In addition, in May 2023 the SNM set a new deadline of 31 December 2023 to receive renewal applications of residence permits that expired after 13 March 2020. This measure allows renewal applications for Temporary and Provisional Residence Permits, Permanent Residencies, and Domestic Workers Visas to be filed beyond the mandatory six-month limit after expiration, therefore allowing renewals that would otherwise be banned under immigration regulations, by only paying the corresponding fines after 1 July 2021, since the SNM exempted the payment of fines from the period from 13 March 2020 to 30 June 2021.
Extension of work permits
Labour Immigration Authorities recognised the validity of work permits that expired between 12 March 2020 and 30 April 2021, by means of several resolutions. During this period, fines for employers with foreign workers without a valid work authorisation were waived. However, from 1 June 2021, this extension is no longer in effect.
Reduction of the stay period
The SNM has also reduced the period of stay for foreigners in the country from the regular 180 days applicable to those foreigners that do not require an entry visa or that are from a country with a visa exemption agreement (most of the countries in the Americas and Europe), to a general three-month stay period. This rule does not apply to:
Current outlook of SEM and EMMA executives
The number of SEM (Multinational Headquarters) and EMMA (Multinational Headquarters for Manufacturing) licensed companies has increased in 2023, leading to a rise in the number of executives due to the beneficial labour, immigration and tax incentives granted in those special regimes. As of May 2023, there were 189 companies included in the list of SEM license holders, and as of December 2022, the new EMMA regime included 3 companies. This trend is expected to continue, with an increase in foreign executives under these special regimes expected throughout 2023 and the coming years.
Additionally, recent changes in the law allow dependants of SEM and EMMA executives to apply for work permits from the list of options stated in the new Executive Decree No 6 of April 2023 (the “Labour Immigration Decree”), without having to renounce their dependant status and file a new application based on employment, as was previously required. Consequently, this simplifies immigration and labour regulations not only for foreign executives but also for their families.
Recent shifts in the friendly nations category
The Friendly Nations category, one of the main categories for foreign nationals applying for residency in Panama, has undergone multiple modifications in recent years, including changes to residence permit and work permit requirements and processes. Some of these changes are outlined below.
Increased residency processing times and requirements
Initially, the Friendly Nations residence permit had straightforward requirements, such as being a shareholder of a Panamanian corporation and having a local bank account bank with a four-figure minimum balance. However, in 2019 these requirements became more specific for investment purposes, requiring a USD200,00 investment in real estate or fixed-term deposits. For employment-based applications, both the previous and recent versions maintained the option of been hired by a local company as the main requirement.
Additionally, the residency process changed from a single-stage process, granting permanent residency in approximately five months, to a longer two-stage process, granting residency in approximately 3.5 years.
Modification to the list of countries
In 2021, Peru was included in the list of countries considered as Friendly Nations to promote the influx of Peruvians nationals. On the other hand, Taiwan was excluded from the list in the same year, in line with immigration, diplomatic relations and international policies implemented by the executive branch.
Division of the work permit based on purposes
The Friendly Nations work permit was modified to be based on either (i) investment, or (ii) employment, whether self-employed or hired by an employer, as established by 2023’s Labour Immigration Decree. Previously, there was a single work permit option available for both investors and workers.
Reduction of validity period of work permit
Initially, in 2012 the Friendly Nations work permit was granted for an indefinite term. Later, in 2019 it changed to a three-year initial term, renewable for the same term. In April 2023, the validity of the work permit was further reduced to (i) a two-year term and three-year renewal for those applying through investment or employment with an employer, and (ii) a two-year initial term, renewable for the same term, for work permits based on self-employment.
Shifts in quota counting
Previously, those with Friendly Nation work permits for an indefinite term were considered as local labour according to the Ministry of Labour’s criteria. The current Labour Immigration Decree now formally includes this criterion, reducing potential legal ambiguities and guarding against modifications that could adversely impact foreign workers and companies.
As for new applications, those applying through investment are excluded from company quotas, while those working for an employer are included in the quotas.
Considering the above, it can be inferred that the Panamanian authorities have been imposing limitations on this category for residency purposes but have simplified the work permit process and requirements for foreign investors intending to work in Panama rather than for foreigners who have a work status or residency within this category.
New Qualified Investor’s category
The Qualified Investor’s residence permit, introduced in 2020 as a fast-track permanent residency option for high net worth individuals, has become the main investment category promoted by the Panamanian executive branch to stimulate the economy. Applications for this permit are processed within 30 working days and handled by a special office at the Ministry of Commerce. According to public data, this programme has brought in investments of over USD55,000 million into the country as of August 2022.
To obtain this permanent residency, applicants must make an investment of either (i) USD300,000 in real estate; (ii) USD500,000 in stocks; or (iii) USD750,000 in fixed-term deposits. From October 2024, the investment amount for the real estate option will increase by USD200,000 to USD500,000. This modification, initially slated to take effect in October 2022, has been delayed until October 2024 to incentivise real estate investment over the other options in this category.
Remote workers (digital nomads)
In response to the new and changing global work landscape, Panama established a Short-Stay Visa for Remote Workers on 7 May 2021. This visa allows remote workers to stay in Panama for a period of nine months, renewable for an additional term. No separate work permit or additional process is required for remote workers to work in Panama under this visa.
To be eligible for this visa, applicants must meet the following requirements:
However, this visa does not extend to dependants, unlike similar provisions in other jurisdictions, which may dissuade families from moving to Panama under this category.
Short-stay visas for citizens of the United States of America
In 2019, a Short-Stay Visa for US nationals was introduced to attract American applicants planning a short-term stay in Panama for purposes such as: (i) studies; (ii) investment; (iii) temporary and/or technical work; or (iv) labour transfer. This visa is granted for a one-year term, renewed annually up to five times.
One notable feature of this visa is that applicants are allowed to include their dependants, which sets it apart from other short-stay visas that do not provide this benefit. Additionally, the government fees associated with this visa are lower compared to similar visa categories. By introducing this visa, Panamanian authorities aim to simplify and promote temporary residency for US citizens in Panama.
New work permit regulation
The new Labour Immigration Decree, effective from May 2023, introduced significant changes to the hiring of foreign workers in Panama. It restricted the main unsponsored and popular work permit categories, and established new work permit options for investors, dependants and students. The key provisions of the decree are outlined below.
Elimination of the permanent resident work permit
The decree abolished the Permanent Resident work permit option, allowing only for extensions to those who were granted this permit before the decree came into effect. This work permit allowed all permanent residents, regardless of their immigration category, to apply for a work permit that was exempted from quota counting, according to the criteria of the Ministry of Labour. In contrast, permanent residents will now have to apply for the work permits established in the decree, many of which are subject to company quotas. This change restricts the hiring of foreign workers, especially in main categories, due to the quota limitations in many operating companies in Panama.
Establishment of a new work permit classification based on special, economic and investment policies
The decree also added a new work permit classification based on special, economic and investment policies. It includes different work permit options such as the work permit for (i) Friendly Nations based on investment; (ii) Qualified Investor’s permit; and (iii) Self-Economic Solvency permit. All work permits within this new classification are exempt from company quotas, making it easier for investors intending to work in Panama.
Inclusion of work permits for dependants
Previously, dependants could only work if they had permanent residency and applied for a Permanent Resident work permit. However, with the elimination of the Permanent Resident work permit, a new category of Work Permit for Dependants was established. This category allows dependants to work even with provisional status. Nonetheless, this work permit is subject to company quotas, therefore, only companies with sufficient quota availability will be able to hire dependants under this category.
Work permit for students
Foreigners with a student visa were traditionally not allowed to work in Panama due to limitations set by immigration regulations. However, the Labour Immigration Decree introduced a new work permit category specifically for students, allowing them to work. Similar to the Work Permit for Dependants, this work permit is subject to company quotas, therefore companies must have the necessary quota availability to hire students under this category.
Implementation of new terms and process rules
The decree extended the timeframe for authorities to process work permit applications from the usual 30 working days to 40 working days, despite the decree’s intention to incorporate new technology for online applications and the associated rise in costs for most work permit applications. This delay could potentially impact companies and foreign workers.
In contrast, the timeframe to file a reconsideration petition increased from the usual two working days to five working days after notification, giving companies and foreign workers more time to gather evidence in case of a denied work permit application.
Introduction of transfer of knowledge rules for experts and technicians
The decree stipulated that 15% Technicians and Specialised Personnel work permit applications must include in their renewal a report stating the transfer of knowledge and training to Panamanian personnel. This transfer can be demonstrated through (i) technical learning centres within the employer’s facilities; (ii) adaptation of training programmes with universities or educational centres; or (iii) evidence of a field training centre.
These provisions aim to increase the transfer or knowledge to Panamanians but may limit the hiring of experts and technicians for companies that cannot fulfil these transfer of knowledge requirements.
Electronic platforms and digital access
Currently, residence and work permit processes in Panama still require physical filing before the competent authorities, with applicants only gaining online access to their applicants after submission. However, the Immigration Law and the Labour Immigration Decree do provide for the use of technology in the application process, and authorities have announced upcoming projects for online filing.
During recent years, Panama has made efforts to digitalise various immigration-related petitions available through an online platform including: (i) passports registrations; (ii) Immigration Status Certifications; (iii) certain visas; and (iv) traveling authorisations for minors. It is worth noting that some of these online options stopped functioning, requiring applicants to reapply by physically submitting their documents. As for work permit processes, the Labour Immigration Decree stipulated those online processes will have the same legal validity and recognition as those conducted in person.
The correct implementation of digital platforms will greatly enhance accessibility for foreigners who wish to reside and work in Panama. In general, the use of electronic platforms, when in place, will make processes more accessible, ultimately benefiting all parties involved.
Final Considerations
In conclusion, several infrastructure projects will require an increase in the hiring of experts and technicians to address the lack of skilled personnel in these fields within the country. Also, upcoming presidential elections in May 2024 are likely to shape new immigration and labour immigration policies and regulations. However, considering Panama’s economic recovery, particularly after the pandemic, the ongoing public and private infrastructure projects, the increasing trend of foreign direct investment and GDP growth, and the benefits offered by certain residency and work permit categories, especially those aimed at boosting the real estate sector, it is expected that the influx of foreign workers and investors will continue to increase within the coming year.
Paseo del Mar Ave
23rd Floor
MMG Tower
Costa del Este
Panama City
Panama
+507 2657 777
customerservice@morimor.com www.morimor.com