Regulatory framework and trends
Trends and developments
Have there been any notable recent trends or developments regarding business related immigration in your jurisdiction, including any government policy initiatives?
In the current month of June 2019, there has been a few new regulations on business immigration, being the most remarkable the new rule for SEM (Multinational Companies Headquarters) visa holders to be eligible to apply for permanent residency after 5 years of holding the temporal SEM visa.
What legislation and regulations govern immigration in your jurisdiction?
Law Decree No. 3 of 2008, General Immigration Law. This law has been modified and expanded by other regulations.
Has your jurisdiction concluded any international agreements affecting immigration (eg, free trade agreements or free movement accords)?
In 2018, Panama established diplomatic relationships with the People’s Republic of China. Currently, Chinese nationals can enter Panama with a multiple entry stamped visa that allows these nationals to stay in the country for 90 days. This policy has made the process for Chinese citizens applying for other visas a more expedite process in comparison to before this new policy. Citizens of most European countries and American countries can enter Panama without a stamped visa.
Which government authorities regulate immigration and what is the extent of their enforcement powers?
The National Immigration Service, which is a direction of the Ministry of Security and in all matters regarding work policies for migrants, the Ministry of Labor
Can the decisions of these authorities be appealed?
Yes, all decisions from the National Immigration Service can be reconsidered first, and then appealed, in which case the Ministry of Security becomes the competent authority to decide.
Recent case law
Has there been any notable recent case law regarding immigration?
In what circumstances is a visa required for business visitors?
If the visitor is a citizen of one of the countries that need a visa to enter the country, a stamped visa will need to be requested at the nearest Consulate of Panama. In cases where the visitor requires stays longer than what their entry visa allows them to stay, they can request a short stay visa for business that will be sponsor by a local company. Recently a new business visitors visa has been implemented. This new visa is exclusively for United States citizens visiting Panama for business reasons. This visa allows the applicant to stay for a year, extendable up to 5 years, in the country for business and investment purposes.
What restrictions are imposed on business visitors in terms of the work that they may undertake and their period of stay in your jurisdiction?
For short term business visitors, they can supervise and direct establishing branches of a company for the duration of the visa, which will be granted for no longer than 9 months. They can’t be employed directly by the Panamanian company, thus must be paid in their respective country of residency.
Application and entry
How are business visitor visas obtained and what is the typical turnaround time?
Short term stay visas have to be requested after entering Panama. The applicant has to enter through a tourism visa and request a change in his immigration status. This visas are requested directly at the National Immigration Services Office. They usually take 1 week on average after submission.
Are any visa waiver or fast-track entry programmes available?
Panama allows visa free entry to citizens of the United States, European Union, most countries in the Americas and some countries in Asia and Africa. Citizens of a restricted nation are allowed visa free entry to the country for 30 days if they have a valid multiple entry visa of the United States of America, Canada, United Kingdom, Schengen, Singapore, Japan, South Korea and Australia with at least one entry.
Fast track entry is allowed previous registration for Panamanian citizens and permanent residents.
What rules and procedures apply for visitors seeking to undertake short-term training in your jurisdiction?
In what circumstances is a transit visa required to pass through your jurisdiction? How is it obtained?
Travelers in transit through Panama are exempted of a visa but they have to stay at the airport and their flight must be within 9 hours or less of arrival. If they need to or want to leave the airport, they must fulfill all the requirements for regular visitors.
What sponsored visas or work permits are available to employers seeking to hire foreign nationals in your jurisdiction? What are the eligibility criteria, application procedures and maximum period of stay for each?
As a general rule in Panama we have a 10% of foreigners' employees rule for ordinary employees, this means that for every 9 Panamanian employees you can have 1 foreign employee. There’s also the 15% rule that states that a company can have a total of 15% foreign employees in technical and managerial positions. The 15% is accounted within the overall total of technical and managerial employees. Both the 10% and the 15% visa are granted for 2 years, and after the 2 years they can request permanency. In Panama, visas and work permits are separate process. The work permits are granted for a year and they must be renewed every year.
Panama also has a technician's visa, for employees needed for technical work. These workers don’t have to obey the percentage rules. This technicians visa is granted for short term periods for up to 1 year with the option of up to five renewals along with the corresponding work permit which must be renewed every 3 months for the duration of the visa.
What sponsored visas or work permits are available to multinational employers seeking to transfer foreign employees to your jurisdiction? What are the eligibility criteria, application procedures and maximum period of stay for each?
Multinational companies have a special regime in Panama that they can apply to. This regime allows immigration benefits to these companies, such as obtaining residency and waiving the work permit for the employee and his family.
This visa is extended every year, and after 5 years being a resident in Panama through this multinational visa, the foreigner can apply to permanent residency, even if has changed companies (multinational or not). This benefit extends to dependents, spouse and permanent partners if sufficient documentation can support the permanency of the partnership.
Do any special rules govern secondments?
Sponsor requirements and considerations
What are the eligibility and procedural requirements for employers to sponsor foreign employees?
The sponsoring company must be a registered and operational company in Panama. The company must submit a sponsorship letter, valid registration certificate along with business license, submission of social security and tax office good standing certification along with the most recent payroll.
What ongoing reporting and record-keeping requirements apply to sponsors?
Sponsor companies have to inform the Ministry of Labor of any change in the working status of the employee. Sponsor companies are responsible of keeping their employee’s work permits valid.
In what circumstances (if any) must the employer submit to resident labor market testing before hiring or transferring foreign employees? Do any exemptions apply?
Are there any annual quota limits or restrictions on certain positions that can be filled by foreign nationals?
For some working visas companies have to respect the 10% and 15% rule. See above
Are there any immigration exemptions or other special schemes for shortage occupations in your jurisdiction?
How long does it typically take to obtain a sponsored visa? Is expedited visa processing available?
On average can take around 4 months with the exception of the technician's visa, which takes on average a month or less.
What rules govern the hiring of foreign third-party contractors?
Currently our legislation doesn’t allow any company non registered in Panama to conduct hiring in the country. Third parties local HR companies could assist in this case sponsoring the employee.
What are the penalties for sponsor non-compliance with the relevant immigration laws and regulations?
Monetary penalties that start from $500 all the way up to $10,000 for each employee without the pertinent work permit. For recurrent noncompliance, other penalties as business closure may be applied
Are there any other special considerations for sponsors in your jurisdiction?
General employee requirements
Must sponsored employees meet any language requirements?
Are sponsored employees subject to any medical checks?
Yes, as a requirement for the visa they must submit a health certificate issued by a local doctor.
Must sponsored employees meet any medical or other insurance requirements?
Are sponsored employees subject to any security or background checks?
Yes, it is a requirement for all temporary and permanent visas to submit the applicant’s clean background check properly apostilled or legalized by the Panamanian embassy in the respective country
Are sponsored employees subject to any restrictions on studying or working second or volunteer jobs?
Sponsored work permits are valid only to work for the sponsor company.
Are there any rules or standards governing the equivalence of sponsored employees’ foreign qualifications?
In Panama all professions that require professional suitability are restricted for Panamanian citizens. Qualifications such as technicians certificates for specialties are valid to require a technicians visa and practice said job for the duration of the work contract (no more than a year), and most foreign professionals can assist as advisors and consultants, but won’t be allowed to practice said restricted professions per se, and won’t be allowed to sign documentation that requires signature from a suitable professional.
What are the penalties for employee non-compliance with the relevant immigration laws and regulations?
Monetary penalties starting from $1,000 all the way up to $5,000 and for persistent offenders cancellation of the visa and deportation.
Highly skilled individuals
What unsponsored immigration routes are available for highly skilled foreign nationals to seek employment in your jurisdiction? What are the eligibility criteria, application procedures and maximum period of stay for each?
Panama has a visa for Foreign Professionals. Foreign nationals with an undergraduate degree or superior education can apply for this visa and work permit. Diplomas eligible to fall under this category can’t be covered under the restricted for Panamanian citizens professions. The immigration visa is granted for a two-year period with access to request permanent residence after said period of time. The work permit can be requested once the two-year period visa is granted. Work permits are valid for one year and must be renewed every year.
What unsponsored immigration routes are available for entrepreneurs seeking to establish a business in your jurisdiction? What are the eligibility criteria, application procedures and maximum period of stay for each?
Entrepreneurs can apply for the Business Investor Visa, which requires a $160,000 US investment in a local business that creates at least 5 jobs for Panamanians. This option grants Permanent Residency within a total timeframe of 3 years.
What unsponsored immigration routes are available for foreign investors seeking to invest in your jurisdiction?What are the eligibility criteria, application procedures and maximum period of stay for each?
Investors can apply for the Self-Solvency Visa, which requires a $300,000 US investment in local real estate and/or a bank certified deposit for 3 years. This option grants Permanent Residency within a total timeframe of 3 years.
Other investors visa applies, without a minimum investment amount, but the investor can't have the intention to settle residency in the country, and only applies for a short stay of maximum 5 years.
Are any immigration routes open to foreign nationals based on ancestry or descent?
Yes, foreign nationals with Panamanian children over the age of five can apply for a visa. This visa allows the applicant to request a work permit once the visa is approved. The visa will be granted for a two-year period and after this two year the applicant can request permanent residency. The work permit is granted for one year and must be renewed every year. Children of Panamanian citizens can apply for Panamanian citizenship.
Are there any other unsponsored immigration routes?
Friendly Nations visa. Panama grants permanent residence visa to nationals of a list of countries. Once this visa is approved, the applicant can apply for the pertinent work permit. The work permit will be granted for 3 years and must be renewed for equal amount of time.
Extensions, permanent residence and citizenship
Extensions and status changes
Can short-term visa or work permit holders switch to long-term visas? If so, what conditions and procedures apply?
Yes, they have to be eligible for any of the other visas and must resign their current visa and start the new process from the beginning.
Under what conditions can long-term visas be extended?
Only long-term visas that grant renewal can be renewed. For some visas this renewal will grant permanent residency.
Can long-term visa holders apply for permanent residence? If so, what conditions and procedures apply?
Only visas that allows this. Some of them are the 10% and 15% visa, the professionals visa, married with Panamanian visa, parent of Panamanian children, multinational employee, aviation company employee visa, reforestation investor visa and other are eligible for permanent residence.
Can long-term visa holders or permanent residents apply for citizenship? If so, what conditions and procedures apply?
Visa holders with permanent residency status can apply for citizenship as a general rule 5 years after their permanency status was granted. Citizens of some countries can apply in a shorter period of time due to the reciprocity principle that Panama acknowledges, such as Colombia and El Salvador (1 year), and Argentina, Ecuador, Spain, Honduras, Mexico, Nicaragua and Peru (2 years).
Who qualifies as a dependent for immigration purposes?
Spouses, underage children, children under 25 if studying and unmarried and parents. For the multinational employee visa, permanent partners apply as well.
Conditions and restrictions
What conditions and restrictions apply to bringing dependents to your jurisdiction (including with respect to access to labor markets, education and public benefits)?
Dependents aren’t granted access to a work permit. They will have to become permanent residents and then apply for a sponsored work permit. New legislation has come in place, and as of June, 2019, permanent residents can apply to an unsponsored work permit valid for 3 years and renewable for the same amount indefinitely.