Foreigners with nationalities that require an entry visa may enter Panama with visas from Korea, Japan or Singapore
Executive Decree No. 521 of August 6th, 2018
As of August 8th, 2018, foreigners of nationalities that require a visa to enter the Republic of Panama may enter with a Schengen Visa or current Residency from Korea, Japan or Singapore.
- By means of Executive Decree No. 521 of April 6th, 2018, any foreigner who requires a visa to enter the national territory, holding a Visa or valid residency in Korea, Japan or Singapore, may enter Panama, as a tourist, without an entry visa.
- The Visa must: (i) be granted for multiple entries and exits; (ii) be used at least once to enter the territory of the granting State; and (iii) have a validity of at least six (6) months.
- This Executive Decree became effective as of August 8th, 2018.
Aspects to be considered:
- This Decree includes Korea, Japan and Singapore within the list of exceptions. Previously, the list only included the United States of America, Canada, Australia or the United Kingdom, and those holding a Schengen Visa from the European Union.
With this Executive Decree it is provided that the validity of the visa or residency of the above mentioned countries, must be of at least six (6) months, reducing the time established in the previous decree of at least one (1) year of validity.
Albalira Montufar, Partner, Immigration Law
Panama has become a popular destination to immigrate in the region, due to its economic growth and socio-political stability, which contrasts with other neighboring countries´ intricate conditions. Within the last decade, multiple infrastructure projects, as well as incentives favorable to establish and operate multinational companies, have resulted in an increase of foreign nationals within the country, creating a multi-ethnic and multi-cultural society.
Nevertheless, Panama’s immigration law enacted in 2008 and article 17 of the Panamanian Labor Code dated 1972, both modified throughout the years, constitute a complex scenario to immigrants and employers willing to comply with the laws and changing policies. Separate processes to obtain (i) residency before the National Immigration Service and; (ii) a work permit before the Ministry of Labor, are one of the main aspects to be considered when immigrating and hiring foreign employees.
How to obtain legal residency in Panama?
In Panama, Law Decree No. 3 of 2008, which creates the National Immigration Service, and Executive Decree No. 320, which establishes the requirements and procedures applicable to obtaining temporary and permanent residency, are the core provisions regarding immigration.
As a general rule, foreigners enter as tourists for a period of 3 to 6 months, allowing them to do tourism, business or investment activities within the country. However, nationals from certain countries including China, India, and many other Asian and African countries, must request an entry visa which, when granted, is stamped at a Panamanian Consulate before traveling, and is valid for 1 month as a general rule. This entry visa applies unless the person has a valid multiple entry visa from the U.S., Canada, U.K. or Australia, and has used it at least once to enter the territory that issued said visa, in which case the person can enter Panama without a prior authorization.
During the above periods, the foreign national that wishes to apply for a residence permit must choose from a wide spectrum of options that were created to promote investment and to establish the rules to fill the need of skilled and non-skilled personnel. For purposes of this article, we will refer to the main available modalities.
Options related to the applicant’s nationality
- Residence Permit for Nationals from Countries with Professional and Economic Ties with the Republic of Panama
Foreign nationals from a list of approximately 50 countries, including the United States of America, France, Canada and Spain, can apply for a permanent residence permit in Panama if they prove to have a professional, economic or investment relationship in the country. This residence permit, also known as a Friendly Nations permit, can be obtained by setting up a Panamanian corporation or by being hired to work as an employee of a company duly established in Panama. The applicant must prove the existence of either an economic or professional activity, as well as economic solvency (the latter by means of filing a bank certificate from a local bank showing a balance of at least 4 average figures).
Once the permanent residency is granted, it is possible to apply for an indefinite term work permit that will allow the person to legally work in Panama. The challenge with this option is that if the foreigner applies for this category for work purposes, he or she must first obtain the permanent residency, and then file the work permit application. Therefore, there is a black out period in which the foreigner is not allowed to work. Anticipated coordination of this category is required to minimize risks.
- Residence Permit for Nationals from Italy
The Treaty of Friendship, Commerce and Navigation between the Republic of Panama and the Italian Republic, provides that the citizens of each of the contracting parties enjoy national treatment in the territory of the other, to carry out economic or professional activities. The main requirement is to prove the Italian nationality, as well as economic solvency (as described above).
Once the permanent residency is granted, if the foreigner intends to work, it is possible to apply for an indefinite term work permit that will allow the person to legally work in Panama. Note that Italian nationals will be exposed to the same black out period mentioned above regarding the Friendly Nation’s option.
Options based on the Company’s Quotas
- Ten or Fifteen Percent Quota
The Panamanian Labor Code sets forth the general rules applicable to hiring foreign personnel. The code provides that 90 percent of employees must be Panamanian citizens, or foreign nationals married to a Panamanian, or foreign nationals that have resided in Panama for 10 or more years. The 10% quota is a result of this rule, and applies to both the headcount and salaries of the workforce. Additionally, the Labor Code provides that companies can hire skilled staff, managerial or technical positions not exceeding a 15% limit of the total salaries and headcount.
Consequently, foreigners hired to work for a company registered in Panama, can obtain residence permits within a 10% limit for positions that are not skilled, managerial or technical, and a 15% limited for skilled, managerial or technical positions. These options grant provisional residency for two years and allows to subsequently apply for permanent residency in the country, provided that the foreigner receives a minimum wage of at least US$850.00 monthly.
In this case, once the provisional residency is filed before the National Immigration Service, it is possible to apply for a temporary work permit valid for 1 year, renewable for equal terms which, once approved, allows the person to legally work in Panama.
The challenge with this option is that the high number of foreigners in Panamanian payrolls makes it difficult to comply with the quotas. Additionally, labor policies determining how other immigration categories and work permits count in payroll have had constant changes impacting the filing and approval of these work permits.
- Multinational Headquarters
The multinational headquarters special regime established by means of Law 41 of 2007, applies to regional or headquarters offices of companies which carry out operations or services from Panama to their main offices or subsidiaries in other countries. These companies must be granted with a Multinational Headquarters’ License or “SEM” License (for its acronym in Spanish). The main advantage of this option, in regard to the hiring of foreign managerial personnel, is that these companies are not subject to the quotas established in the Labor Code, therefore making possible to hire an unlimited number of foreign workforce.
Foreign employees working for a SEM company can apply for a residence permit for Permanent Personnel valid for 5 years, renewable for equal terms. With this residence permit, there is no need to request a work permit before the Ministry of Labor, since Law 41 provides that holders of this residence permit do not require further authorization to legally work in Panama. This category also has the advantage that there is no income tax in the foreign employee’s salary in Panama, when receiving the salary from a foreign source.
Options based on the applicants’ investment
Panama’s immigration law provides the option to obtain permanent residency when investing in the country a minimum of US$300,000.00. There are 3 options to meet this requirement: (i) a deposit in a bank account maintained at least 3 years in a Panamanian bank, on the name of the applicant; (ii) investing in a US$300,000.00 (or more) real estate property located in Panama, free of liens. The real estate property can either be in the personal name of the applicant, in the name of a Panamanian Private Interest Foundation or a corporation (as long as the main applicant is both the Founder and main Beneficiary in the foundation’s case and that the shares are on the applicant’s name in the corporation’s case); and (iii) a combination of real estate property and deposits on a deposit bank account, for an aggregate of US$300,000.00 or more.
In this case, the provisional residency is granted for two years, and allows to later apply for permanent residency in the country.
The National Immigration Service and the Ministry of Labor have been tightening their policies due to the considerable influx of foreigners, in order to verify and control that foreigners stay legally in the country and that companies comply with applicable regulations.
The Government of Panama recently announced certain measures to reduce the stay as tourists for nationals of certain Latin American countries, in order to force a prompt legalization of those that decide to have a residency in the country. In this regard, the government established that nationals from Venezuela, Colombia, and Nicaragua, previously granted with a 6-month period stay as tourists, are now allowed a 3-month period only.
Moreover, Law 59 of September 12th, 2017 increases fines and sanctions to companies that hire foreign employees without a valid work authorization issued by said Ministry. Fines, that are were established in US$50.00 to US$500.00, have increased significantly due to this law, which includes (i) a US$500.00 sanction per foreign employee without a valid work permit, the first time is inspected by the authorities; (ii) a US$1,000.00 fine for each foreign employee without a work permit, the second time is inspected; (iii) a US$10,000.00 fine without considering the number of foreign employees plus the suspension of the company’s commercial license, the third time is inspected; and (iv) the cancellation of the commercial license for the fourth time.
Furthermore, said law provides that fines to companies having 10 or more foreign employees without a valid work permit, will be doubled. The names of the sanctioned companies will be listed in the Ministry of Labor’s website.
Panama’s immigration and work permit laws and policies provide a wide range of options to immigrate and work in the country. The large number of foreigners that have arrived within the last years has resulted in stricter policies and regulations. However, certain options still remain flexible. By understanding and keeping up to date with the modifications in regulations and policies, foreigners and companies can duly coordinate an anticipate applicable options and requirements, therefore reducing labor and immigration risks.
By means of the Executive Decree No. 114, as of April 4th, 2018, foreigners of nationalities that require a visa to enter the Republic of Panama may enter with a Schengen Visa or current European Union Residence.
- By means of the Executive Decree No. 114 of April 4th, 2018, any foreigner who requires a visa to enter the national territory, holding a Schengen Visa or valid residence in the European Union, may enter Panama, as a tourist, without an entry visa.
- The Schengen Visa must: (i) be granted for multiple entries and exits; (ii) be used at least once to enter the territory of the granting State; and (iii) have a validity of at least one (1) year.
- The Executive Decree became effective as of April 4th, 2018.
Aspects to be considered:
- This Decree complements the list of exceptions for foreigners that require an authorized or stamped visa, who by holding a Schengen Visa or visas issued by the United States of America, Canada, Australia or the United Kingdom, won’t need to apply for entry visas to the Republic of Panama.
By means of this Decree, the Schengen Visa is reincluded, after being eliminated by Executive Decree No. 591 of December 28, 2016, published in the Official Gazette as of January 2017.
By means of the Executive Decree No. 113 of April 4th, 2018, the Republic of India is included within the countries that require Stamped Visa issued by Panamanian Consulate, to enter the national territory.
- This Executive Decree only applies to nationals of the Republic of India.
- Officials from the National Immigration Authority and the National Security Council will be appointed at the Panamanian Consulates in India to verify the immigration requirements and the security backgrounds of each applicant.
- The cost of the Stamped Visa may not exceed Fifty Dollars (US$50.00).
- Stamped Visas can be granted for multiple entries and exits, and up to three (3) years, according to the verification criteria of the designated officials.
- This Decree will become effective as of June 1st, 2018.
Aspects to be considered:
Nationals of the Republic of India:
- Will not require a Tourist Visa (authorized) nor Certification to file residence (VTR) before the National Immigration Authority, which will considerably reduce the requirements and time to obtain immigration processes in Panama.
Holding a Visa duly issued by the United States of America, Australia, Canada, the United Kingdom or a Schengen Visa, (i) granted for multiple entries and exits; (ii) that has been used at least once to enter the territory of the granting State; and (iii) with a validity of at least one (1) year, may enter the national territory without the requirement of a Stamped Visa (Executive Decree No. 591 of December 28th, 2016 and Executive Decree No. 114 of April 4th, 2018).
As of April 1st, the travel permits for minors must be done only digitally.
- The interested party must access the website of the National Immigration Authority (migracion.gob.pa), then go to the section “Online Immigration” – option “Requests” and thus access to “Minors Permits”.
- Attach the following documents in PDF:
- Copy of Passport (Residents) or Panamanian cédula of the Minor (Panamanians); and,
- Copy of Passport (Residents) or Panamanian cédula of both parents (Panamanians).
- Once the online application is completed, the interested party must carry the printed authorization letter to any of the Notaries nationwide, where they will verify the data and register a digital copy of this process in the electronic platform.
- It is also recommended to carry the original documents to the Airport, since the National Immigration Authority may request them for verification.
- In the event that the two (2) parents travel with the child, they will only require their passports, Panamanian cédula of the minor (Panamanians) or Birth Certificate (Residents).
Resolution of the Ministry of Labor establishes the requirements for the affiliation of foreigners in the Department of Labor Immigration
- Pursuant to Executive Decree No. 76 of December 26, 2017 and Resolution No. DM-064-2018 of February 8, 2018, published on February 20th in the Official Gazette, the Ministry of Labor will require the affiliation of foreigners in the Department of Labor Immigration.
- This affiliation will consist of (i) a scan of the fingerprints through a biometrics system; (ii) passport registration; and, (iii) a photograph.
- The following documents will be required:
- Original passport.
- Copy of Immigration Status.
- Original Immigration ID card.
- Power of Attorney and Work Permit Petition.
- According to a Statement of the Ministry of Labor, this affiliation will begin to apply as of March 6th.
To whom does it apply?
- Applicants of a work permit – first time or renewal. These applicants must personally assist to the Labor Immigration Department of the Ministry of Labor to carry out the affiliation, prior to filing their petition.
- Applicants of a work permit that is in process. These applicants must carry out the affiliation at the time the photograph of the work permit ID card is taken, for which they will have to carry their original valid passport.
Foreigners who require a work permit must personally assist to the Ministry of Labor for their affiliation
By means of the Executive Decree No. 76 of December 26th, 2017, foreigners who require a work permit must personally assist to the Ministry of Labor for their affiliation.
- This Executive Decree provides that, prior to filing the work permit petition, applicants must personally assist to the Ministry of Labor for their affiliation.
- A biometrics system will be created and the affiliation will consist of a scan of the fingerprints, passport and a photograph.
This Decree entered into force on December 27, 2017, after its publication in the official gazette No. 28433-A. Nevertheless, the authorities are carrying out the necessary adjustments for the implementation of the system.