The Ministry of Labor in Panama has recently unveiled a revised Executive Decree that introduces significant changes to the work permit regulations initially proposed in March 2023. The new version is set to come into effect on May 15, 2023, bringing with it crucial modifications to streamline the process for foreign nationals seeking employment in Panama.
Here are the key highlights of the revised Executive Decree:
Reversal of Work Permit Requirement for Certain Visa Holders:
Foreign nationals holding visas under special laws, such as Multinational Company (SEM) and certain Companies Providing Manufacturing Related Services (EMMA), will no longer need an additional work permit to work in Panama. This aligns with the existing system and eliminates a previous requirement introduced in March 2023.
Introduction of a New Work Permit Category:
The revised decree introduces a new category, the “Work Permit under Special Economic and Investment Laws.” This includes foreign nationals with Specific Country visas by investment and certain other investors, addressing a gap left by the March decree.
Exemption for Specific Country and Humanitarian/Protection Work Permits:
Foreign nationals holding Specific Country or Humanitarian/Protection work permits are now exempt from the foreign national population percentage for quota calculation purposes, providing greater flexibility.
Expanded Eligibility for Dependents of SEM and EMMA Visa Holders:
Dependents of SEM and EMMA visa holders now have the option to apply for work authorization under any existing work permit category, as opposed to being limited to work permits issued under a quota requirement.
Stricter Penalties for Labor Law Offenses:
Employers are now subject to fines of up to USD 15,000 and temporary suspension of the company’s operating permit upon a third offense breaching labor laws. This reinstates the previous penalty structure and rectifies a reduction to USD 1,500 introduced in the March decree.
Continued Work Permit Renewals for Permanent Residents: Although the March decree eliminated the specific category for Permanent Residents to obtain work permits, the new decree ensures that foreign nationals who already hold this type of work permit can continue renewing it indefinitely. This revised Executive Decree encompasses various other changes, and we encourage employers and foreign nationals to consult with their immigration and labor professionals for case-specific advice.