Global PEO in Panama
There are talented employees located all over the world. Are you ready to hire them… but don’t know where to start?
Hiring globally seems like a daunting task, but it doesn’t have to be if you work with a professional employer organization (PEO). The rise in popularity of remote work opened the doors for PEOs to shine — and more companies than ever are utilizing their services.
Companies like Skuad are on hand to offer PEO services in Panama. With Skuad’s easy-to-use platform, onboarding, hiring, and paying employees in 160+ countries is a breeze!
Unsure of what a PEO is or how it helps? Keep reading to learn more.
What is PEO?
A PEO, or professional employer organization, is a service provider that completes human resources functions for a company. PEOs often take on the time-consuming and burdensome tasks that eat up time for most companies, such as:
- Employment contracts
When your business partners with a PEO in Panama, you allow more time for the core business processes that keep the business moving. As company leaders, your time should be focused on expansion initiatives — not administrative tasks or complicated internal labor law.
A PEO allows you to build a global team with workers from all over the world, including Panama, with little effort on your part. The PEO ensures accurate currencies, benefits, and tax rates so you don’t have to. You no longer have to worry about compliance issues because a PEO will ensure you remain 100% compliant in all activities.
Click here to learn more about hiring in Panama with Skuad.
What are the benefits of using PEO services in Panama?
The benefits associated with hiring a PEO service provider are extensive. Using a PEO in Panama opens a lot of doors for your business that may not have been available without the provider.
Hire top talent in Panama
You want to hire the most talented employees for your company and sometimes, those employees are located in another country, like Panama. With the rise in remote workers, why shouldn’t you hire from all over the world?
Panama achieved over 15% economic growth in 2021! The economy is robust with highly qualified workers searching for top companies to work for…like yours. You can gain access to those workers, and many others, by working with a PEO.
Position your company as a global competitor
A company that thrives with workers all over the world is considered a successful one.
By working with a PEO, you enable that for your company. You can hire global talent while maintaining compliance with the country they are located. This positions you as a global competitor and helps to attract more qualified candidates.
Save on unnecessary costs
Completing the necessary steps to hire talent in Panama without a PEO would be a significant cost. You would also have to pay salaries and provide benefits for an internal human resources department. And this team would need continuous training to ensure compliance with all the different legalities.
It’s easy to see how the costs quickly add up!
And that’s not to mention the costs associated with hiring lawyers in each country to draft employment laws or the costs associated with the annual fees of managing an entity. Enough said!
Talk to Skuad today to get a sense of how much you could save.
Gain insight into new markets
Most global companies have future plans to expand to new markets. By working with a PEO, you gain insight into all kinds of new markets. This helps you make better and more strategic decisions in the future when your company is ready for growth.
Caterpillar, Procter & Gamble, Air China, Hershey, and Heineken have all recently moved their LatAm branches to Panama. Now’s your chance to get your foot in the door and explore the market’s potential.
Avoid setting up a new entity in Panama
If your company starts recruiting without a PEO in Panama, the only other option for hiring workers is to set up a new entity in the country. This not only costs quite a bit more, but it takes much longer to get going. With a PEO, you can start onboarding global employees in less than a month while establishing a new entity could take years.
If you establish a new entity, you also have to consider the cost of a legal team in Panama to help you navigate the complex laws and company registrations. As a company leader, you would also have to travel to Panama quite a bit to complete all the necessary paperwork and registration activities.
Many PEOs already have an entity in Panama (we certainly do!) so you can get started hiring as soon as you are onboarded. The PEO serves as your legal requirement for hiring and employing workers in Panama. They also have the expertise needed to maintain 100% compliance with all labor laws.
Working with a PEO frees up your time to focus on managing your team and creating expansion plans. Growing as a business has never been easier than it is when working with a PEO!
Keen to learn more about Skuad’s PEO services in Panama? Book a demo today.
Improve cultural awareness
One of the most important parts of hiring globally is understanding the different cultures. A PEO can help you navigate cultural differences so you don’t offend business partners or your workers. This will help make you a better leader.
For example, did you know when you go to a meeting in Panama, you should shake everyone’s hand in the room? But you need to start with the most senior leader. And don’t be shocked if people you have known for some time kiss you on the cheek or hug you as a greeting.
Remain 100% compliant with employment laws in Panama
Did you know the standard workweek in Panama is 48 hours? Or that overtime is complex and varies based on the industry you’re in?
When you hire global employees, it’s vital you understand the laws and regulations that apply to that specific country.
You can bypass the stress of learning new laws by working with a PEO. Your PEO partner in Panama will act on your behalf to hire employees and maintain current knowledge of all laws and regulations so you don’t have to.
In Panama, employees receive 13 months of pay for every 12 months worked. Employers can pay the extra month at once at any time or over three installments in April, August, and December.
- Panama recognizes 10 public holidays throughout the year.
- After 11 months of employment, employees are entitled to 30 paid days off. Employees may split vacation days into two times.
- With a doctor’s note, employees can take up to 18 days of paid sick leave.
- Maternity leave is typically paid for by the social security agency, it depends on how long the employee has been working. Employees get 14 weeks of paid leave for maternity leave. They can take 6 weeks before birth and 8 weeks after.
- Paternity leave is for 3 days directly after the birth of the child. Employers pay paternity leave.
Panama income tax for employees:
- Income less than $11,000 per year – no income tax
- Income between $11,000 and $50,000 – 15% rate
- Income $50,000 or more – 25% rate
- 12.25% social security
- 1.50% education tax
- 1.92% unemployment insurance
- 0.98%-5.67% accident insurance
- 9.75% social security
- 1.25% education tax
What does it cost to build a team in Panama?
You have two options for hiring in Panama: you can incorporate a new company or you can hire a PEO. Read about each below.
Setting up a business in Panama
To set up a new business, you have to go through the process of company registration in Panama. There are several steps included that will take months to complete:
- Name the company
- Select a structure
- Appoint shareholders
- Register with agencies
- Write bylaws
- Open a corporate bank account
As you can see, the list is fairly long. And as a foreign company coming in, it may take even longer to get the process going. You can avoid all of this by working with a PEO.
Using a PEO in Panama
Working with a PEO allows you the same hiring freedom in Panama for a fraction of the cost. You can start hiring contractors with Skuad’s PEO service for $19 a month per worker. For businesses that need a more comprehensive solution, you can purchase the employer of record in Panama service starting at $199 per month per worker.
Skuad makes it easy for businesses! You can start an account for free and cancel at any time.
Get started with PEO services in Panama Today
If you are ready to start PEO or EOR services in Panama, Skuad is here for you! Contact us today to book a free demo and see how our easy-to-use platform can help you expand globally.