If you are looking to hire employees in Panama, you will need to obtain a work permit and visa for them. The process of obtaining these documents can be difficult and confusing, so it is important to know what the requirements are and how to apply.
In this blog post, you'll learn the process of obtaining work permits and visas for employees in Panama, as well as other considerations you should take into account.
Types of Panama work permits
Panama has a rather complex work permit process because employees are required to obtain certain documents depending on their country of residence. While some employees may only have to apply for a residency and work permit, others will also need a visa before securing legal work status.
If you're looking for international expansion, below is a guide to the different work status options for foreign nationals looking to work in Panama.
Panama has an executive decree #521 that sets laws around tourist visas and which countries require one to enter the country.
A Panama work visa is one of the prerequisites to gaining legal employment status in Panama. Once the visa has been granted, the employee is able to move on to the next step in the work permit process.
The visa allows your employee multiple entries so they can leave and come back to Panama without any restrictions. There are also a set of requirements that must be met before a visa is granted.
A number of countries, such as the United States and Germany, have the luxury of not needing a visa from Panama thanks to international relations. Any foreign nationals from these countries can start immediately start applying for the Residency ID Card, which is also required for a work permit to be granted.
Panama residency ID card
The Residency ID Card is an identification document that verifies your employee as a legal temporary resident of Panama. There is a permanent residency ID card that can be applied for after two years of holding the temporary residence card if your employee wishes to stay longer in the country.
Panama Work Permit
Once a visa and residence permit has been secured, you as the employer can start the application for the work permit. Up until this point, the employee has only gained a legal right to stay in Panama. With the work permit, the employee may start working for your company. You will need to file the work permit with the Ministry of Labor.
Panama has set strict requirements for obtaining a work permit, and they have made the process complex by requiring a visa and residency ID card. The country is prioritizing Panamanian nationals over foreigners to protect the local job market. They don't want foreign business entities only hiring foreign workers and leaving their own workforce unemployed.
To ensure your employee has an opportunity to be employed, you must meet a set of rigid guidelines.
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What are the requirements to obtain a work permit in Panama?
Since obtaining a work permit requires a Panama visa before obtaining a work permit, this guide will cover the requirements for both.
Learning and following all the restrictions outlined below can take a significant amount of your time and effort. Any mistakes can also lead to your employee being denied legal work status. Even worse, your company could be at risk for penalties and fines due to incorrect documents or forms being filed.
To make the process more efficient, it's recommended that you work with a global employment platform that specializes in Panamanian businesses. These types of services help manage the work permit and visa process for you with legal experts familiar with Panama law.
If you do choose to go through the process alone, below are the requirements for each visa and permit to obtain full legal work status.
Panama visa requirements
While there are many countries that do not require a visa to enter Panama, there are a select few that do. However, individuals with a diplomatic passport to specific countries are exempt from a visa even if the countries are listed on the non-friendly nations list. These countries include:
- Republic of China
- Dominican Republic
Otherwise, your employee must obtain a visa if they do not meet the waiver or they are not on the no-visa required list.
Here are the requirements your employee must meet for a Panama visa:
- Completed visa application
- Copies of passport pages, and passport must have at least three months of validity before the trip
- Flight reservation
- Copy of ID
- Three passport-sized photographs
- Application fee
- Proof of financial means
- Hotel reservation (if applicable)
Panama work permit requirements
A work permit is easier to get once your employee is through the process of obtaining a visa. Below are the requirements needed to get a work permit in Panama.
- Letter of responsibility from the employer
- A completed work permit application, ideally filled out by an attorney
- Copy of applicant's Residence ID card
- Four passport photos
- Copy of the resolution of the National Immigration Service showing the employee has established a more permanent residence
There are other restrictions that must be met as well. For example, a company must not have more than 10% of foreign employees on the payroll. Not only does most of your staff need to be Panamanian, but you as the employer must also demonstrate there are no local candidates suitable to perform the job.
The employees must also be paid a minimum of $850 a month and only plan on staying in the country for a maximum of six years. The combination of the 10% rule and the process involved in obtaining a work permit make it difficult for business and employees alike.
Panama has what are considered restricted industries in which Panamanian nationals must fill all positions, such as engineering, law, accounting, and psychology. Regardless of whether your employee is able to secure a work permit, they still cannot perform any of these jobs.
If you do not follow Panamanian law, your company will be susceptible to large fines and penalties from the Panama government. Your employee might also be denied visa status and be forced to relocate to their home country.
It's best to work with a global payroll provider who has experience with local Panama regulations and can go through the visa and permit application on your behalf, removing the liability from your company.
After all the requirements have been met, your employee can apply for a work permit.
How to apply for a work permit in Panama
Since your employee needs to establish residency before obtaining a work permit, both need to be covered for you to successfully employ a foreign national in Panama. The residence visa application process is with the National Immigration Service, while the permit process is through the Ministry of Labor.
The employee needs first to visit the local embassy or consulate in their country of residence. This is where they will submit all their documents and forms required for the visa residency process.
The residency process can take a significant amount of time if your employee is not a part of the Panama-friendly nations, so it is always recommended to start well in advance from the time your employee plans on relocating. If your employee is part of the friendly nations pact, it should only take a month or two to complete.
Once the visa has been granted, you can start on the work permit application. This will be delivered to the Ministry of Labor and will allow your employee to start working for your company once received. Keep in mind that you still cannot have more than 10% of foreign nationals working for your subsidiary in Panama.
An application for a work permit can be costly. The Panama government charges a $500 fee; this doesn't include attorney fees if needed, or other additional expenses. A work permit is valid for 1-2 years, but it is possible for your employee to renew the permit before it expires.
Application processing time
The different steps in the work permit process all take varying amounts of time. Also, the distinction Panama makes between friendly and non-friendly countries further complicates the duration of an application and permit process.
For example, countries that are not included in the friendly nations list will need to wait even longer for residency approval. A typical processing time may take as long as six months to be approved. Countries that are listed under the friendly nations list are prioritized and should expect to wait anywhere from one to two months for approval.
Once the visa is granted, you can apply for the permit, which may take an additional two to six months. Unfortunately, there is no expedited permit or visa available for workers who need immediate help. It's crucial you begin this process for your employee as soon as possible to ensure full compliance with local laws and regulations.
Planning to hire or work in Panama? Here’s how Skuad can help
Panama is unique in how it handles foreign nationals looking to work in the country. It makes the process rather difficult and lengthy. Instead of only needing to secure one visa or permit, employees will need a residency visa first followed by a work permit.
As the employer, you will be responsible every step of the way ensuring that your employee gathers the correct documents and files the right forms. You'll also need to check for any errors or mistakes that could cause a denial for Panama immigration.
Skuad’s team of experts has extensive experience in Panama visa and employment permit processes, making sure your employees are compliant and your company runs smoothly.
Not only can Skuad help with international visas, but we also handle the entire onboarding and payroll process. Hire talent in Panama and beyond and build globally-distributed teams easily with Skuad.
1. How long does it take to get a work permit in Panama?
The exact time length will depend on which country you live in. Countries that are part of the Panama-friendly nation list will only have to wait 1-3 months to receive a work permit. Countries that are not on this list might have to wait up to six months to be approved. That isn't including the time it takes to receive a residency card and visa, which can take anywhere from 2-3 months.
2. How much is a work permit in Panama?
The Panama government charges a $500 fee for anyone needing a work permit and visa in the country. There will be additional charges you will have to pay when applying for the Panama visa and residency card. You might also need the help of an attorney, which will end up increasing the cost of your application fees. There is also the cost of your time because the process is complex and requires gathering multiple documents and forms.
3. What jobs can foreigners get in Panama?
Panama has a list of restricted jobs that must be filled by a Panamanian national. These jobs include engineering, law, accounting, and psychology. Even though a foreign national is eligible for a job position, the company still needs to employ less than 10% of foreign nationals for the job to be approved. Any other job is open for foreigners to apply for.
4. How long can a US citizen stay in Panama?
A work permit in Panama is valid for up to 1-2 years. However, the employee may apply for a renewal as long as the current permit is not expired. A U.S. citizen is able to stay in Panama without a visa for up to 90 days but they are not allowed to work for a foreign business.
5. Can a US citizen work in Panama?
Yes, any U.S. citizen is considered to be on the friendly nations list in Panama and will have an easier time obtaining a residency card and work permit. The application will be prioritized over non-friendly nations.