The Ministry of Labor and Labor Development of the Republic of Panama published Executive Decree No. 6 of April 13, 2023, published in Official Gazette No. 29760-C on the same date. (hereinafter, the “Executive Decree”). This Decree repeals Executive Decree No. 4 of March 2, 2023, and also establishes new provisions on work permits in Panama for foreign persons.

Main changes in work permits for foreigners

In summary, the most relevant aspects of the Executive Decree on Work Permits in Panama are the following:

• The permits that affect the calculation of payroll percentages for hiring foreign personnel are exhaustively established in the law.
• A work permit for Qualified Investors is established.
• The category of work permit for foreigners with Own Economic Solvency is created as an alternative to the elimination of work permits under the permanent resident category.
• It is provided that foreigners who hold an indefinite work permit under the category of nationals of Specific Countries that maintain friendly, professional, economic, and investment relations with the Republic of Panama (Friendly Countries).
• The requirement for work permits for foreign workers who hold a residence permit under the permanent personal status of a Multinational Company Headquarters (SEM) is eliminated.
• The work permit for workers hired as trusted personnel of an employer, whose transactions are perfected, consumed, or take effect abroad, is regulated, and their hiring will not affect the percentages established in Article 17 of the Labor Code.
• It is established that dependents of foreign personnel who maintain residence under the SEM or EMMA regime may opt for any work permit contemplated in internal regulations.
• The Executive Decree contemplates the legal obligation to notify the Ministry of Labor by simple note or memorial when a foreigner enters the country as a traveling agent for commercial houses, administrators, or international auditors at a managerial level, for a maximum of 15 calendar days.

Effectiveness and application

The Executive Decree will come into force on May 13, 2023, but the provisions of Executive Decree No. 4 of March 2, 2023, remain suspended and without application by virtue of resolutions from the Ministry of Labor and Labor Development of Panama in this regard. As of today, and until the entry into force of the Executive Decree, the regulations that were in force for Work Permits in Panama before the promulgation of Executive Decree No. 4 of March 2023 will continue to apply.