Work permits and visas in Panama: an employer’s guide

It's no secret that Panama is a great place to work. The weather is perfect, the wages are good, and the cost of living is relatively low. But before you can start enjoying all that Panama has to offer, you need to make sure you have the correct right-to-work permissions in place.

As an employer, it's your responsibility to ensure that employees have the correct visas and work permits for Panama. Employers need to stay compliant with the various labor and taxation laws when hiring, relocating, and allowing digital nomads to work in Panama.

This guide provides employers with key information about work permits and visas in Panama, eligibility requirements, and how to ensure compliance by working with an employer of record (EOR) in Panama.

The importance of immigration compliance in Panama

When an employee chooses to work remotely from another country, even if it is for a short period, the stakes are high. If it’s discovered that the employee is not authorized to work in Panama, they may be subject to fines or other penalties. 

Even working on a tourist visa is often illegal, and governments are starting to enforce this legislation more as the remote working trend increases. Thus, employees need to have the correct right-to-work entitlements if they are going to work in Panama remotely.

There are a few different types of right-to-work entitlements that an employee may need to work in Panama. The most common is the mandatory contract labor certification. This entitles an employer to hire workers based on a certificate that specifies their qualifications, which must be obtained from labor inspection agencies accredited by the Panamanian Ministry of Labor. 

Other types of authorization may include a residence permit for contract workers and a visa for migrant workers. However, obtaining all of these entitlements can be complicated and time-consuming. If an employee is found working without the correct authorization, they may be subject to fines or other penalties from both Panamanian authorities and their employers.

In addition, if their Panama work visa expires while they are working without proper authorization, they may be deported back home — potentially resulting in loss of income and refugee status in their home country. As such, employers must ensure that their employees have the correct documentation before they begin working remotely from another country. This way, they can avoid any potential complications or problems down the road.

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Which workers need a right-to-work check in Panama?

In Panama, right-to-work checks may only be required for certain categories of workers. Temporary residents and work permit holders may be required to provide proof of their right to work before taking up employment.

Right-to-work checks help employers ensure they are not hiring illegal immigrants who are not entitled to work in the country. This can avoid potential fines or other penalties that could be incurred if illegal workers are found to be employed by the company.

For companies relocating employees to Panama, it is important to ensure that any staff who require a right-to-work check are given the appropriate documentation well in advance of their move. This will avoid any delays or problems that could occur if the necessary checks are not carried out before employment begins.

Do non-citizens need a work visa or work permit in Panama?

Yes, all foreign nationals who wish to live and work in Panama must obtain an immigration visa and establish residency before applying for a Panama work permit. 

Non-citizens without a work visa or permit are not legally allowed to engage in paid employment within Panama. Individuals who violate this regulation may be subject to deportation and other penalties. Employers who hire illegal workers may also face severe fines. There are a few different types of visas that you can apply for, depending on your particular situation. 

Employment visa

The most common type of visa for foreign workers is the employment visa, which allows you to live and work in Panama for up to two years. You will need a job offer from a Panamanian employer to apply for this type of visa.  

Self-employment visa

If you're planning to start a business in Panama, you can apply for a self-employment visa. This type of visa allows you to live and work in Panama indefinitely. However, you will need to prove that you have the financial resources to support yourself and your family. 

How is the Schengen visa applicable? 

The Schengen Visa is a uniform visa that allows its holder to enter, stay, and travel in any of the 

Panama is not a member of the Schengen Agreement, but nationals of certain countries are exempt from visa requirements and can visit Panama without a visa. These countries include the United States, South Korea, Canada, Australia, and all EU member states.

What are the eligibility requirements for a work visa in Panama?

First and foremost, you will need a job offer from an employer to apply for a work visa. Once you have this, you can begin the application process. 

To obtain a work visa for Panama, applicants must submit the following documents along with the application:

• A passport that is valid for at least six months 

• A copy of the information page from their passport

• A visa application form

• Four passport-size photos 

• Employment contracts with companies based in Panama 

• Proof of accommodations in Panama

• A medical certificate confirming good health

• Police background checks from the applicant’s country 

The documents will be reviewed by the Panamanian government. If everything is in order, they will issue you a work visa, which allows you to stay and work in the country for up to one year. After that, you can apply for an extension if necessary.

For those who wish to get a Panama work permit, additional documentation is required. These include an application that should be completed by an attorney, a letter of responsibility from the employer, and a copy of the resolution of the National Immigration Service demonstrating that the applicant has established permanent residency status.

What are the long-stay visa types in Panama?

There are several long-stay visa types available in Panama, each designed to suit a different purpose. Some relevant long-stay visas that allow you to work or conduct business are mentioned below.

• Panama Friendly Nations Residency Program: Available to citizens of certain countries with whom Panama has friendly diplomatic relations.

• Panama Digital Nomad visa: Intended for individuals who work remotely and do not have a fixed address (more on this below).

• Professional Employment visa: Permits foreigners to take up employment in Panama. 

• Panama’s Business Investor visa: Intended for foreign investors who wish to set up a business in Panama. 

How do you get a work visa for Panama?

The Panama work visa requirements vary depending on the type of visa you are applying for. Generally, you will need to provide proof of your qualifications or experience, as well as evidence that you have been offered a job in Panama. You may also need to provide financial documents and undergo a medical examination. Where you apply for a work visa in Panama also depends on the type of visa you are applying for; most applications can be made online, but some may require an in-person appointment in the Panama embassy.

The average processing time for a Panama work visa is around three to six weeks, although this can vary depending on the specifics of your application. Once your application has been approved, you will be issued a work permit, allowing you to live and work in Panama legally.

What is the process for employee work visa sponsorship in Panama?

The process for employee work visa sponsorship in Panama is straightforward. Employers must first register with the Ministry of Labor and submit all the required documentation. Once this is done, they can begin the sponsorship process. The employer must then submit a request for a Panama work permit to the immigration authority. This request must include all relevant information about the employee, such as their qualifications and experience. It can take up to two weeks for the immigration authority to process this request.

Once the employer has received approval from the immigration authority, they can apply for a work visa on behalf of the employee. The employee will need to provide various documents, such as a passport and criminal background check. It can take up to four weeks for the visa to be processed.

After the employee has received their work visa, they will be able to start working in Panama. Employers are required to provide relevant insurance coverage for their employees. Employees may also be subject to income tax in Panama.

Remote offers a range of relocation services, including visa guidance and sponsorships, local immigration and tax guidance, relocation and settling-in assistance, insurance, and cross-cultural training. Get in touch with our Mobility team to get relocation advice based on your specific needs.

What are the visa requirements for digital nomads in Panama?

Digital nomads who want to work in Panama need to obtain a Short-Stay visa for remote workers. The requirements for this visa include a completed application form, a valid passport, certified passport copies, and three passport-size photos. You'll also need to provide a certificate of good health, an affidavit of non-acceptance of any jobs within Panama, proof of annual income, and a certificate of a clean criminal record. Finally, you'll need valid medical insurance to apply for the Panama Digital Nomad visa.

How to apply for a digital nomad visa in Panama?

• Schedule an appointment with a Panama embassy or consulate.

• You'll have to prepare several documents for your appointment, including proof of financial solvency and travel insurance. 

• Once you have all your documents ready, simply go to your appointment and pay the necessary fees.

• Your application will then be processed, and you should receive approval within a few weeks.

How does Remote make compliance in Panama so much easier? 

Relocation can be a stressful process for both employees and employers. There’s a mountain of paperwork to process and complicated employment laws to understand. You’ll also have to ensure ongoing compliance with local labor rules, immigration regulations, and tax practices.

Partnering with an EOR like Remote makes global hiring and expansion simple. Remote handles international payroll and benefits, compliance, and more. Remote can help you:

1. Fulfill requirements for immigration and visas: It is essential to understand the specific immigration rules to ensure that an employee is working legally in another country. Your business could still face issues if an employee breaks the law unknowingly.

2. Understand international taxation: Taxes can get complicated when a company operates with employees in multiple countries. However, tax treaties between countries will dictate where a business pays income taxes and corporate taxes.

3. Be wary of permanent establishment risk: The presence of workers in a country alone doesn't always result in a permanent establishment, but the type of role an employee fulfills may. Businesses must continuously reevaluate their risk factors since permanent establishment isn't a one-and-done issue.

4. Stay compliant with local employment laws: Failure to comply with local laws can result in heavy fines and penalties, including the misclassification of workers. In addition, companies cannot legally hire someone in another country unless they are employed by a legal entity there. 

To learn more about the employee relocation process, download Remote’s Relocation Guide. You can also contact our team with your specific case for advice on employee hiring or relocation in Panama.

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