Panama drops salary minimum for certain international workers

IMPACT – MEDIUM

What is the change? Panama’s National Immigration Service has lowered the minimum salary for foreign workers on International Executive visas from US$5,000 a month to US$2,000.

What does the change mean? Companies may wish to adjust payroll budgets in light of the lower salary minimums, which follow a dramatic increase in the salary minimum in June.

• Implementation time frame: The new salary threshold took effect Nov. 29.
• Visas/permits affected: International Executive visas.
• Who is affected: Companies headquartered abroad sending foreign nationals to Panama to work in a branch office.
• Business impact: The lower salary threshold could, in some circumstances, significantly reduce costs for companies sending workers to a Panamanian branch office.

Background: In June, Panama dramatically increased the minimum salary for workers on International Executive visas from US$1,000 a month to US$5,000 a month. Panamanian authorities subsequently decided to lower the threshold in order to bring it into closer accordance with minimum salaries for other visa categories in Panama. The US$2,000-a-month minimum took effect Nov. 29, when the new salary level was published in the Official Gazette.

BAL Analysis: The reduction of the minimum salary represents a significant change that will make it easier for companies to send employees to work in Panamanian branch offices on International Executive visas. Companies should take note of the change and adjust their employee salaries if they wish to do so.

This alert has been provided by the BAL Global Practice group and our network provider located in Panama. For additional information, please contact your BAL attorney.

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