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IMPACT – HIGH
What is the change? Panama has overhauled its immigration and labor laws.
What does the change mean? The changes include creation of a new temporary visa for U.S. nationals, extension of work permit validity in some categories while restricting it in others, and eased procedures for professional work permit applications.
Additional information: The reforms were announced in late May and took immediate effect. Among key changes, officials have:
Analysis & Comments: On the whole, the changes will help companies recruit and retain foreign nationals in Panama. In some cases, however, work permits will be restricted or subject to additional application requirements. Employers are encouraged to review the new rules and amend immigration and recruitment plans as needed.
Source: Deloitte LLP. Deloitte LLP is a limited liability partnership registered in England and Wales with registered number OC303675 and its registered office at 1 New Street Square, London EC4A 3HQ, United Kingdom.
IMPACT – MEDIUM
What is the change? The Ministry of Labor has published new work permit regulations for the Specific Countries Permanent Residence.
New regulations:
Background: The Friendly Nations Residency Permit (Specific Countries Permanent Residence) may be granted to individuals on the Friendly Nations List for the purpose of pursuing commercial or professional activities in Panama. Once approved, this permit grants an indefinite residency in Panama. Applicants must show a bank account with approximately $5,000 or more and proof of a commercial or professional activity linked to Panama. This last requirement may be fulfilled by starting a new business, purchasing an existing business or being hired to work for a Panamanian company.
Analysis & Comments: Employers should take into consideration the new regulations as they will impact work permit applications for specific nationalities. Processing times for this permit category will be shorter because employees will no longer need to wait for the final permanent residence approval in order to start working.
What is the change? Panama enacted a regulation Monday that allows nationals of China, Cuba, the Dominican Republic, India and Venezuela to apply for five-year, multiple-entry visas for business or tourist visits.
What does the change mean? Eligible nationals will not have to renew their business visas as often. Previously, multiple-entry visas were generally valid for two years.
Analysis & Comments: The longer validity period provides a convenience for nationals of the five designated countries. Travelers are reminded that while the extended validity allows for multiple entries during the five-year period, each visit to Panama remains restricted to 30 days with a possible 60-day extension.
What is the change? Panama has changed entry requirements for visa-required nationals.
What does the change mean? Effective immediately, nationals of visa-required countries may enter Panama for tourism or business with a visa or proof of residence issued by Australia, Canada, Japan, Singapore, South Korea, the United States, the United Kingdom or any other European Union member state, provided other requirements are also met.
Background: Previously, visa-required nationals were permitted to enter Panama for business or tourism if they held a stamped visa or proof of residence issued in Canada, the U.S. or the U.K. or another European Union country. Australia, Japan, Singapore and South Korea have now been added to that list. Visas must be valid for at least six months (previously one year) from the date of entry into Panama. Visas must be valid for multiple entries and must be used at least once to enter the issuing country before travel to Panama. Travelers who have met these requirements will be permitted to stay in Panama for 30 days, renewable for up to two 30-day extensions.
BAL Analysis: Affected travelers should take note of the changes and assess whether they need to obtain a new visa before traveling to Panama.
Copyright © 2018 Berry Appleman & Leiden LLP. All rights reserved. Reprinting or digital redistribution to the public is permitted only with the express written permission of Berry Appleman & Leiden LLP. For inquiries please contact copyright@bal.com.
What is the change? Panama has eased entry requirements for foreign nationals holding Schengen visas and for Indian nationals.
What does the change mean? Indian nationals no longer require an authorized visa to enter Panama and may instead obtain a stamped visa. Foreign nationals who normally require an authorized visa or stamped visa are exempt from an entry visa if they hold a Schengen visa that is valid for multiple entries and that has been used at least once and will remain valid for at least one year as of the date of entry into Panama.
Background: The Panamanian government requires that certain nationals obtain an authorized visa from the National Immigration Service, which increases processing time. Indian nationals have now been removed from the list, but must still apply for a stamped visa at a consulate. Schengen visas have again been added to the list of visas allowing holders to be exempt from entry visas (they were removed in January 2017); others on the list include holders of visas to or residence in Australia, Canada, the United Kingdom and the United States.
BAL Analysis: Indian nationals and other restricted nationals holding Schengen visas will benefit from the eased visa policy, but should note that visas will only be granted for 30 days, extendable for up to an additional 60 days.
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.
What is the change? Panama is introducing a new online process for parents to apply for exit permits for minors.
What does the change mean? The application and supporting documents are to be submitted online to the National Immigration Service and the exit permit must be printed out, notarized and taken to the airport when the minor exits the country.
Background: Applicants must also upload a copy of the child’s passport, copies of both parents’ passports and a copy of the passport card or valid escort card if the child will be traveling with a third party. The form must be printed and taken to a notary to validate the information. The notarized form must be carried and shown to the immigration officer if requested.
Minors who are traveling with both parents do not require an exit permit; however, they must show their passport, youth card or birth certificate.
BAL Analysis: The online process should simplify the exit permit application process, but parents are advised to leave enough time to have the form notarized and factor in possible delays as authorities transition to the new process. BAL has confirmed with immigration authorities that cases where the authorization has been issued through a power of attorney for multiple exits will not be affected by these changes.
What is the change? Panama has reduced the length of time nationals of Colombia, Nicaragua and Venezuela can remain in the country when traveling for tourism or business purposes.
What does the change mean? Nationals of Colombia, Nicaragua and Venezuela are now permitted to remain in Panama on a visa exemption for 90 days, down from 180 days. Those who entered the country before May 31 will be permitted to stay for up to 180 days.
Background: Panama allows nationals of Colombia, Nicaragua and Venezuela to enter the country without a visa for tourism or certain business activities, including attending meetings, visiting clients and assisting with training or seminars. Panamanian officials said the change came about after a number of Colombian, Nicaraguan and Venezuelan nationals were entering Panama as tourists and then conducting activities that are not permitted. Executive Decree Nª 269 of May 29 of 2017, which formalized the change in visa validity, was published in the Official Gazette last month.
BAL Analysis: Nationals of Colombia, Nicaragua and Venezuela who arrived on or after May 31 should be sure they do not stay in Panama for more than 90 days. Those with questions about permitted activities on a visa exemption should contact BAL.
Copyright © 2017 Berry Appleman & Leiden LLP. All rights reserved. Reprinting or digital redistribution to the public is permitted only with the express written permission of Berry Appleman & Leiden LLP. For inquiries please contact copyright@bal.com.
What is the change? Panama has begun allowing foreign nationals to use corporations to make real estate investments in Panama in order to obtain permanent residence.
What does the change mean? Economic Solvency Visas are available to foreign nationals who (1) invest at least $300,000 for at least three years in a certificate of deposit at a licensed Panamanian bank; (2) invest at least $300,000 in a titled property in Panama; or (3) invest a combined total of at least $300,000 in a CD and real estate. Under the new regulations, real estate investments may be made not only personally or through a private foundation, but also through a corporation. The corporation’s shareholders must be the principal applicant and/or his or her dependents.
Background: The visas are available to foreigners who are able to make substantial investments in Panama, as outlined above. Additional investments of $2,000 are required for each dependent whom the principal sponsors. Under previous rules, applicants could either make real estate investments in their own name or in the name of a private interest foundation they control. Applicants may also use a corporation to purchase the property, provided the shareholders are the principal applicant and his or her dependents.
BAL Analysis: The visas provide an expedited path to residency in Panama for foreign investors and their families, and the ability to use corporations to make investments will make obtaining the visas easier for some foreign investors. Those who obtain an Economic Solvency Visa are eligible to apply for citizenship after five years of residence in Panama, though some exceptions may apply based on nationality or if the investor has Panamanian children.
Copyright © 2017 Berry Appleman & Leiden LLP. All rights reserved. Reprinting or digital redistribution to the public is permitted only with the express written permission of Berry Appleman & Leiden LLP. For inquiries please contact copyright@bal.com
What is the change? Panama’s Ministry of Labor has said it will revoke a rule announced last week that would have resulted in workers in the Foreign Professionals and Friendly National categories counting as “foreign workers” for company quota purposes.
What does the change mean? Workers in the two categories will not be counted toward the 10-percent quota when the foreign-hiring limits on a company are calculated. The ministry did leave in place requirements that workers must have a local employment contract and be on local Social Security payroll.
Background: Panamanian companies are restricted in employing foreign workers to certain percentages of their workforce. As BAL reported, Panamanian authorities announced last week that workers in the Foreign Professionals and Friendly National categories, who traditionally do not count toward the quota, would count as foreign workers. Authorities have now said, however, that the rule will be revoked. Workers in these two categories will not count against the 10-percent quota.
BAL Analysis: The revocation of the rule is welcome news because, had authorities gone forward with the rule, it would have changed many companies’ foreign-worker numbers and hindered their ability to hire foreign nationals. While the employment contract and Social Security requirements for the Foreign Professionals and Friendly National categories have not changed, workers in these categories will not be counted as foreign workers for quota purposes.
What is the change? The Ministry of Labor recently announced a new requirement that work permit requests in the Foreign Professional or Friendly National categories include an employment contract and local payroll.
What does the change mean? The change means that foreign workers in the two categories will now be counted within the 10-percent quota when calculating the foreign-hiring limits on a company.
Background: Panamanian companies are restricted in employing foreign workers to certain percentages of their workforce. Foreign Professionals and Friendly Nationals may not make up more than 10 percent of a company’s workforce.
BAL Analysis: The rule may suddenly change companies’ foreign-worker numbers and may negatively impact their ability to hire foreign nationals. Employers are encouraged to contact their BAL professional to assess whether they are in compliance with the foreign-hire limits and whether to explore alternate visa routes.