Panama Work Permits & Visas: Employer Guide to Types & Sponsorship

Who Needs a Work Permit in Panama?

In Panama, any foreign national intending to engage in employment activities requires a work permit. Employers must ensure that their international hires possess the appropriate authorization before starting work. Certain professions, such as engineering, law, accounting, and psychology, are reserved exclusively for Panamanian nationals. Even with a work permit, foreign nationals are not allowed to work in these fields.

Types of Work Visas in Panama

Panama offers various work visas tailored to different employment scenarios. Selecting the appropriate visa type is essential to align with the nature of employment and the employee's qualifications.

Work Permit Application Process in Panama (Step-by-step)

In Panama, most foreign nationals need both an appropriate residence status and a work permit authorized by MITRADEL before they can legally perform services. The exact route depends on the immigration category (for example, Friendly Nations Visa, Professional Foreigner, or Temporary Worker), but the overall process follows similar stages.

• Step 1: The employer defines the role and confirms that hiring a foreign national complies with Panamanian labor quotas and sector rules. This usually involves checking the 10% and 15% foreign worker limits (where applicable) and confirming that the role and salary align with local standards.
• Step 2: The employer selects the appropriate immigration and work permit category with local counsel. Common options include the Friendly Nations Visa with an associated work permit, Temporary Residence for Specific Workers, or the Professional Foreigner regime for university graduates in non-reserved professions.
• Step 3: The employee gathers personal documentation. This typically includes a valid passport, passport photos, police clearance from the country of residence, degree or professional qualifications (for Professional Foreigner routes), CV, and any required translations and apostilles.
• Step 4: The employer compiles corporate documentation. This may include the company’s public registry certificate, business license, tax compliance certificates (paz y salvo), social security registration, and evidence of payroll and local operations to show the company is active and compliant.
• Step 5: The immigration attorney or authorized representative files the residence application with the National Immigration Service, where required. In many categories, the work permit can only be filed once the residence application is filed or an initial resolution is issued.
• Step 6: The employer (or attorney) files the work permit application with MITRADEL. The filing usually includes the employment contract, job description, salary details, supporting corporate documents, and proof that the immigration process is underway or approved, depending on the category.
• Step 7: Authorities review the application and may request additional information. During this period, the employee may receive provisional documentation allowing presence in Panama, but they must not work beyond what is expressly authorized until the work permit is granted.
• Step 8: Once approved, the work permit card is issued and the employee can work legally for the sponsoring employer. The company must then ensure registration with social security, correct payroll withholding, and tracking of permit and residence expiry dates for timely renewals.

Requirements and Eligibility for a Work Permit

Eligibility for a work permit in Panama depends on the specific immigration category, the employee’s qualifications, and the employer’s compliance status. Authorities focus on protecting the local labor market while still attracting needed foreign talent.

Common requirments inlcude:

• Valid immigration status or an in-process residence application: The foreign national usually must hold or be applying for a qualifying residence permit (for example, Friendly Nations Visa or Temporary Residence for Specific Workers) before a work permit can be issued.
• Compliant employer and active operations: The sponsoring company must be duly registered, tax-compliant, and enrolled with social security. Authorities may request evidence of real operations, such as payroll records or lease agreements.
• Respect of foreign worker quotas where applicable: Many companies must comply with limits on the percentage of foreign workers in their workforce. Exemptions or special regimes may apply in certain sectors or for highly qualified personnel.
• Relevant qualifications and experience: For categories like the Professional Foreigner Visa, the employee must hold a recognized university degree in a profession not reserved for Panamanian nationals and may need to show experience and professional registration where applicable.
• Clean criminal record and good conduct: Police clearances from the country of residence and sometimes from Panama are typically required to demonstrate that the applicant does not pose a security risk.
• Signed employment contract with local employer: A written employment contract under Panamanian law, specifying role, salary, and working conditions, is usually required as part of the work permit file.
• Payment of government fees and social security contributions: Employers must pay applicable filing fees and, once the permit is granted, ensure that social security and other mandatory contributions are correctly withheld and remitted.

Work Permit Processing Time in Panama

Processing times for work permits and related residence applications in Panama can vary significantly depending on the category, the workload of the authorities, and how complete the file is at submission. Seasonal peaks and policy changes can also affect timelines.

The typical processing time for a work permit or visa in Panama can vary depending on the specific immigration route, whether documents are correctly legalized and translated, and whether authorities request additional information. Generally, you can expect the following timelines:

• Temporary Residence or Work Permit: Around 2 to 4 months after all required documents are submitted and any initial immigration steps are completed, though complex cases may take longer.
• Permanent Residence: Approximately 6 to 12 months or longer, depending on the category, background checks, and the completeness of the supporting evidence.
• Short-Term Business or Work Visas: Typically 2 to 6 weeks once the application is filed, especially for business meetings, short technical assignments, or similar limited activities.

Expected Processing Timeline: Employer vs Employee

While every case is different, many employers plan around a staged timeline that separates corporate preparation from the employee’s personal documentation and government processing.

• Week 1: Employer confirms the role, selects the immigration strategy with local counsel, and starts gathering corporate documents and internal approvals.
• Week 2: Employee collects personal documents such as police clearances, degree certificates, and translations or apostilles, while the employer finalizes the employment contract.
• Week 3: Residence and, where possible, work permit applications are prepared, reviewed, and filed with the National Immigration Service and MITRADEL.
• Week 4: Authorities conduct initial review; additional questions or document requests may be issued, and provisional documentation may be provided to the employee.
• Weeks 5–8: Substantive review continues; assuming no major issues, initial immigration resolutions and work permit approvals may be issued within this period for straightforward cases.
• Weeks 9–12: Employee receives the work permit card and updated immigration ID, and the employer completes social security registration and onboarding steps.

Who Does What During Panama Work Permit Sponsorship?

• Employers are responsible for: Defining the role, confirming that hiring a foreign national complies with labor quotas, selecting the appropriate immigration and work permit route, preparing and submitting corporate documentation, paying government fees, and ensuring ongoing compliance with labor, tax, and social security rules.
• Employee is responsible for: Providing accurate personal information and documents, obtaining police clearances and legalized academic credentials, attending any required appointments or biometrics, maintaining a valid passport and immigration status, and complying with the specific terms of the work permit, including employer, role, and location.

Work Permit Renewal Periods in Panama

Many Panamanian work permits are initially granted for one to two years and can be renewed, sometimes leading to eligibility for permanent residence depending on the category. Employers should track both the work permit and underlying residence expiry dates, as renewals often require updated corporate compliance documents, a current employment contract, and proof of continued social security contributions.

Renewal applications are typically filed several months before expiry to avoid gaps in authorization, but practice may vary by category and over time. Because rules and processing standards can change, your company should confirm current renewal periods and documentary requirements with local counsel or directly with MITRADEL and the National Immigration Service before each renewal cycle.

What Are the Fees for a Work Permit or Visa in Panama?

The fees for work permits and visas in Panama vary based on the visa type and duration.

The above fees reflect government fees for work permits and visas in Panama, and is not associated with Playroll's fees for visa support services. Please contact our team for detailed information on our visa support services.

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Visa Requirements for Digital Nomads in Panama

Panama's Digital Nomad Visa is designed to attract remote workers employed by foreign companies. This visa allows eligible individuals to reside in Panama for up to 18 months while performing remote work.

To qualify for a Digital Nomad Visa, applicants must meet the following requirements:

 
• Proof of Employment: Evidence of employment with a company registered outside Panama or proof of business ownership outside Panama.
 
• Minimum Income Threshold: Applicants must demonstrate a minimum monthly income of $3,000 to ensure financial stability during their stay.
 
• Health Insurance Coverage: Applicants must have health insurance that covers medical expenses in Panama for the entire stay.
 
• Valid Passport: A passport with at least six months of validity remaining.

Employers should note that the Digital Nomad Visa permits remote work only for foreign companies and does not allow employment with Panamanian entities.

Employer Compliance & Obligations in Panama

Employing foreign nationals in Panama can present challenges for employers due to strict regulations and documentation requirements. Being aware of these challenges and proactively addressing them can simplify the hiring process.

 
• Navigating Complex Regulations: Panama's labor and immigration laws can be intricate. Employers should ensure they fully understand these regulations to avoid non-compliance.
 
• Employment Quotas: The limitation of hiring foreign employees to 10% of the workforce can be a constraint for companies with specialized needs.
 
• Document Preparation: Incomplete or incorrect documentation can lead to delays or rejections in the application process.

Tips for Employers:

 
• Engage Legal Expertise: Consulting with legal professionals who specialize in Panamanian labor and immigration law can help navigate the regulatory landscape effectively.
 
• Plan Ahead: Start the work permit application and renewal processes well in advance to accommodate potential delays.
 
• Maintain Compliance: Regularly review employment quotas and ensure all documentation is accurate and up-to-date.

Hire Global employees without hassle with an EOR solution

Expanding your workforce across international borders is an exciting step, but it can be a logistical nightmare to hire and pay employees in different countries. That’s the advantage of using a trusted Employer of Record like Playroll. They can:

• Handle your international payroll: An EOR will act as your payroll provider, paying your employees on your behalf in the local currency. The company will also have in-depth knowledge of local tax codes, regulatory practices, and everything else that goes into managing global payroll.
• Alleviate compliance concerns: Different countries each have their own federal and local laws governing employee payments. An EOR helps ensure that you are compliant with the unique set of laws for any country in which your company operates. This is extremely important since a compliance slip-up can result in heavy fines or even a lawsuit.
• Hire and pay international contractors: Sometimes a particular project or role doesn’t require hiring a full-time employee. An EOR gives employers the flexibility to also hire contractors as needed, and avoid the potential for misclassification under local labor law.