Stricter rules adopted for intracompany transfers

  • Panama
  • 06/30/2016
  • Berry Appleman & Leiden LLP

What is the change? Panama has adopted a regulation that imposes stricter criteria and procedures for companies applying for International Executive visas to send foreign nationals to work in the company’s Panama branch office.

What does the change mean? Among the new requirements, the minimum salary has been raised fivefold, the local office must undergo inspection before a visa application may be filed, and additional documentation must show that the company has existed for at least 10 years.

  • Implementation time frame: Immediate. The new rules were implemented June 20.
  • Visas/permits affected: International Executive visas.
  • Who is affected: Companies headquartered abroad sending foreign nationals to Panama to work in a branch office.
  • Impact on processing times: The changes create longer timelines due to additional document gathering, document preparation and inspections of the local office.
  • Business impact: The new rules are likely to limit the eligibility of foreign nationals sent to work in a local branch office and may also affect renewals for individuals currently holding these visas. Companies should plan for additional documentation requirements and increased costs in the form of a higher salary threshold.

Background: The General Director of Migration signed the resolution June 8 and it took effect June 20. International Executive visas are for foreign nationals employed by a company headquartered abroad and operating a local office in Panama. The key provisions of the resolution are:

  • The foreign national must remain on a foreign payroll and be paid a minimum of US$5,000 per month. Under previous regulations, the minimum was US$1,000 per month. The salary must be included in a work letter.
  • The local office or the headquarters abroad must have been in existence for at least 10 years, demonstrated by a certification issued by the public registry.
  • Before filing a visa application or a renewal application, the company’s local branch office must file a petition to undergo inspection by the National Immigration Service.
  • The visa petition must be accompanied by two years of financial statements of the foreign headquarters or the local office.

BAL Analysis: The rules make it significantly more challenging for multinational companies to send foreign employees to a branch office in Panama. Immigration authorities have indicated that they are working on a guidance to explain inspection procedures.

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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