Obtaining legal work authorization is crucial for businesses expanding into Panama and for individuals looking to build careers there. Navigating the immigration landscape can feel complex, but understanding the process makes it much smoother.
Work authorization in Panama
Work visa and work authorization
A work visa allows foreign nationals to legally live and work in Panama. Work authorization is the government's approval that a foreign national is permitted to take up employment. Together, they ensure that employment is legally compliant under Panamanian law.
Importance for employers and employees
For employers, securing work authorization protects the company from fines, reputational damage, and legal complications. For employees, it provides peace of mind, ensuring their work and stay are legitimate and protected under Panamanian law.
Overview of Panama's visa categories
Panama offers several work visa types, including:
- Short-term work visas
- Temporary residency permits tied to employment
- Permanent residency through investment or special programs
- Special visas like the "Friendly Nations Visa" or "Self-Economic Solvency Visa"
Each category has unique eligibility criteria, benefits, and limitations.
How to apply for a work visa in Panama
Eligibility criteria for employers and employees
Employers must be registered entities in Panama and demonstrate the need for a foreign employee. Employees must meet educational, experience, and skill requirements relevant to the job offered.
Required documentation and application process
Typical documents include:
- Valid passport
- Employment offer letter
- Police background check
- Medical certificate
- Proof of professional qualifications
The application process involves submission through Panama's National Immigration Service (SNM).
Steps for employers sponsoring visas
Employers begin by verifying the labor market need and ensuring compliance with Panamanian labor laws. They then submit a sponsorship petition on behalf of the prospective employee. It is also the employer’s responsibility to assist employees in gathering and authenticating the necessary documentation. If immigration interviews are required, employers should provide appropriate support throughout the process.
Employer's role in obtaining work authorization
Steps to support employee visa applications
Employers play a hands-on role in:
- Drafting sponsorship letters
- Verifying employment contracts align with Panamanian standards
- Coordinating legal counsel for seamless filing
Common challenges and how to overcome them
- Language barriers. Hire bilingual legal advisors.
- Document authentication. Start the authentication process early.
- Long processing times. Plan timelines realistically to avoid project delays.
Timeline and cost considerations
On average, obtaining work authorization can take three to six months. Costs vary but typically include application fees, legal fees, and miscellaneous administrative expenses.
Visa and permit fees
Fees generally include:
- Government filing fee (~US$250)
- Visa issuance fee (~US$100)
- Professional service fees (varies)
Additional costs for employers and employees
Employers often cover:
- Relocation allowances
- Legal services
- Translation and notarization fees
Employees may also bear costs for background checks, medical exams, and document courier services.
Tax implications of working in Panama
Employees working in Panama are generally taxed on their Panamanian-source income. Panama offers a territorial tax system, meaning income earned abroad typically isn’t taxed locally.
Moving to Panama
Finding accommodation and services
Most expats choose areas like Panama City, Boquete, or Coronado for better amenities and infrastructure.
Cultural considerations
While English is spoken in business settings, Spanish is essential for day-to-day life. Language classes and cultural orientation programs ease the transition.
Opportunities for expats in Panama
Expats enjoy a lower cost of living, excellent healthcare options, and proximity to the U.S. According to the International Living Guide, Panama ranks as one of the top destinations for expats in 2025.
FAQ
What is the $5,000 Friendly Nations Visa?
The Friendly Nations Visa allows citizens from over 50 countries, including the U.S., to apply for permanent residency with a $5,000 bank deposit and a valid employment contract. It remains one of Panama's most popular immigration options.
Can Americans work in Panama?
Yes, Americans can legally work in Panama provided they secure a work visa. Programs like the Friendly Nations Visa streamline the process for U.S. citizens.
Can non-Friendly Nation citizens work in Panama?
Non-Friendly Nation citizens have pathways through skilled worker permits, investment visas, or sector-specific permits, like those for the Panama Pacifico Special Economic Area.
Tips and resources for a successful application
Applying for work authorization in Panama becomes smoother with preparation:
- Start early to accommodate document gathering and translation.
- Partner with experienced legal counsel who knows Panamanian immigration law.
- Communicate transparently with employees about timelines and responsibilities.
Learn more about global employment services that can help streamline the visa process.
Utilizing support from EOR providers
An Employer of Record (EOR) acts as the legal employer on behalf of another company. It handles employment responsibilities, including onboarding, payroll, compliance, and—crucially—securing legal work authorization.
How Velocity Global can help
Expanding into Panama requires trusted support. Velocity Global’s Employer of Record solution helps businesses manage the complex visa and employment process in Panama with ease, allowing companies to onboard talent faster while ensuring compliance with Panamanian law.
Contact us to learn more.
This information does not, and is not intended to, constitute legal or tax advice and is for general informational purposes only. The intent of this document is solely to provide general and preliminary information for private use. Do not rely on it as an alternative to legal, financial, taxation, or accountancy advice from an appropriately qualified professional. The content in this guide is provided “as is,” and no representations are made that the content is error-free.
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Topic:
Immigration + Relocation
