Immigration Reforms Extend Validity of Some Work Permits, Create New Visa for U.S. Citizens, Among Other Changes

At a Glance

Key changes of recently implemented immigration reforms include:

Longer validity periods for work permits in the 10% quota, 15% quota, short-term technical worker, professional worker, and spouse of a Panamanian national categories.
Process changes for professional work permit applications that will result in shorter lead times.
The creation of a new visa category for U.S. citizens seeking to study, work, or make an investment in Panama.

The situation

Following recent elections, Panama’s outgoing government has published several executive decrees to effectuate immigration reforms that all take effect immediately. The changes include the following:

New Rule / Process	Prior Rule / Process	Impact
Changes for Existing Immigration Programs These changes apply to work permit applications filed on or after May 28
The validity period for work permits under either the 10% or the 15% quota is now two years.	The previous maximum validity period was one year.	Foreign nationals will no longer need to renew their work permit every year during the 10-year period before being eligible to apply for a permanent work permit, reducing immigration costs for employers and administrative burdens for foreign employees.
The validity period for work permits for foreign nationals married to a Panamanian national is now two years.	The previous maximum validity period was one year.
Foreign nationals hired temporarily to perform technical activities can obtain a work permit with a validity of up to one year.	Previously the work permit was issued for three months, renewable every three months up to one year.
Foreign nationals applying for Professional Work Permits can now submit their applications while their Professional Visa application is still pending.	The foreign national requires both the visa and the corresponding work permit to legally work in Panama. Previously, applicants could not submit their work permit application until after their visa was approved.	This should reduce the overall process by three to four months, compared to the previous process.
Foreign employees of aviation companies established in Panama can now obtain a two-year work permit, renewable for the same period, up to six years. However, foreign nationals in this category are no longer permitted to include non-married partners as dependents.	Previously the work permit was issued for five years, after which the foreign national was eligible for permanent residence. Permit holders could be accompanied by non-married partners.	These changes will make the aviation permit less attractive for employers and foreign nationals. They are intended to promote the hiring of local workers in the aviation industry.
Employers must employ at least three Panamanian workers in order to use the Marrakesh agreement, a special work program that allows companies with fewer than 10 employees to sponsor a single foreign worker.	Previously, companies had to employ only one Panamanian worker to use the program.	In practice, immigration and labor authorities have been informally enforcing this requirement since 2014, so the recent decree simply officializes the restriction.
New Permits
The reforms create a new work visa for United States citizens seeking to enter Panama to study, invest or perform temporary work, including technical work. The new visa will be valid for an initial stay of one year, which could be extended yearly, up to five years.	N/A	The impact of this new permit will remain uncertain until further regulations are released, but it would appear to allow U.S. citizens to work in Panama without the need of an additional work permit, which would offer a significantly simpler pathway for temporary intracompany transfers to Panama.
Foreign nationals who have obtained permanent residence can now obtain a new a work permit that is valid in three-year increments.	Permanent residence in Panama does not automatically confer work authorization, so a permanent resident must obtain authorization under an existing work permit category. In some cases, an individual might be unable to qualify under existing programs.	The impact of this new permit will remain uncertain until further regulations are released.

Background

Panamanians elected a new government earlier this month, and the outgoing government implemented these reforms for several reasons:

To fill legal voids and clarify differing interpretations of immigration and labor requirements;
To standardize processes between immigration and labor authorities, i.e. between entry visas and their corresponding work permits;
To improve relationships with the United States; and
To simplify immigration processes and attract foreign talent, while protecting Panama’s local labor market.

Looking ahead

While some of the recent reforms show a trend toward increasing restrictions to more broadly protect local works, taken together the reforms demonstrate the government’s continued effort to attract foreign investment and specialized labor into the country and to facilitate the transfer of knowledge to the Panamanian labor force.

At a high level, no broad changes are expected for Panama’s immigration system through the near future, but policy changes and reforms are likely after the new administration takes office on July 1, 2019. Fragomen will report on relevant developments.

This alert is for informational purposes only. If you have any questions, please contact the global immigration professional with whom you work at Fragomen or send an email to [email protected].

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