May 21 2021

Short-Term Remote Work Visa Introduced

Panama

At a glance

  • The Panamanian government has introduced a new remote work visa, called the “Short-Term Visa as Remote Worker”. The visa allows foreign nationals who are employed with a company outside Panama or who own a company operating outside of Panama to reside in and work remotely from Panama for up to nine months without requiring an additional work permit.
  • Eligible applicants must have a minimum annual income of USD 36,000 from sources outside of Panama, but do not require company sponsorship.
  • However, foreign nationals should be aware that the visa does not allow them to work for a local employer in Panama.
  • Although the visa has been officially implemented, the government may take a few days to begin processing these applications.

The situation

Panama has introduced the “Short-Term Visa as Remote Worker”, allowing foreign nationals who are employed with a company outside of Panama or who own a company operating outside of Panama to reside in and work remotely from Panama.

A closer look

  • Duration. The visa is valid for up to nine months with a one-time extension of an additional nine months.
  • Eligibility. Applicants must have a minimum annual income of USD 36,000 and must be able to prove the income comes from sources outside of Panama through a bank certification or bank statements.
  • Process. Applicants must enter Panama (with a Tourist Visa in the case of visa nationals), register with the immigration office, and then file the application while still in-country. It generally takes the government up to 30 days to process a short-term visa application.
  • Required documentation. Individuals working for a foreign company must also submit a letter of employment from their current employer whereas individuals who are self-employed must demonstrate ownership of a company registered outside of Panama and provide details of the company’s commercial activities, services, clients, and revenue. All applicants must also submit proof of health insurance, which must include coverage for the duration of their stay in Panama. All documents issued outside of Panama must be apostilled or legalized.
  • Dependents. Foreign nationals are not able to sponsor dependent family members under this visa.
  • Implementation. Although the visa has been officially implemented, the government may take a few days to begin processing these applications.  

Impact

  • Working remotely. The visa offers foreign nationals an option to work remotely from Panama, whereas other visa options in Panama either require company sponsorship or do not automatically confer work authorization.
  • Local work restricted. Visa holders cannot perform work for a local employer in Panama or provide any services to any person or entity carrying out business in Panama.

Background

  • Economic recovery. Due to the unprecedented flexibility in work location that has emerged from the COVID-19 pandemic, Panama has created new visa categories to attract visitors and to increase local economic activity. The remote work visa follows the introduction of the permanent residence category for foreign investors, which is expected to raise capital for the Panamanian economy.
  • Increase in remote work visas. Due to employers having to make required adjustments to their workforce during the COVID-19 pandemic, remote work has become increasingly popular among employees. As a result, at least 16 countries have implemented remote work visa programs in the last year, including countries in the Caribbean like Antigua and Barbuda, the Bahamas, Barbados, Bermuda, Cayman Islands, Curacao and Dominica.
  • Remote work visa warning. In countries where remote work is unregulated, workers and employers may unknowingly put themselves at risk of noncompliance with many aspects of the law, exposing them to possible fines or other penalties, depending on the country. Importantly, noncompliance with regulations could result in employers losing their rights to hire foreign labor. Additionally, this type of work arrangement may have employment or tax law impacts. Employers should also consider tax and labor law implications beyond the scope of immigration-related impacts as part of their decision-making process.

 Looking ahead

Additional details of the “Short-Term Visa as Remote Worker” are expected in the next few days as the National Immigration Service implements the new process.

As the non-traditional workforce grows and now that most countries are in the economic recovery phase of COVID-19, more governments are expected to update or implement remote work policies. Other countries in Latin America expected to implement remote work visa programs shortly, including Colombia and Costa Rica.

 

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].