New Law to Bring Immigration and Other Benefits to Multinational Companies in the Manufacturing Industry

The situation

Effective December 1, 2020, a new immigration scheme in Panama called the Special Regime for the Establishment and Operation of Multinational Companies Providing Manufacturing Related Services (EMMA), will offer accreditation for eligible companies with favorable terms such as new visa categories for its foreign national employees, shorter processing for qualifying immigration applications, and tax and labor benefits.

A closer look

Details of the EMMA license include the below:

• Eligibility. Companies that operate in Panama must meet the following criteria to apply for an EMMA license:
  • the company must have commercial or financial activities or services in several countries;
  • or if operating in only one country, must have operations in several regions within the country and establish a branch, affiliate, subsidiary or associated company in Panama to carry out commercial transactions in the region.
  • the company must provide services to its headquarters or subsidiaries, affiliates or associated companies within the same corporate group from Panama; and
  • the services it provides from Panama are limited to those related to the manufacturing, assembly, maintenance, repair or remanufacture of products, machinery and equipment; the development or innovation of existing processes; and/or the storage and distribution of components or parts required for such services, among other related activities.
• Training of Panamanians. According to the law, EMMA companies will need to establish a teaching center in Panama and adopt training programs with universities or other educational centers to ensure foreign employees pass their skills to Panamanian workers. Additional details on this requirement are expected to be released within the next three months.
• New work visa categories. The law introduces two new work visa categories:
  • Visa for Temporary Workers of EMMA companies: For technicians entering Panama to provide operational or training services to the EMMA company for a renewable period of two years.
  • Visa for Permanent Workers of EMMA companies: For executives entering Panama to carry out administrative or executive functions for the EMMA company for a renewable period of five years.
  • Foreign nationals and their dependents will be eligible for permanent residence after working in any EMMA company in Panama for five years.
• Application process. Immigration applications sponsored by EMMA companies will be processed through a special processing desk within the Ministry of Commerce. Specific details on the application process are expected to be released within the next three months.
• Benefits for dependents. EMMA dependent visa holders will be able to apply for work authorization based on their Dependent Visa if eligible under an existing work permit category and through a streamlined application process, whereas dependents under most visa categories in Panama need to obtain a new visa in addition to a work permit to be able to work in Panama. 

 

Impact

More multinational companies in the manufacturing industry will be able to establish headquarters or operations in Panama and take advantage of special fast-track visas for its foreign national employees and flexible labor regulations.

Foreign nationals will have new options to work in Panama, a streamlined application process with faster processing times, a path to permanent residence in Panama, and tax and employment benefits while in the country.

Background

Panama has a wide array of special and preferential immigration program and economic areas, including the SEM (Sede de Empresa Multinacional) system for multinational companies establishing headquarters in Panama.

By way of this program, the Panamanian government is seeking to attract foreign investment to the country, generate jobs and facilitate the transfer of technology and knowledge to the country in light of the economic downturn resulting from the pandemic.

Looking ahead

Further details are expected as the Ministry of Commerce, the Ministry of Security and the National Immigration Service drafts and publishes the new EMMA regulations, including immigration legislation that will set forth details of the visa application process and requirements.  

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].