On February 15, 2017, the Ministry of Labor issued a new work permit requirement for foreigners with either a Friendly Nations or Professional Foreigner visa.
To apply for a work permit, those visa holders must now have an approved and stamped employment contract with a Panamanian company and be enrolled in the local payroll system.
This is a big change. Before you did not have to have a job in order to get a work permit, at least not for holders of a Friendly Nation visa.
This is a big set back for people who simply wanted to work in their own business. For instance, a foreigner can open a restaurant in Panama. But if you also want to wait tables at your restaurant, you need a work permit. (Please consult a good lawyer to get a full picture on how this new regulation may impact you.)
Of course, there are other ways to get a work permit.
The Friendly Nations visa was originally created in 2012 to attract more skilled workers to Panama. There simply were not enough skilled Panamanian workers to meet the need of local companies. To remedy this, government created the Friendly Nations visa and explicitly linked it to an expedited work permit process.
But the recent uproar over rising number of illegal workers in Panama has put a halt to that. Recent and significant changes to Panama Tourist visas have also been made to help stop the influx of foreigners working here illegally.
The Friendly Nations Visa itself doesn't give you the right to work, so it may not get caught up in this drive to curtail foreign workers. However, given the public sentiment, it may go away. If you were thinking of applying for one, it is better to apply sooner rather than later - or too late.
The official government site explains what you need for a work permit with the Friendly Nations Visa. However, what that site says or the exact wording of the law may not determine how your work permit application is treated. There is an interpretation that the law, and that interpretation is still in flux. But for now it seems that unless you had your work permit application in before March, you won't be getting one. That is, unless you have a job offer from a qualifying Panamanian company.
Find out more about the Friendly Nations Visa here
The good news is that Friendly Nations and Professional Foreigner visa holders will still not be considered in calculating a company’s foreign-to-local worker ratio. This is still true even though these visa holders must now have a local employment contract and be paid through a local payroll.
This means that those visa holders will still have an edge on getting a job with a local company since they won't impact the company's ratio numbers.
(FYI, Panamanian laws establish that only 10% of a company’s work force can be foreign (non-Panamanian); exceptions include if a worker is married to a Panamanian, or if the worker has lived in Panama for 10 or more years).
This easy link between the Friendly Nations visa and a work permit is an innocent victim of public outrage.
Panama has experienced an alarming rise in foreigners, on a tourist visa, who are working in Panama. It is illegal to work in Panama if you are on a tourist visa. Until very recently, these foreigners, mostly from other Latin American countries, only needed to hop over the border to renew their tourist visa. And then go back to their jobs.
Panama has now made changes to tourist visa regulations to eliminate this easy visa renewal border hop. It was a good move.
However, this work permit change seems like a knee jerk reaction to the public outrage over the illegal workers. Making it harder for holders of these 2 residency visas to get a work permit does not help eliminate illegal workers. Foreigners who apply for a work permit, obviously want to work legally. By further restricting the ability of foreigners to get a work permit, they only make it more tempting for them to work illegally in Panama.
The easiest way to make money while living in Panama is to earn it outside-of-Panama. You can work online in various capacities, work your job remotely from Panama, and other ways.
In a previous post, I wrote up some ideas on how to make money in Panama .
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