Great news for citizens of India in our April 2018 immigration update!
April 4, 2018: the National Immigration Service of Panama rescinded the Authorised Visa to enter Panama as a tourist. Executive Decree 1113 establishes Indian nationals can apply for a stamped tourist visa. The Security Council of Panama does not need to review each application for a stamped visa.
As of June 1, Indian citizens may receive a multiple entry-exit visa for Panama for up to three (3) years. They must fulfill the requirements of the Consulate and Immigration Department and pass the necessary filters. For this purpose, Panama will assign employees of the Immgiration Department and the Ministry of Security to both of the Consulates in India. These additional employees will review and approve the stamped visa applications.
As mentioned, Panama has 2 Consulates in India: one in New Delhi and another in Mumbai. The contact details for Mumbai are available here: https://www.mire.gob.pa/index.php/es/asia/india/9144-mumbai. And here are the details for New Delhi: https://www.mire.gob.pa/index.php/en/india-direccion-y-horario
The costs of the stamped visa application are: US $50.00. (Payment does not guarantee that the application will be approved).
Once in Panama, it will be possible to apply for a residency permit. You still must fulfill the necessary requirements for immigration – such as economic solvency, investment options or 2nd passport application. Check the requirements before you arrive in Panama. Make sure you have all the necessary documentation with you, or plan a second trip to Panama to apply for the residency. You may want to check it out before you decide to move here.
We also have a new form available on our website, which will help us provide you with the information you need for your investment visa application.
Back in September, 2017, Panama already rescinded for Chinese citizens the requirement for Authorised Visas. Chinese citizens may now travel to Panama merely with a stamped visa also. As of last week, Panama is receiving flights directly from China into Tocumen International Airport.
Other restricted nationalities
April 2018 immigration update: other authorised visas news
For other restricted nationalities that usually require an Authorised visa, if they have residency in Europe, they do not require an Authorised Visa. However, their Schengen Visa or residency for Europe must be valid for no less than one year from the date they arrive in Panama (i.e. the visa needs to be valid for at least another year). Countries which require an Authorised Visa for Panama are those such as Cuba, Albania, Bahrein, Jordan, etc. (See the complete list here: http://www.atp.gob.pa/requisitos-de-entrada-panama).
Who needs a consent letter?
A consent letter is needed for under age children –
- travelling alone, or with
- one parent/guardian
- a group (such as sports/arts/competitions)
If you are travelling abroad (from Panama) with a child who was born in Panama (even if they are travelling on a foreign passport, and not their Panamanian passport) or you have residency in Panama, then you should go through the process (online as of the 1st of April, 2018) of getting a consent letter from the other parent/guardian of the child. This is especially important if you are travelling with a child that is not your own (nephew, neice, friend’s child).
As of April 1st, the system will change, so I will provide details of how to proceed at the moment (before April 1st) at the bottom of this article, and at the beginning I will deal with the new system that will come into play shortly.
You do not need a consent letter if both parents are travelling together with the child/children. In this case, at immigration you need to have at hand: passports, birth certificate (for the child/minor), and a little patience while they review/compare the passports with the birth certificate.
If they have a “cédula infantil”, you can replace the birth certificate with a copy of the cédula (both sides – because on the reverse are the names of the parents), and you need to also carry the original cédula infantil. They will probably keep the photocopy.
When do you need it?
My experience has been that the only time I need this letter is leaving Panama, not once I am internationally travelling. I usually make, however, two letters, because it is my experience that they KEEP the birth certificate and letter each time I leave the country. So, I make sure I have a second one with me for the rest of the trip, just in case. In Panama, this is a legal requirement: if you don’t have it, you will miss your flight.
Also, I would suggest, if you have a foreign birth certificate, that you make numerous notarized copies of it, so that you don’t give them your original each time. For a Panamanian child, the cost of a birth certificate is $3.00 and can usually be obtained from El Rey. Otherwise, you need to get it from the Electoral Tribunal.
What do you need for the online consent letter?
You need to include with the online application the following documents (NOTE PDF format, maximum 10MB)
- Child’s passport or cédula
- Passport or cédula for EACH parent/guardian
- Passport of the third party that is travelling with the client, if they are not travelling with a parent/guardian
Instructions for how to proceed:
First, you need to sign into the portal: Migración en Línea and then go to “solicitudes”. This will look like this:
And, as you can guess, you need to click on the image of the parents and child for travelling abroad and the online consent letter.
This will open you up to the instructions, which state (in Spanish, of course):
Pulse el botón “LLENAR SOLICITUD” que aparece abajo en esta página. a. Coloque toda la información que se solicita en el formulario. b. Debe adjuntar a su solicitud todos los documentos requeridos escaneados en formato PDF con un tamaño máximo de 10MB.
El sistema le emitirá al completar el formulario un documento con el Número de Solicitud.
Con el Número de Solicitud impreso debe proceder a notariar dicho documento.
What this says is: Push below on the button that says “LLENAR SOLICITUD” (complete application), and complete the information requested in the form. Then attach to the application the documents requested in PDF format, with a maximum size of 10MB.
The system will then issue a completed form which has a Request Number. With this printed request number, you should go to the notary office to get it notarized.
Step one of the form is quite easy and straight forward. You complete the details of the minor: name(s), last name(s), nationality, cédula or passport number, and gender. Then in the second section, you complete the details of the trip or holiday: destination, type of transport (air, sea or land), date they will leave the country, date they return to the country, person who will be accompanying them, and your email address.
Then simply press “siguiente” / Next.
Here, you complete the details of the father and mother (or guardians). Once again, this is pretty simple: name(s), surname(s), nationality, cédula or passport number, relationship with the child (father, mother, guardian) and your gender (male/female). And then simply press Next/siguiente.
Upload your PDF file documents, and then press “send/ENVIAR”. At that stage, you should get a document to print out with “Número de Solicitud”, which is your Request Number. You take this print out to the Notary, and they will go online and verify the information submitted, and then notarise it. This is then what you need for the airport (they may, or may not, ask for it, but you should have it with you).
Who needs to go to the Notary office?
- Minor – travelling alone, with friends, a group or another family member: both parents
- Minor travelling with one parent/guardian – the consenting parent – the one authorizing the other to travel alone with the child.
What should you take to the Notary office?
- The form/print out from the system
- The passport(s)/cédula(s) for each person
In case you need more information:
Contact Joan Villanueva in our office, or maybe just watch this video from Immigration regarding this process (and don’t worry that you can’t understand the words, they are pretty self-explanatory):
I’m leaving before April 1st – what do I do?
In that case, you should prepare the usual consent letter, have it signed by the parent/guardian that is NOT travelling, get it notarised, and take it to the airport with you (and don’t forget the birth certificate).
While you don’t need a personal bank account in Panama to live here, it may lower transaction prices and make paying bills easier.
Reasons to set up a personal bank account
Many expats have differing views on whether or not you need to open a personal bank account. If you have an account in USD, it may make little difference in the bank charges. In other currencies, the bank charges could be high and might be reason enough to set up your account here.
Another reason for setting up a personal bank account in Panama is to apply for the friendly nations visa. One requirement is that you have a personal account with no less than a mid-four figure balance. You should deposit at least USD$5,000 in the account, then. The friendly nations visa will provide you with permanent residency, It also provides a work permit (depending on which application you make). And it allows you to eventually naturalize as a Panamanian (if having a second passport is your goal).
Paying bills online: many of the banks will allow you to pay bills online, although this is not for all utilities companies. Some still requirement payment at their office or through an approved intermediary. You can also pay your personal taxes online through some banks (such as income tax or property taxes).
Requirements: personal bank account
The requirements vary slightly from bank to bank. Nonetheless, the general requirements are the same:
- Complete the bank account application forms, all of them
- Your passport (the bank will make its own copy)
- 2nd ID – such as driver’s license
- Professional reference letter – such as from a lawyer / accountant / company you have done work with
- Banking reference – they are looking for proof of a banking relationship of more than 2-3 years
- If you don’t have a “bank account” but have a credit union account, this will usually work
- They may accept an investment account letter instead of a “bank”
- Minimum opening deposit: $1,000.00 (some banks do require less)
- Minimum balance:
- checking: usually somewhere between $250.00 to $1,000.00
- savings: usually somewhere between $500.00 to $1,000.00
The forms ask for proof of source of funds: the bank is interested in knowing how you support yourself financially and where they should expect to receive income from.
If you are applying for your friendly nations visa through our office, we would be happy to accompany you to the bank for your initial interview.
Choosing a bank:
Consider the following when choosing where to apply for your personal bank account:
- Where you live and branches that you have close by
- Online banking – which ones have their website in English
- What online banking services do they offer?
- Do you / your friend / the company you work for already have a relationship with the bank?
- Expat opinions regarding customer service – you will be able to find complaints against every bank, but some are worse than others
- What is their online security platform? Will you need a widget in order to pay bills and make transfers?
- Number of ATM machines available in your area of town if you like to get cash out
For more information, do not hesitate to contact our office for assistance.
Panama Maid: a guide & FAQ
So, I have a maid / nanny / housekeeper (yes all-in-one) and I’ve been living back in Panama for a little over 20 years now. I get lots of questions about do’s and don’ts: since most of our maids, nannies and housekeepers are not from Panama. They are from Nicaragua, Colombia, Jamaica, Dominican Republic and some even from Venezuela. Some of the things that I am going to mention will not apply to your Panama maid, although most of them will. I have tried to organize this as a guide from the start of the relationship to ending it. I hope that works for you! Throughout, I have used the term “maid” to cover nanny/ housekeeper / cleaning lady, since it’s the shortest word.
And one more thing – I’m telling you the legally compliant way. Do as I say, not as
I do (well, your Panamanian neighbor does)! They mean well, but they won’t get caught.
hiring process – live-in versus travelling – referrals & agencies – contracts – social security – immigration status – labor law – trial period – remuneration – working hours – holidays – décimo – healthcare – maternity – termination – firing
The process for finding a maid in Panama can be daunting, especially if you have young children and will be leaving them to be cared for. With older children, at least you know they can talk to you and tell you what is going on: but with young ones it is somewhat scary.
The first step is to work out “what do I need?”. Take into account what your kids’ needs are (if applicable), what you want the maid to take care of, and your working hours:
- Do you want her to cook? Oh, and when you ask if she can cook – make sure you ask what kind of cooking she does? You may not want just rice and beans!
- Will she clean?
- Does she need to do the heavy cleaning, like spring cleaning? Windows?
- Is child care involved?
- What time does your child need to be ready for school or the bus?
- Are you able to get home from work at the same time every day?
- What about your social life? Do you need a baby-sitter on weeknights?
- Working late?
- Does she iron? If she does, what are her conditions? Some maids iron as part of the job, some charge “per shirt” or a weekly additional amount for ironing.
- Does she understand the symbols on the clothes tags, for washing the clothes? (Yes – because if she doesn’t, you need to teach her!)
- Will she walk the dog?
- Do you have a cat or dog? I had a maid that was allergic to cats – she was awesome, but we had to part ways. Lesson learned: always ask about allergies!
What to look for:
My experiences have varied over the years: my cleaning lady has been with me almost 20 years. She is not awesome at cleaning, but she is reliable and trustworthy. That is priceless. When I got more staff for my home, she only stayed cleaning my office: but she has keys to the place.
I had a fabulous housekeeper for years that was more of a PA than a housekeeper, but then her husband fell ill. I lost my wife that day! I loved having a wife! She took care of the dry-cleaning (dropping it off and picking it up), she organised painters, plumbers, air-conditioning maintenance. she watched the cooking channel and then bought groceries according to what she was going to try cooking. Irreplaceable! Of course, I didn’t know I had a wife until I no longer had her as my housekeeper. I now know: I need a wife, not a housekeeper!
Live-in versus Travelling
A Panamanian maid will probably not want to live in, as her family is “close” and she wants to live with them. But remember the traffic and commute times when you consider live-in versus someone travelling. For them to arrive at 7.00 a.m. each morning, what time will they have to leave home? What time will they leave to get home every afternoon or evening?
It is easier to get a young foreign girl (by young I mean 22 – 29) to live in, but this also has possible setbacks. My experience with younger maids has been great at the beginning (1-2 years), but then they get a boyfriend and want to settle down. Then they no longer want to live-in. And I need a live-in at this moment of my life. When I was single, and even when I was married without a child, having a maid that arrived in the morning and then left mid-afternoon was fine (say 7 am to 3 pm).
With a child, all of that changes. I am a working mom. Sometimes I work till 7.00, or other times I get home early and I take my work home with me: I am there, but I’m not “there”. I am studying part time. I volunteer many hours at Church and some fundraisers for charities. So now I have a 40-something year old live-in maid. She doesn’t run as fast as a younger girl (and so if little miss almost-4 takes off running, I have to run!). On the other hand, she cooks well, she is happy to live in, and she is loving and sweet. Okay, I admit it! She coddles my little girl!
The Práctica: Professional Services or Employee?
Many consider that the práctica (the new-born nurse that you might get for your first month, 3 months or 6 months) is professional services, rather than an employee. As professional services, she is not entitled to receive: holiday pay, décimo, or liquidation at the end of the period that she was hired for. As an employee for a contract for a specified period of time, she is entitled to all those things. Personally, I view the práctica as an employee on a short-term contract. I know that many disagree with me on this, as it increases the cost (by about 40% if you did social security, etc.). If she has her own Social Security and she is paying in as an “independiente” that changes the picture – and I would agree that she is professional services. But the 2-pronged rule in employment law is:
- is she economically dependent? Yes – she is only working for you those months
- is she subject to your instructions and telling her how you want the job done? I believe so – I doubt she’s looking after your newborn without you “supervising” how you want it done. It may be true that she knows more than you and is providing you with an education while she is at it, but I view the fact that she has to work X hours and be at your home and do it “your way” as meaning that you are in charge, rather than her.
The cleaning lady:
There was a time I just had someone come in twice a week for cleaning! She wasn’t considered to be an “employee”, but rather providing professional services. You will pay a little more for this, but then most of the things that I mention in the article – you can ignore! If she’s working 2 days a week, she is not an employee. The fine line is whether she works 3 days a week: if you provide at least half of her income, she is considered to be economically dependent upon you! Is she working 4 days a week for someone else? If she loses that job, then you are her primary source of income and she has “economic dependence”.
Referrals & Agencies:
My first choice is always referrals: from a friend, a family member of another maid that I know, or from other mothers. All of my maids have come referred from a friend or their maid. But there are other sources: Facebook groups – I like Panama Mamas. Expats in Panama is another one, but it caters to more general questions. There are also placement agencies, such as Agencia domestica Panama and Maids & Nannies.
Once you have identified your needs and the right person, it’s time to discuss contracts for your Panama maid. Even if she’s not Panamanian, still write a contract! If you don’t have a written contract: you have a verbal contract. Panama Labor Law does not leave a vacuum – there was a contract, it was not in writing. And the worst part is: the employee’s word has more weight than the employers! What was agreed? How was it agreed? Put it in writing. And yes, it should be in Spanish. And yes, ideally, prepared or reviewed by someone (a lawyer or labor law expert) that actually knows labor contracts. I know – your neighbor has a model contract! You can probably also ask for one at the Ministerio de Trabajo.
Basic contract requirements:
The very basic requirements of the contract are:
- Parties: name, nationality, age, male/female, civil status, domicile and cédula or passport number
- Worker’s dependents: name of those that live and depend on the worker
- Type of service offered
- Place where the worker is to show up for work
- Length of the contract: definite (period of time) or indefinite
- Working hours and the type of “shifts” – if applicable
- Salary – how it will be paid, on what date and where it will be paid
- Place and date of signing the contract
- Signatures of the parties
Register your contract with the Ministry of Labor.
As well as the contract, consider registering her at Social Security. For that, you (the employer) must register. You can do this without a lawyer, but you might want a translator or a good taxi driver for this. I had a great guy for this until about 3 years ago, when he passed away unexpectedly. I’ve never actually found someone to replace him. He was awesome – knew where all the government offices were, had a basic idea of the forms, and could take you through it without it costing you an arm and a leg! But, you could always ask your lawyer or law firm to help you with this. Which branch to go to? The one that is easiest for you to get to in rush hour when you forgot the paperwork was due “today” – there’s going to be a day that happens!
The benefit of registering your Panama maid at CSS (Caja de Seguro Social) is that you get rid of a couple of risks:
- healthcare – you are no longer responsible for her healthcare – she can go to CSS;
- pregnant? You are not responsible for her maternity leave, check ups or if it’s a high-risk pregnancy;
- if she has an accident at work – CSS covers it completely (the medical and the time she’s off work after the first 18 days. You cover the first 18 days of sick leave in a year.)
And as an added benefit: she will (if it is still around when she reaches retirement age) get a pension. Even if your maid is an illegal immigrant, and they do not have their work permit, it is still possible to register them at Social Security and put them into that system.
On the down-side: you have to go in and register yourself and you have to register your maid. You have to calculate and pay the SS deductions each month – employer and employee contributions, which you withhold from the salary and you pay in (there is contribution from you and one from her), and each month you have to make the payment, complete the online forms in the system, and present. You also have to pick up her “paz y salvo” each month from CSS (so pick the most convenient office to where you live and/or work). It’s not the most user-friendly system I have encountered – and I admit I have my office book-keeper take care of it for me, because I didn’t want to invest my time working it out!
The system is called SIPE: http://www.css.gob.pa/sipe/. This is where you sign up as an employer: http://www.css.gob.pa/sipe/afiliacion.html – and, of course, it’s ALL in Spanish! And this is where you advise that you have a new employee starting: http://www.css.gob.pa/sipe/avisodeentrada.html. They have a whole section on “e-learning” – not me! I gave this to my book-keeper and told her to let me know what personal details she needed from me!
If you didn’t hire a Panama maid, what is the legal status of your maid? If she already has a visa, what kind of visa does she have? The two most common visas you will find are:
- doméstica (the actual visa for maids)
- Crisol de Razas
Unfortunately, the Crisol de Razas program appears to no longer be available, unless they got in before the 31st of May 2017 with this first application. If they are already in the system, they will be allowed to continue, but the Immigration Office is not accepting any new applications for those not already registered. Some people with Crizol de Razas were able to get a 10-year visa under the program, upon renewal. That is no longer available to new applicants, but you may still find someone that has that status. Most people have a 2-year visa, but they are able to renew.
Visa de Doméstica:
If they need to apply for the doméstica visa, then YOU the employer, will need to provide some documents to the immigration department. The maid will need to complete the form from the Panama Tramita site. The basic requirements of this visa are published in Gaceta 26104.
- This visa requires a $500.00 bond, plus a $250.00 fee to the Immigration Department.
- The return ticket to their home country must be presented.
- A utility bill for your home must be included.
- The employer must provide their paz y salvo, which is certificate of Good Standing from the DGI (Dirección General de Ingresos) – Tax Department – showing that you are in good standing.
- Proof that you have already registered with the CSS (Social Security).
- An employment letter from you to her, offering her the employment.
This visa is only valid for 2 years; then she must renew it. She needs a lawyer for this visa.
Once you have your Panama maid, then these basic “rules” apply as to what you can and cannot expect.
The Labor Code applies to all maids, irrespective of their legal status (illegally in the country or not). Even if they are an illegal immigrant, they can go to the Ministry of Labor to report you. So, comply with minimum wage, holiday pay, décimo pay, and the payment of public holidays, etc. That said, a special section of the Labor Code is dedicated specifically to “domésticas”. The important section is Article 231.
The Code considers that the first two weeks are a trial period. This differs from normal labour contracts, which consider that there is a 3-month trial period. If you terminate after this first 2-week trial period (and it’s not a justified termination), you will give 30-days notice (or pay out the 30-day notice).
I typically spend the first week at home with her, and then the second week I show up at any time unexpectedly during the day to check on her. And I still do that months and years later!
Minimum salary for a maid in Panama City is $250.00/month. Good luck finding anyone willing to work for that! The typical monthly salaries that I hear are above $375.00, and go as high as $700.00/month. You will probably get what you pay for (but choose well).
The Labor Code explicitly states that “unless otherwise agreed” it is presumed that the remuneration package includes (in addition to the payment of money): food and board. The food must be healthy, abundant and nutritious; the room must be comfortable and hygienic.
I know some people that offer their maids: $XXX in salary plus $20.00/week for food (the maid then buys what she wants). Others buy the food that the maid will eat, but it is not what the family eats. I have always had the custom that the maid eats what she cooks for us (because she will sit and eat with my daughter if I am not home), unless she really wants “something from home”, in which case she may cook something separate for herself. I usually ask what types of coffee, bread, beans and rice she likes, and buy those for her (because they usually are different from what I like).
Loans or Advances:
Panama’s Labor Law prohibits that you deduct any money loaned to an employee from their liquidation pay. So, if you are going to loan them money: how and when are you going to get repaid?
- One option: don’t loan them money.
- Second option: don’t loan them money, but give them an advance on their next month’s salary (and document that this is an advance). Or advance them their décimo.
- Or ask them to come and work extra for you on the weekends and spring-clean your house.
According to the Labor Code, the Panama maid receives a “rest period” from 9.00 p.m. to 6.00 a.m. I realise, if you have a newborn, everyone in the house may wake up with the baby and colic! But you should not require her to serve and cater a party till 2.00 a.m., and then be up at 6.00 to get breakfast on the table for the kids.
She also receives her “weekly break” and “annual holidays” which are to be paid. She is entitled to paid day-off on public holidays or national days of mourning (such as when an ex-President dies). Nevertheless, you can ask her to work this public holiday, as long as you pay a surcharge of 100% on a normal day’s pay.
Every week she is entitled to one day off – “rest day” or “weekly break”. The law describes this as “descanso semanal“. Usually, this would be Sunday, but you could agree with her any day of the week off. It is supposed to be the same day each week. Customarily, however, they get a day and a half off each week: leaving Saturday afternoon (1pm, 3pm, 4pm – whatever you have agreed upon), and returning Monday morning (7am). I had one maid that never seemed to make it at 7am Monday morning, and so I changed her day off, so that she left on Friday afternoon and came back Sunday morning. Problem solved! It no longer mattered if she was an hour late.
In Panama, you should consider the public holidays. Here is an example of the 2017 public holidays: http://www.cuandoenelmundo.com/calendario/panama/2017. Those dates marked in red are actual public holidays. those in blue are days that people usually don’t work (banking holidays or employees work the hours beforehand in order to take them off). A Panama maid is going to expect to have off the days in red, or be paid overtime (extra 100%) for that day.
Additionally, your maid is entitled to one month’s holiday per year. This is one month to go home to her family (probably in the interior or possibly overseas). You may choose to break this up into two 2-week holidays: giving her time off after the first 5.5 months, and then another 2-week holiday at the end of her work year. Note: It doesn’t have to be exactly at the end of the year. It could be at 11 months, 12 months or 13 months. But she has to get it!
We’re going away on holiday:
What if you go away on holiday? Then what? You have a couple of choices:
- take her with you
- leave her at home to look after the dog
- send her on holiday
If you choose option #2, you still have to pay her the complete salary she is due, as if she was doing everything (unless you can reach an agreement of some sort with her that she will do some side jobs while you are away for a friend of yours, and they will pay her). But the reality is, she’s still your employee while you are away on holiday.
Décimo (décimotercer mes):
This is a particularity of Panamanian and Central American law that I struggled for a long time to understand and get my head around. Basically: you pay employees a monthly wage, which covers 12 months. But if you look at the year as weeks, and periods of 4 weeks, there are 13 months in the year. And so the
crazy (sorry, I meant to say difficult to understand) system here in Panama is that throughout the year (April 15, August 15 & December 15) you pay that “missing” month in 3 quotas. Often, the April 15 payment is made earlier in the year (after Carnavales, before the start of the school year). You are not required to pay this early, but in my office we do, because of the many employees with children starting school.
It is your responsibility to sign up and sign your Panama maid up for Social Security coverage. This will cover her healthcare needs. If you don’t sign her up for CSS, then you are responsible for her healthcare, and if she has an accident at work, you are responsible for the hospital bills and well as paying her throughout the recovery time!
You are not required to provide her with private health insurance, dental coverage (also provided at CSS) or private healthcare.
Her mobile phone:
Oh, this one is difficult: ask any office manager! I connected my maid’s phone to my house wifi (setting up a Guest user), so that I can control my bandwidth usage. She listens to music all morning while cleaning. I have asked her NOT to use the headset when my daughter is home, as I want her paying attention to my daughter, not on the phone. And with this maid, I have not had any problems. But I have had problems in the past with maids and their mobile phones! Sometimes, there is nothing to do, but let them go – some things just will not be corrected!
One protection offered by Panama’s Labor Code is the “fuero de maternidad“: Articles 105-116 of the Labor Code. This means that for the entire 9 months of the pregnancy and for 1 year after giving birth, you can only terminate the relationship through a justified firing (with cause), and it has to be approved by the Ministry of Labor. Buy her contraceptives! You can’t force her to take them, but you can make them available to her.
There are a number of scenarios that can result in termination: resignation, firing (justified) or simply unjustified termination.
If she resigns, she is still entitled to:
- salary for days worked this fortnight
- holiday pay outstanding
- décimo outstanding
- prima de antigüedad
Firing (with cause)
If you fire her, with cause (i.e. you caught her red-handed stealing or one of the causes indicated in Article 213, then you are required to give her only the 4 payments indicated above:
- salary for days worked this fortnight
- holiday pay outstanding
- décimo outstanding
- prima de antigüedad
You do not need to pay any notice or indemnification.
Termination (without cause)
If you don’t have documented (and well documented – written amonestations), then the best way to terminate the relationship is just to pay your Panama maid her dues, and let her go!
You will have to pay:
- salary for days worked this fortnight
- holiday pay outstanding
- décimo outstanding
- prima de antigüedad
- 30 days notice
- the indemnity identified in Article 231, subsection 4 of the Labor Code.
Other causes of termination:
The Labor Code also provides another ground for termination, in article 231 that is NOT available for normal workers: sickness for more than 4 weeks which makes them unable to go to work. You are only required to pay the 1 month of incapacity (sick leave), and then the indemnity mentioned in subsection 7 of Article 231.
My favorite form of termination is “Mutuo Acuerdo” – a written agreement between the parties to terminate the employment relationship. This gets rid of any “he said – she said” arguments or whether or not it is justified or not. Even with this agreement, you still have to pay the first 4 items listed above:
- salary for days worked this fortnight
- holiday pay outstanding
- décimo outstanding
- prima de antigüedad
But, depending on why you are letting the person go, you can then decide what you are going to offer regarding the 30-day notice and indemnification for termination.
In the case of any doubt, ask for a lawyer.
Common Relocation Questions: Panama
We often hear relocation questions from clients who are moving to Panama for the first time and getting settled in to their new homes. I share a couple of them here to help you get an idea of what is easy and what is hard when you are relocating.
Bank account – Driver’s License – Utilities
Relocation Questions: Opening a bank account
I went to a local Panamanian Bank the other day, having just arrived in Panama. They would not allow me to open anything because I didn’t have a banking reference letter or a letter from an employer here in Panama. Can I open a bank account without a banking reference?
Panamanian banks, even before the Panama Papers, made it difficult for foreigners to open bank accounts here. Ideally, you want to be introduced to the bank by someone (your lawyer, your employer, a business associate). If you are applying for residency, let the bank know: this will make it easier to open the account. If you already have residency, make sure you take your immigration card or cédula with you.
Know Your Client: KYC
Banks here are required to complete their “Know Your Client” procedures, and all banks have a compliance officer that reviews and approves accounts. This is not the customer service representative that you meet. You will not meet the compliance person (that would hinder the purpose of having compliance). So, you need to have all the papers that they need to tick the boxes. Those papers include:
- Your passport
- 2nd ID of some kind
- Utility bill – that shows you have a place in Panama
- Professional reference – preferrably two – from lawyers, accountants, insurance brokers, realtors. No more than 3 months old.
- Banking references – no more than 3 months old; a relationship longer than 2 years (ideally)
And then you need patience: sit down and complete all the bank forms. Follow up on the account opening. Patience.
Can you open an account without a banking reference? Yes, if
- You are 18 years old or just recently became an adult
- Your employer refers you to the bank to open your payroll account
- A business associate or family member introduces you to the bank as a first time account holder. This one will only work in a couple of banks and in limited cases.
Relocation Questions: Driver’s License
I heard that my driver’s license is only valid for 90 days after I arrive in Panama, but my tourist visa is valid for 180 days? What can I do?
That is right: your foreign driver’s license is only valid for 90 days, but your tourist visa for 180 days. If you are living here on the tourist visa, and driving, then you either leave every 90 days or apply for residency. Panama does not offer a driver’s license to non-residents.
I am applying for my residency and would like to get my Panamanian driver’s license, what do I need to do?
Once you have your residency approved, you may apply for your driver’s license. You will need to have your foreign license (copy) certified by your Consulate. The Panamanian Ministry of Foreign Affairs then needs to stamp this copy, to make it valid for use here in Panama. The documents you need to take to Sertracen are:
- Your driver’s license + photocopy
- The copy stamped by the Consulate and Foreign Affairs
- Immigration Card – original + copy
- Passport – original + copy
- Blood test – blood type – laboratory approved by ATTT (if this is already printed on your driver’s license, not required)
- Do sight and hearing tests at Sertracen (wear your glasses and/or hearing aids, if applicable)
- Pay $40.00 at Sertracen – includes sight and hearing test
Be in good standing with ATTT – i.e. not have any tickets.
Another one of the relocation questions that we get is regarding utilities:
How hard is it to get your home connected to utilities: water, electricity, phone & internet?
This depends on where you are going to live in Panama:
Most water in Panama is provided by IDAAN, the national water institute. This applies to most small towns and urban areas. However, you need to check with people who live in the area how often the water gets cut off. You might want to buy a water tank to have a back-up system for your home. It is quite common in the rural areas, during the dry season, to only have water a couple of hours each day. Water is rationed, and you will want to have your personal tank for water storage.
In some remote areas, you will need to have your own well and filter system.
Most of the country of Panama is on an electrical grid and has electricity available, without having to go to solar power or diesel generators. However, I know of a couple of areas (Bocas del Toro, for example) that do not have electricity and where hotels or hostals rely on their own generators or solor power systems for their electricity.
You definitely need UPS batteries on all electronic equipment in Panama becuase of the electricity spikes. While theoretically the electric company is meant to replace electronics that get blown because of these spikes, the reality is that we don’t see this happening. Get prevention!
Phone & Internet:
There is phone and internet coverage in most of the country, although quality may be dodgy. I had clients in Bocas that struggled with phone coverage, because a hill blocked the cellphone tower. I have also been in parts of Chiriqui where you need to walk to the top of “that” hill in order to be able to make a phone call. But both of these locations where quite “off the grid”. You have a choice in Panama of Cable & Wireless (MasMóvil), Claro, Movistar and Digicel. Depending on which part of Panama (country) you are in, one provider may have better coverage than another.
For internet connection, there is limited fiber optics in some parts of Panama City. If you require high speed internet, you definitely want to check out availability. Speak with other expats regarding their experiences before deciding on a location. But if you are only looking for internet for personal use or limited office use, coverage is reliable in most areas. Please note: when there is a thunder storm we often have to restart our modem.
If you live in Panama City, and you are moving into an apartment, it should already have water connected. If it is a rental, it may already have the electricity connected, you need to check with the realtor. In Panama City you have numerous options for internet and phone, but you should check regarding the quality in your area. As I mentioned above, in some parts of Panama City, you will have fiber optics available.
Coronado & Beaches:
In Coronado, most of the apartment buildings have emergency water tanks, but you should check before you rent or buy. The electricity in Coronado has a wide coverage, but you may want a generator if you want 24-hour air-conditioning.
Pedasi & Las Tablas
You will want to make sure you have water storage tanks, as this area of Panama is known as the “dry belt”. There is water, but it will get rationed in the dry season. Internet: I am not sure of the quality, so you should ask expats that live in the area.
Boquete has a great supply of water, so this never seems to be a problem. You may suffer power outages due to rain storms, so if having electricity 24-hours a day is important to you, you will want to have a backup system. You should ask neighbours which internet provider is the best.
Please contact Joan Villanueva for more information regarding relocating to Panama.
Immigration Update: June 2017
Of particular note, in this immigration update is that the Friendly Nations visa is available to immigrants from Europe, North America and other countries listed. There have been no major changes in the requirements for work permits under Friendly Nations. We have been hearing a lot in the news regarding the change to 90 tourist permits for citizens of Venezuela, Colombia & Nicaragua, but the updates at immigration do not affect European or North American citizens.
In recent years, Panama has been careful with immigration policies, to not be seen as favoring or discriminating against a particular nationality. Nevertheless, the current climate in the region is pushing a wave of immigrants into Panama. And there has been a “push back” against this wave. Panama is not, obviously, the only country where refugees and illegal immigrants are being rejected. Many European nations have made it clear that they are not willing to welcome many newcomers, despite obvious crises pushing the waves of refugees and immigrants to seek safe havens.
The work permit tied to the Friendly Nations visa is very simple to apply for. After applying for immigration status, it is necessary to apply separately to the Ministry of Labour for this permit. The requirements to be met at the Ministry of Labour are:
- Power of attorney (to the lawyer) and application
- Certified copy of the immigration resolution, granting residency
- Immigration Status certification
- Certified copy of the immigration card – Permanent residency
- 4 passport photos
Joan Villanueva is available for more information regarding this application process.
Back in 2016 and in early 2017, there was a lot of debate on the issue of work permits. Panamanians complained that too many work permits being granted to foreigners under the friendly nations visa program. The complaints were based on the fact that Friendly Nations work permits appeared to bypass the rules on 10% rules (no more than 10% of employees in a company should be foreigners) or 15% for certain professions or executives. See, for example:
- Panamá: Cambiarían reglas de permisos de trabajo
- Restringen permisos de trabajo de países amigos y profesional extranjero en Panamá (comunicado)
- In particular, this latter article indicated that the 10% rule would have to be complied with even in the event that the applicant was applying under the friendly nations visa.
However, this has not be put into effect so far.
Technology and systemization is being implemented in many parts of our lives, and Panama’s immigration department is finally trying to catch up with their new online application system. They expect that this new system (Migración en Línea) will eliminate bottle-necks and long waits. Applicants may remember arriving at immigration at 5.00 a.m. to get a number for the queue. It will also allow their staff to work more on reviewing the paperwork rather than receiving the documents. Over time the immigration office will be adding to the breadth of applications which can be made online.
Immigration office press release:
In a press release on April 5, 2017, they advised that as of the 15th of April, 2017, it is no longer possible to register (for the first time as a foreigner in Panama) in person at the immigration department (even with a lawyer). Applicants must now complete the application online and submit the documentation electronically. The applicant pays at Immigration still, but it is anticipated that eventually they will move towards an electronic payment system. When rolling out the new system, the immigration office indicated that the steps to follow for registration were:
- complete online registration
- pay at the immigration office
- present the payment receipt at “certifications” and complete the document verification
- you will receive an email update of the status.
As might be expected with any new system, it has not worked perfectly these first few weeks. It has been our experience that we have to then take in the same paperwork that we submitted online, together with the reference number that the system provided us with, and have them complete the registration manually (in person) and not simply verify the documentation. However, we expect that these glitches will eventually be worked out, and then we will, no doubt, find glitches with the new services as they are rolled out. The immigration department is currently announcing (through Facebook & Twitter) that it will be possible to present visa and residency requests through the online system as of the 1st of June, 2017.
This new system already permits the following to be done online:
- status of naturalization applications (only while in the immigration department, not once passed to the Ministry of Government)
- status of visa and authorized visa applications
We will continue to provide updates regarding this system, until it is fully implemented and working smoothly.
For more information, please contact Joan Villanueva.