Hiring in Panama
Reviewed by Hassim Patel Bhana, Managing Partner · Updated
In Panama indefinite contracts are the norm, and after two years an employee can only be dismissed for a just cause set by law. At least 90% of ordinary staff must be Panamanian, and foreign specialists cannot exceed 15%. A residency does not allow anyone to work: the work permit is a separate MITRADEL application.
Key points
- Indefinite contracts are the norm in Panama.
- After two years, an employee can only be dismissed for a just cause set by law.
- At least 90% of ordinary staff must be Panamanian.
- Foreign specialists cannot exceed 15% of staff.
- A residency does not allow anyone to work — the work permit is a separate application with MITRADEL.
- Employing someone without a permit is fined B/.500 the first time, B/.1,000 the second and B/.15,000 the third.
Frequently asked questions
My new hire has residency. Can they start?
Not on the residency alone. A residency does not allow anyone to work; the work permit is a separate application with MITRADEL.
How many foreigners can I employ?
At least 90% of ordinary staff must be Panamanian, and foreign specialists cannot exceed 15%.
What is the fine for hiring without a permit?
B/.500 per worker the first time, B/.1,000 the second and B/.15,000 the third.
Can I dismiss someone freely?
Not after two years. From then an employee can only be dismissed for a just cause set by law.