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Hiring employees & recruitment requirements in Panama

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Panama remains one of the top commercial jurisdictions in Latin America, and rightly so. The region has extremely favourable foreign investment laws and an attractive business environment. Additionally, Panama's strategic geographic location and being home to the Panama canal have made the country a key platform for international trade in America and around the globe.

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Hiring employees & recruitment requirements in Panama

  1. 1. Hiring Employees + Recruitment Requirements in Panama www.bizlatinhub.com
  2. 2. www.bizlatinhub.com Key Considerations: Employment Find below, some of the key considerations that should be taken into account before contracting staff in Panama. Yes – 3 months Is there an employee probation period? Yes Do staff need a local employment contract? Yes Can expatriate staff be hired? Minimum of 30 days Vacation entitlement Max employer contribution is 26% Total cost of employment Employers Who manages withholding tax? • Social Security • Pension Fund • 13th Month Salary Employee benefits
  3. 3. www.bizlatinhub.com Pathways to Hiring Staff Through a local legal entity Through a PEO solution: Professional Employer Organization
  4. 4. Forming a Legal Entity in Panama www.bizlatinhub.com In Panama, there are (2) main types of legal entities: A Corporation/Joint Stock Company (Sociedad Anónima – S.A) and a Limited Liability Company (Sociedad de Responsabilidad Limitada – S.R.L) Advantages: • Greater control of your employees • Better knowledge of local market, laws and regulation • Viewed more positively than a PEO solution Disadvantages: • High set-up/ongoing costs • Administration involved in managing a local company • Accounting and tax obligations
  5. 5. Professional Employer Organization www.bizlatinhub.com Advantages: • You can operate without forming and maintaining a local entity • Limited legal responsibility • Cost-effective way to convert international contractors into employees Disadvantages: • The PEO becomes a co-employer • Loss of control • Costs involved with PEO services • Compromised company culture International PEO is a method to employ staff without having your own company
  6. 6. www.bizlatinhub.com contact@bizlatinhub.com Are you looking to hire staff? As you are now aware, you have two options to hire staff: a) Through a Local Legal Entity or b) Through a PEO solution Need assistance hiring employees? Partner with Biz Latin Hub to learn how we can support you and your business in Latin America
  7. 7. Doing Business in Panama? Learn More Here! www.bizlatinhub.com How To Open a Corporate / Company Bank Account in Panama 5 Reasons to Incorporate a Company in Panama Business Accounting and Company Tax Declarations Requirements in Panama

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