Countries › Panama › Guide › 7. Labor and employment › Hiring foreign workers in Panama: the 90 percent Panamanian staff rule, the 15 percent cap on foreign specialists, MITRADEL work permits and escalating fines

Hiring foreign workers in Panama: the 90 percent Panamanian staff rule, the 15 percent cap on foreign specialists, MITRADEL work permits and escalating fines

Last verified: 2026-10-29 · Status: Stable

Panamanian employers must keep at least 90 percent of ordinary staff Panamanian (or foreigners with a Panamanian spouse or ten years of residence), and foreign specialists or technicians may not exceed 15 percent of the workforce unless MITRADEL approves more for a set period. Every foreign worker needs a MITRADEL work authorization, issued for up to one year and renewable for up to five years, after which the specialist should be replaced by a Panamanian. Employing foreigners without a permit costs B/.500 per worker the first time, B/.1,000 the second, B/.15,000 the third with suspension of the business license, and cancellation of the license the fourth.

Panama's currency, the balboa (B/.), is at par with the US dollar, which circulates as legal tender; the Superintendencia de Bancos states that the balboa's value is on a par with the US dollar (checked 29 October 2026). USD figures therefore equal the balboa figures.

Key facts

Minimum share of Panamanian (or assimilated) ordinary workers	90 %Código de Trabajo art. 17, as of 2026-10-29 · in force
Maximum share of foreign specialist or technical staff	15 %Código de Trabajo art. 17, as of 2026-10-29 · in force
Work authorization term (renewable)	1 yearsCódigo de Trabajo art. 17, as of 2026-10-29 · in force
Maximum total term of renewals for a foreign specialist	5 yearsCódigo de Trabajo arts. 17 and 18, as of 2026-10-29 · in force
Fine per unauthorized foreign worker, first offense	500 PABCódigo de Trabajo art. 20 (Ley 59 de 2017), as of 2026-10-29 · in force
Fine per unauthorized foreign worker, second offense	1000 PABCódigo de Trabajo art. 20 (Ley 59 de 2017), as of 2026-10-29 · in force
Fine for third offense (flat)	15000 PABCódigo de Trabajo art. 20 (Ley 237 de 2021), as of 2026-10-29 · in force
Exchange rate used for USD conversions	1 PAB per USDBalboa at par with the US dollar (Superintendencia de Bancos), as of 2026-10-29 · in force

The rule

1. Every employer must keep Panamanian workers, or foreigners with a Panamanian spouse or ten years of residence, in a proportion of at least 90 percent of ordinary workers, and may keep foreign specialist or technical staff of up to 15 percent of all workers; the same percentages apply to wages as a whole and by category. A higher share of foreign specialists may be allowed for a defined time on the recommendation of the relevant ministry and approval of the labor ministry.
Example: A company with 40 ordinary workers needs at least 36 of them to be Panamanian or assimilated; separately, foreign specialist or technical staff may not exceed 15 percent of total staff. / Not a monetary rule.Código de Trabajo (Decreto de Gabinete 252 de 1971), art. 17, 1971-12-30 official text · verified 2026-10-29

2. Employers that need foreign workers must obtain an authorization from the labor ministry, after proof that the national staff percentages are respected and that the specialist is qualified and will perform specialist functions. It is issued for up to one year and may be renewed up to a maximum of five years. Confidential staff of companies whose Panamanian office only directs transactions completed or taking effect abroad are excepted from the percentages, with authorization of the labor authorities.Código de Trabajo (Decreto de Gabinete 252 de 1971), art. 17, 1971-12-30 official text · verified 2026-10-29

3. Employers authorized to hire foreign specialists or technicians must replace them with a Panamanian within a maximum of five years from the authorization. The executive may raise the required proportion of Panamanians according to economic conditions.Código de Trabajo (Decreto de Gabinete 252 de 1971), arts. 18 and 19, 1971-12-30 official text · verified 2026-10-29

4. Breaches and false information are fined by MITRADEL: first offense B/.500 per foreign worker without a work permit; second offense B/.1,000 per worker; third offense B/.15,000 regardless of the number of workers, plus a request to the Ministerio de Comercio e Industrias to suspend the business's Aviso de Operación; fourth offense, cancellation of the Aviso de Operación. Fines double where ten or more workers are involved, and offending companies are listed on MITRADEL's website. The unauthorized foreign workers must be dismissed and paid their final settlement, and the Caja de Seguro Social and the Servicio Nacional de Migración are notified.
Cost to do it: First offense with 3 unauthorized workers: B/.1,500 (US$1,500); with 12 workers the fines double: B/.12,000 (US$12,000).
Example: Second offense with 4 workers: B/.4,000. / US$4,000.Código de Trabajo art. 20 as worded by Ley 59 de 12 de septiembre de 2017 art. 1, numeral 3 as worded by Ley 237 de 15 de septiembre de 2021 art. 1, art. 20, 2021-09-15 official text · verified 2026-10-29 · changed: Ley 237 of 2021 raised the third offense fine from B/.10,000 (set by Ley 59 de 2017) to B/.15,000.

5. Sanctions follow an inspection procedure: the inspector visits with officials from the labor directorate, the employer has three working days to answer the fine notice and present evidence, the directorate decides within five working days, and the decision can be appealed to the minister before collection.Código de Trabajo art. 20-A as added by Ley 59 de 2017 art. 2, art. 20-A, 2017-09-12 official text · verified 2026-10-29

6. Decreto Ejecutivo 6 of 13 April 2023 regulates Código de Trabajo arts. 17, 18 and 19 on labor migration, setting the categories of work permits, their requirements and procedure in a single text, and repealed Decreto Ejecutivo 4 of 2 March 2023.Decreto Ejecutivo 6 de 13 de abril de 2023 (MITRADEL), Gaceta Oficial 29760-C, art. 1, 2023-04-13 official text · verified 2026-10-29

7. In economic dismissals, after seniority, employers must prefer to retain Panamanian workers over non Panamanians.Código de Trabajo art. 213 section C as amended by Ley 44 de 1995, art. 213, 1995-08-12 official text · verified 2026-10-29

Offense	Fine	Other consequence
First	B/.500 per worker	Dismissal and settlement of the workers; notice to CSS and Migración
Second	B/.1,000 per worker	Same
Third	B/.15,000 flat	Request to suspend the Aviso de Operación
Fourth	Not stated	Request to cancel the Aviso de Operación

Fines for employing foreigners without a work permit, Código de Trabajo art. 20 as worded by Ley 59 de 2017 and Ley 237 de 2021. Amounts double where ten or more workers are involved.

Worked example

A logistics company with 50 workers wants to bring in 8 foreign engineers. Foreign specialists may be up to 15 percent of 50, which is 7, so the eighth needs a ministerial recommendation and MITRADEL approval for a defined time.
Each engineer needs a MITRADEL authorization for up to one year, renewable up to five years, by which time the company should have trained Panamanian replacements (art. 18).
If an inspection finds 3 engineers working before their permits are issued, a first offense costs B/.1,500 (US$1,500).

Step by step

Count ordinary and specialist staff and payroll by category to confirm the 90 percent and 15 percent ratios.
Apply to MITRADEL for each foreign worker's work authorization under Decreto Ejecutivo 6 de 2023 before the start date; immigration status is handled separately with the Servicio Nacional de Migración.
Track renewal dates and the five year horizon, and document training of Panamanian successors.
Answer any inspection fine notice within three working days with evidence.

Common traps

The ratios apply to payroll as well as headcount, so a few highly paid foreign executives can breach the wage percentage.
Repeat offenses put the business license at risk, not just the fine.
Foreigners with a Panamanian spouse or ten years of residence count toward the 90 percent national share.
Specific immigration categories may carry their own work rights; check them with MITRADEL and Migración before relying on them.

Sources

← Remote work in Panama: telework under Ley 126 de 2020, written and MITRADEL stamped agreements, reversibility, equipment and connectivity costsYouth internship program in Panama: Ley 513 de 2026 lets companies take interns aged 18 to 25 for up to a year at B/.450 a month without an employment relationship →

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