Countries › Panama › Guide › 7. Labor and employment › Youth 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

Youth 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

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

Ley 513 of 20 March 2026 created a voluntary three year program under which private companies and non profits can take young people aged 18 to 25 (or minors with a secondary school diploma) as interns for up to one year and 40 hours a week. Interns receive a B/.450 monthly stipend that is not salary, carries no social security or tax deductions and is deductible for the company, which must buy occupational risk insurance. Intern numbers are capped by payroll size, replacing formal jobs with interns is fined, and Decreto Ejecutivo 1 of 31 August 2026 runs registration through a MITRADEL portal.

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

Monthly stipend under the youth internship program	450 PAB per monthLey 513 de 2026 art. 8, as of 2026-10-29 · in force
Maximum internship length	12 monthsLey 513 de 2026 art. 8, as of 2026-10-29 · in force
Maximum internship hours per week	40 hoursLey 513 de 2026 art. 9, as of 2026-10-29 · in force
Eligible age range	18 to 25 yearsLey 513 de 2026 art. 1, as of 2026-10-29 · in force
Intern cap for employers with more than 200 staff	3 % of workforceLey 513 de 2026 art. 5, as of 2026-10-29 · in force
Program duration (extendable once by 3 years)	3 yearsLey 513 de 2026 art. 4, 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. The internship program targets young people in or with secondary, university, vocational or technical education aged 18 to 25, or minors with a secondary school diploma. Participation by companies and non profit entities established in Panama is voluntary. The program lasts three years from the law's entry into force and can be extended once by executive decree for three more years.Ley 513 de 20 de marzo de 2026, Gaceta Oficial 30487-A, arts. 1, 3 and 4, 2026-03-20 official text · verified 2026-10-29 · changed: New program created by Ley 513 of 20 March 2026, in force the day after promulgation; regulated by Decreto Ejecutivo 1 of 31 August 2026.

2. Intern caps by payroll: up to 50 staff, 2 interns; 51 to 100, 4 interns; 101 to 200, 6 interns; more than 200, up to 3 percent of the workforce, measured on the payroll of the current or previous month. Interns may not replace formal jobs. Higher numbers need a reasoned MITRADEL authorization, deemed granted if not issued within 30 days.
Example: A firm with 350 staff may take up to 10 interns (3 percent of 350 is 10.5). / Not a monetary rule.Ley 513 de 2026, arts. 5 to 7, 2026-03-20 official text · verified 2026-10-29

3. An internship lasts at most one year and creates no employment relationship or labor benefits. The intern receives B/.450.00 a month as an internship stipend, which is not salary and is not subject to tax or social security deductions; the company may deduct the amount for income tax.
Cost to do it: B/.450 (US$450) a month per intern, B/.5,400 (US$5,400) for a full year, plus the occupational risk insurance premium.
Example: Two interns for 12 months cost B/.10,800 in stipends, deductible for income tax. / US$10,800.Ley 513 de 2026, art. 8, 2026-03-20 official text · verified 2026-10-29

4. Terms are set in a participation agreement on a MITRADEL form; the internship may not exceed 40 hours a week. The company must buy an insurance policy covering occupational risks, because interns are not covered by the Caja de Seguro Social occupational risk scheme.Ley 513 de 2026, art. 9, 2026-03-20 official text · verified 2026-10-29

5. If the company offers the intern a job at the end, it must sign an employment contract under the Código de Trabajo at no less than the legal minimum wage; minors need parental consent. The company must certify the internship period, which counts as work experience.Ley 513 de 2026, art. 10, 2026-03-20 official text · verified 2026-10-29

6. Companies report incoming and outgoing interns to MITRADEL every three months. Replacing formal jobs with interns or exceeding the caps is fined B/.250 to B/.500 by the Dirección General or Regional de Trabajo. The program does not affect school internships or the Mi Primer Empleo program of Ley 121 de 2019.Ley 513 de 2026, arts. 11 to 13, 2026-03-20 official text · verified 2026-10-29

7. The regulation channels participation through the program portal: incorporation happens only when the company registers the intern in the portal for the participation agreement, and the data enters MITRADEL's official register. Requests to exceed the cap must include, among other items, a notarized sworn statement that no formal job is being replaced, the latest Caja de Seguro Social payroll and evidence of insurance cover, and MITRADEL has 30 calendar days to decide.Decreto Ejecutivo 1 de 31 de agosto de 2026 (MITRADEL), Gaceta Oficial 30601-A, arts. 10 to 14 and 23, 2026-08-31 official text · verified 2026-10-29

Payroll	Maximum interns
Up to 50	2
51 to 100	4
101 to 200	6
More than 200	3 percent of the workforce

Intern caps by payroll size, Ley 513 de 2026 art. 5.

Worked example

A software company with 80 employees takes 4 interns, the cap for 51 to 100 staff, for 12 months at 40 hours a week.
Stipends total B/.21,600 (US$21,600) for the year, with no social security contributions, thirteenth month, vacation or severance, and the full amount is deductible; the company also buys occupational risk cover for the interns.
Hiring two of them at the end of the year requires ordinary employment contracts at no less than the applicable minimum wage, which for information and communication activities is B/.3.16 an hour nationally.

Step by step

Check the payroll registered with the Caja de Seguro Social in the current or previous month to size the cap.
Register as a participating company and each intern in the MITRADEL program portal and sign the participation agreement.
Buy occupational risk insurance for the interns before they start.
Pay B/.450 monthly and report entries and exits to MITRADEL every quarter.
Issue an internship certificate at the end and use an ordinary employment contract for any hire.

Common traps

Using interns to fill vacant or existing posts is a fineable substitution of formal employment.
Exceeding 40 hours a week or 12 months undermines the no employment relationship status.
The Caja de Seguro Social occupational risk scheme does not cover interns; the company must insure them privately.
The program is temporary (three years, extendable once), so plan multi year intake accordingly.

Sources

← Hiring foreign workers in Panama: the 90 percent Panamanian staff rule, the 15 percent cap on foreign specialists, MITRADEL work permits and escalating finesLabor disputes in Panama: Juntas de Conciliación y Decisión, labor courts, MITRADEL authorizations and the 60 working day deadline →

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