Countries › Panama › Guide › 16. What is normal abroad but not here

16. What is normal abroad but not here: Panama

What is normal abroad but works differently in Panama: the habits foreign investors bring from home, such as owning a retail chain outright, hiring any nationality, dismissing at will, monthly payroll, discretionary bonuses, worldwide taxation and PDF invoices, set against the Panamanian rule and its cost, each tied to the official text. Investors also active in Argentina, whose FX, tax and labor rules differ markedly, can compare through The Argentine Thread guide.

Investor view. Panama's dollar economy, territorial tax and free repatriation make it one of the easiest places in the region to move capital, and its few local rules on retail, staffing and dismissal are written down and predictable, which supports long term growth.

• What works differently in PanamaPanama is open to foreign capital, uses the US dollar and taxes only Panamanian source income, yet several habits that are normal abroad do not work here. Retail trade is reserved to Panamanians, 90 p
• Retail trade is reserved to PanamaniansAbroad, a foreign investor can usually open shops or sell directly to consumers through a local company it owns outright. In Panama the Constitution reserves retail trade (selling to the consumer, and
• At least 90 percent of ordinary staff must be PanamanianAbroad, employers usually hire any nationality once a work visa is granted. In Panama every employer must keep Panamanians (or foreigners with a Panamanian spouse or ten years of residence) at no less
• No dismissal at will after two years of serviceAbroad, many employers can end an open ended contract with notice or a modest payment. In Panama an employer cannot end an indefinite contract without a just cause listed in the Labor Code, except mai
• A mandatory thirteenth month paid in three installmentsAbroad, a year end bonus is usually discretionary or set by contract. In Panama every private employer must pay the décimo tercer mes, worth one day of salary for every eleven days worked, in three eq
• Fortnightly pay and no salary cuts, even by agreementAbroad, monthly payroll is common and an employee can agree to a pay cut. In Panama salary must be paid in full at intervals of no more than a fortnight, in legal tender, and the agreed salary cannot
• Territorial tax: foreign source income is not taxedAbroad, most countries tax resident companies on worldwide income and give credits for foreign tax. Panama taxes only income produced inside Panama: foreign source income is subtracted from gross inco
• Every sale needs a fiscal printer or electronic invoiceAbroad, an invoice is often a PDF from accounting software. In Panama every sale of goods or services by a resident must be documented through a DGI authorised fiscal device or the Sistema de Facturac
• US dollars, no local paper money and free repatriationAbroad, investors usually face a local currency with its own exchange rate and, in much of Latin America, some FX rules. Panama's balboa is at par with the US dollar, which circulates freely; the Cons

Related: Panama country profile · live dashboard · central bank and release calendar · our posts on X