Finding the right PEO Payroll Company in Panama
Finding the right professional employer organization (PEO) payroll company in Panama will allow you to hire qualified local staff without having to formally establish a business in the Central American country. For foreign companies with a limited-scale or short-term operation, it is often the most suitable option available, while for others planning a larger-scale involvement, using a PEO payroll company in Panama offers the opportunity to get familiar with the market before investing further.
Panama has a minimum hourly wage for some activities, and a PEO payroll company can also be known as an employer of record (EOR), while PEO payroll services can also be referred to as payroll outsourcing.
With a gross domestic product (GDP) of 68.5 billion (all figures in USD) in 2019 and a population of approximately 4.5 million, Panama is considered a high-income country that scored a high 92.0 in the World Bank’s Doing Business 2020 report. The nation recorded more than $6 billion of foreign direct investment (FDI) inflows in 2019, stimulated by a territorial tax system in which only income earned within the country is taxed. The Central American country’s business-friendly approach sees it employ the lowest value-added tax (VAT) and income tax rates in Central America, while its politically stable government and secure banking sector have made it a highly popular destination for foreign investors and expats.
Some of the country’s main export commodities include refined petroleum, coal tar oil, passenger and cargo ships, and gold. Panama has an advantageous geographic location, linking Central America to South America, while also connecting the Caribbean Sea and the Atlantic Ocean via the iconic Panama Canal, through which roughly 14,000 ships transit each year, generating an estimated 8% of the nations’ GDP.
If you are considering company formation in Panama or are otherwise looking to enter the market, read on to understand the advantages of hiring local staff through a PEO payroll company in Panama.
Advantages of Using a PEO Payroll Company in Panama
Working with a PEO payroll company allows you to enter the Panamanian market in a short time frame, allowing you to get your commercial operations underway in a timely manner. Some of the main benefits of hiring local staff through a PEO payroll company in Panama include:
- Legal Representation
- Legal Advice
- Profitability
- Employee recruitment
- Visa processing
- Time-saving
Understanding the Hiring Process in Panama
Understanding local legislation can be challenging for foreign executives. Without the support of a PEO payroll company in Panama, you would need to complete the following process to legally hire staff in the country:
- Incorporate a new company
- Open a corporate bank account
- Register your company with the Ministry of Commerce
- Register your organization with the municipality where it is located
- Prepare formal employment contracts for all employees and obtain contract approval from the Ministry of Labor
- Register your company as a formal employer with the Social Security Fund of Panama (CSS)
- Comply with monthly payroll statements
Note that in Panama, only 10% of a company’s total payroll can be foreign.
Common FAQs When Hiring through a PEO Payroll Company in Panama
Based on our experience, these are the common questions and doubts of our clients:
- How to hire employees in Panama?
- What is in a standard employment contract in Panama?
- What are the mandatory employment benefits in Panama?
- What is the total cost for an employer to hire an employee in Panama?
Biz Latin Hub Can Be Your PEO Payroll Company in Panama
At Biz Latin Hub, our team of multilingual specialists is equipped to deliver excellence and help you recruit the most suitable employees to ensure the success of your commercial operations in Panama. With our full portfolio of hiring an international PEO services, we can be your single point of contact to incorporate your business in Latin America and the Caribbean. Reach out to us now to receive personalized assistance.
Snapshot of the employment law in Panama. PEO payroll company in Panama The information provided here within should not be construed as formal guidance or advice. Please consult a professional for your specific situation. Information provided is for informative purposes only and may not capture all pertinent laws, standards, and best practices. The regulatory landscape is continually evolving; information mentioned may be outdated and/or could undergo changes. The interpretations presented are not official. Some sections are based on the interpretations or views of relevant authorities, but we cannot ensure that these perspectives will be supported in all professional settings.
