Panama’s Ministry of Commerce and Industries presents Bill which aims to amend the Law of the Special Regime for establishment and operation of Multinational Branches
With the objective of increasing foreign investment and consolidating the logistics and services platform of Panama, the Minister of Commerce and Industries presented a bill (not yet approved) to the National Assembly which seeks to make even more competitive the special regime for the establishment and operation of Multinational Branches (“SEM”: initials in Spanish for Sedes de Empresas Multinacionales).
The Minister informed that the proposal of amendment to the “SEM” regime contemplates updates in accordance with international standards, establishes new requirements for the obtainment of a “SEM” license and expands the scope of services these companies can provide.
He explained that after ten years of execution of Law 41 of 24th August, 2007, the “SEM” regime has proved to be successful, achieving the establishment in the Republic of Panama of 146 regional headquarters of multinational companies, which represents an investment of USD $1,000 million dollars, benefiting the economic activity of the country, generating hundreds of jobs, the transfer of technological knowledge and the training of Panamanian workforce.
Among the most important points of the project, it was clarified that:
- It does not contemplate any change in labor matters, that is to say that in no way it threatens the more than 60 professions reserved only for Panamanians or against the percentage allowed by law for the hiring of foreign citizens.
- The “SEM” must have a minimum of five full-time employees
- The “SEM” must have a minimum annual operating expenses of at least five hundred thousand dollars (USD $500,000.00)
In order to increase “SEM” operations in Panama, the proposal adds the service of financial assistance to companies of the same business group, which includes, but is not limited to: financial management services, risk analysis, credit analysis, due diligence, custody and filing of documentation, document processing center and treasury services, as well as any other services which may be determined and approved by the Superintendence of Banks, the Superintendence of Insurance and Reinsurance, the Superintendence of the Securities Market or any other regulatory entity of the Republic of Panama.
