Employer Of Record in Panama

We make it easy and painless to expand your business into Panama. Forget about dealing with local regulations, confusing tax laws and international payroll management. We take care of all that so you don't have to.

PEO Panama

Accelerate your growth into Panama Compliantly and hassle-free

At Serviap Global we handle all employee onboarding, payroll, compliance, risk, mitigation and benefits, so you can focus on what matters most – your business.

How we can help you expand in Panama

As your EOR in Panama we’d help you expand by hiring employees and running their payroll without establishing a local branch office or subsidiary. 

Your candidate is hired by a PEO in Panama provider in accordance with local labor laws and can be onboarded in days instead of the months it typically takes. Shortly after, your new employee will be working for you, just like any other member of your team. 

Expand to Panama with Serviap Global

Through our PEO and EOR services, you can hire qualified talent in your industry without the trouble of opening your own legal entity. 

In just a few days, you can easily and safely build a presence in Panama, being sure that your staff will be hired in compliance with labor and tax regulations

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Quick Facts

United States Dollar (USD)


Payroll Cycle:


Serviap Group’s International PEO service outsources the hiring and administration functions while you maintain direction over your employee. Taking advantage of talented labor markets and/or sales opportunities in Panama is now easier than ever before. To learn more about International PEO, visit our service page.

Some reasons you might use International PEO or our other services in Panama are:

  • You have a contractor overseas and you want to convert them to an employee
  • Your company is in a non-compliant relationship with your contractor
  • Your company wants to invest in these resources and show your commitment to them by converting to employees
  • Your contractors themselves are asking for an improved status afforded to full time employees
  • You are looking for a cost effective solution to convert your international contractors to employees
  • You need to convert your contractors to employees without setting up a legal entity
  • The costs and risk of maintaining a foreign corporate entity from a compliance and financial perspective is too high for the potential benefit or does not align with long term goals
  • You need to hire today, but in need of an interim solution while setting up your foreign entity

The economy of Panama is one of the fastest-growing economies in the world. The country has a 5-year compound annual growth of 5.8% and a per capita income projected to be $13,200 in 2020. Panama’s economy is largely based on the robust services sector that contributes to over 75% of the country’s GDP. Other major sectors include banking, logistics, the Colon Free Trade Zone flagship registry, and tourism. Also, several important infrastructure development projects have bolstered Panama’s economic growth. Reforms such as easing the process of setting up business and reduction of corporate tax have contributed to economic growth.

Hiring in Panama

Panama is located in Central America and has a population of 4.374 million. The capital city of Panama is Panama City which has a population of almost 2 million. Panama is the only place in the world where you can see the sun rise on the Pacific and set on the Atlantic from the same location – Volcan Baru.

When negotiating terms of an employment contract and offer letter with an employee in Panama, it may be useful to keep the following in mind:

Employment Contracts in Panama

In Panama, employment contracts can be oral or written, but it is best practice to put a strong, written contract in place, in Spanish, which spells out the terms of the employee’s compensation, benefits, and termination requirements. An offer letter and employment contract in Panama should always state the salary and any compensation amounts in American Dollars rather than a foreign currency. The employment contract template is part of the service with Serviap Group no need to draft a separate template if you use our employer of record and PEO service in Panama.

Holidays in Panama

  • New Year’s Day
  • Martyr´s Day
  • Carnival/Shrove Tuesday
  • Good Friday
  • Labor Day / May Day
  • Independence Day
  • Colon Day
  • Shout in Villa de los Santos
  • Independence from Spain
  • Christmas Day

Work/Time Regulations in Panama

Regular work schedules should not be more than 8 hours per day and 48 hours per week. Employees aged less than 16 cannot work for more than 6 hours a day while those aged 16 to 18 cannot work for more than 7 hours a day. Employees are entitled to rest periods of 30 minutes to 2 hours in a day. The rest period in a week should be at least 24 hours, which is generally a Sunday. Any work done between 6 p.m. and 6 a.m. is considered night duty. Even a shift that includes more than 3 hours in this 12-hour period is considered night work. Employees who perform night duties have 7-hour shifts and work no more than 42 hours in a week. Pregnant employees should not be asked to perform work at night.


Employees are entitled to overtime pay under the Constitution. The work performed between 6 a.m. and 6 p.m. is paid at the rate of 25% premium over the regular pay while the overtime work performed between 6 p.m. and 6 a.m. is paid at the rate of 50% of regular pay. Employees who work on a Sunday or a weekly rest day are entitled to an overtime pay equal to 150% of regular pay and a day off. Overtime should not exceed 3 hours in a day and 9 hours in a week.

Leaves in Panama

Maternity Leave

Pregnant employees can take paid maternity leave for 14 weeks out of which 6 weeks can be taken before the expected date of delivery while 8 weeks can be taken afterward. If an illness occurs due to pregnancy or childbirth, the maternity leave can be extended. In case the birth occurs after the expected date, 8 weeks of postnatal leave are counted from the actual birth date. In cases of miscarriage or stillbirth, the maternity leave is determined according to mother’s health assessed and confirmed by a doctor by issuing a medical certificate. Pregnant employees who have made contributions for at least 9 months in the last 12 months prior to the 7th month of pregnancy are entitled to maternity benefits by social security. If pregnant women have not made necessary contributions, the employer must pay full maternity benefits.

Child Care Leave

Employees can take paid leave for medical appointments for children aged less than 2 years provided they give notice in advance and go through verification.

Sick Leave

Employees who fall sick or suffer an injury are entitled to 70% of their average earnings in the last 2 months for a maximum of 26 weeks of sick leave. The leave entitlement can be extended by an additional 26 weeks if the Social Security Administration agrees.

Vacation Leave

Employees in Panama are entitled to 30 days of paid vacation for every 11 months of employment. Employers must provide vacation pay at least 3 days before the leave begins. Vacation can be taken in no more than two equal periods and must be taken without undue delay after accumulating leaves. Employers cannot pay in lieu of vacation.

Adoption Leave

Women who adopted a child are entitled to 4 weeks of adoption leave while adoptive fathers can take a 2-week leave that is deducted from annual leave.

Why Serviap Group

Establishing a branch office or subsidiary in Panama to engage a small team is time-consuming, expensive and complex. Panamanian labor law has strong worker protections, requiring great attention to detail and an understanding of local best practices. Serviap Group makes it painless and easy to expand into Panama. We can help you hire your candidate of choice, handle HR matters and payroll, and ensure that you’re in compliance with local laws, without the burden of setting up a foreign branch office or subsidiary. Our Panama PEO and Global Employer of Record solution provides you peace of mind so that you can focus on running your company.

If you would like to discuss how Serviap Group can provide a seamless employee leasing or PEO solution for hiring employees in Panama, please contact us.

Your one-stop global hiring solution. Secure, reliable, compliant

Premium 24/7 Support

No matter how big or small, we are ready to answer all your questions- anytime, anywhere.

Regional expertise

Our team of in-country experts help you navigate new markets and cultural nuances

Top-tier Benefits Packages

Great talent deserves great benefits. We offer a competitive range of benefits so that you only attract top-tier talent worldwide.

You remain 0% liable

Shift the worry from your shoulders to ours! We stay on top of regulations so you’re always 100% complaint with local laws

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