Cross-border remote work<\/strong><\/p>\nBecause of the pandemic, many companies and employees realised that they could work from anywhere. In most cases remote work is done from home or somewhere in the same city. However, the “work from anywhere” concept has been taken literally by a growing number of employees, who may now be working from a variety of locations, locally or abroad.<\/p>\n
Cross-border remote work pose unique challenges for employers and employees, as they need to comply with different countries\u2019 laws and the work the employee performs in another country may have potential contingencies for the company.<\/p>\n
Employers and employees need to understand and comply with the immigration requirements of the remote work location to avoid legal issues. Any person who is going to work in Panama cannot remain in the country as a tourist on a permanent basis and must apply for a residence permit (visa). There is a special residence permit for remote workers that is granted for a period of nine months. Basic requirements include a minimum monthly income of US$3,000 which must come from a foreign source and the functions performed must have effects outside of Panama. Performing representative role of the foreign company in Panama may nullify the permit.<\/p>\n
Although this visa was approved by decree in May 2021, the possible labour and tax implications have not been brought to court yet. Tax implications in Panama could include, among others, income tax and social security contributions.<\/p>\n
Other types of visas and work permits that may be applicable, depending on the nationality of the employee, require the worker to enter into an employment contract governed by Panamanian law, which in turn requires the company to be registered in Panama or retain the services of a payroll outsourcing company holding a Placement Agency License issued by the Ministry of Labour, to act as the employer.<\/p>\n
There are also Permanent Establishment (PE) risks for the foreign company by virtue of the remote worker\u2019s activities. Employees acting as a representative of the foreign company by contracting on behalf of them could be interpreted as a permanent establishment of the foreign company in Panama. The length of time the foreigner stays in Panama may also have tax implications. The specific and detailed circumstances of each case should be subject to a careful and complete evaluation to assess the risks.<\/p>\n
Final considerations<\/strong><\/p>\nRemote work is a reality for many companies and a trending topic among new generations of employees. We strongly recommend taking early advice on these legal issues to avoid unexpected legal consequences. A proper agreement containing clear rules and ensuring compliance with the law is extremely important. Companies should establish clear policies on whether they want to allow the practice of cross-border remote work and if they decide to do so, should take legal advice, define expectations, and provide guidance to the employees.<\/p>\n
[1] Pati\u00f1o, Ana.\u00a0\u00a0 A glance at the telework in Panama.\u00a0\u00a0 Friedrich Ebert Stiftung, August 2021.<\/h6>\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
By Maria Teresa Mendoza, Partner, Labor Law. This article was originally published on CorporateLiveWire, Expert Guide, August 2023. The Covid-19 pandemic changed our lives in many ways and has had a long-term impact on various different aspects, including how people organise their work and where the work is performed. Working remotely is not a new<\/p>\n","protected":false},"author":1,"featured_media":38883,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4731,419,420],"tags":[],"_links":{"self":[{"href":"https:\/\/morimor.com\/es\/wp-json\/wp\/v2\/posts\/38882"}],"collection":[{"href":"https:\/\/morimor.com\/es\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/morimor.com\/es\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/morimor.com\/es\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/morimor.com\/es\/wp-json\/wp\/v2\/comments?post=38882"}],"version-history":[{"count":2,"href":"https:\/\/morimor.com\/es\/wp-json\/wp\/v2\/posts\/38882\/revisions"}],"predecessor-version":[{"id":38887,"href":"https:\/\/morimor.com\/es\/wp-json\/wp\/v2\/posts\/38882\/revisions\/38887"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/morimor.com\/es\/wp-json\/wp\/v2\/media\/38883"}],"wp:attachment":[{"href":"https:\/\/morimor.com\/es\/wp-json\/wp\/v2\/media?parent=38882"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/morimor.com\/es\/wp-json\/wp\/v2\/categories?post=38882"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/morimor.com\/es\/wp-json\/wp\/v2\/tags?post=38882"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}