PANAMA Law and Practice Contributed by: Rafael Rivera, Malvis Mina, Nicole Pérez and Carolina Lino, BDO Panama
To apply to this regime, the company’s business group must have assets equal to or greater than USD200 million; or must provide services to at least seven subsidiaries of the group. The SEM regime offers tax, immigration and labour ben - efits. In terms of immigration and labour ben - efits, there is no limit on the hiring of foreigner workers under the SEM regime. Expatriates will be exempt from income tax, mandatory social security affiliation and are eligible for a special SEM visa. Moreover, the SEM regime grants a fixed income tax rate of 5%, services provided to business groups are exempt from VAT, and there is an exemption from paying withholding dividend tax and complementary tax. Multinational companies for the provision of Services Related to Manufacturing (EMMA) Companies, whether foreign or domestic, can apply to the EMMA regime, provided they oper - ate from Panama to provide services to their par - ent company or to their subsidiaries, affiliates, or companies associated with entities of the same group. These companies must provide services related to: • manufacturing, assembly, maintenance and conditioning products, machinery and equip - ment, product development, research, or innovation; • analysis, laboratories, testing, or other ser - vices related to manufacturing; and • logistics such as storage, deployment, and distribution centres for components or parts. Any company interested in applying for the ben - efits granted by this special regime must apply for the relevant licence from the Technical Sec - retariat of the Multinational Enterprise Licensing Commission.
By holding a licence under the special regime for the establishment and operation of multinational companies for the provision of manufacturing- related services, the company enjoys a series of immigration, labour and tax benefits. Moreover, the SEM regime grants a fixed income tax rate of 5%, services provided to business groups are exempt from VAT, and there is an exemp - tion from paying withholding dividend tax and The City of Knowledge is an international com - munity made up of academic organisations, technology companies, and non-governmental organisations. The City of Knowledge is a knowl - edge platform focused on enhancing the innova - tive and competitive capabilities of the conglom - erate’s users. It also facilitates access to a series of benefits and services tailored to user needs. This regime grants tax benefits such as: • exemption from all taxes, contributions, rates, or import duties on machinery, equipment, furniture, vehicles, artifacts, and supplies nec - complementary tax. City of Knowledge essary for the development of the project; • exemption from the Tax on the Transfer of Personal Property (local VAT) on machinery, equipment, vehicles, artifacts, and supplies acquired and necessary for the development of the project; • exemption from the Real Estate Tax on prop - erty of this nature owned by City of Knowl- edge; • exemption from any tax, fee, duty, or levy lev - ied on the remittance of funds abroad, when such remittance or transfer of funds is carried out for the purposes of the project; and • innovative companies that produce, assem - ble, or process high-tech goods or provide similar services in technology parks that may
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