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flag Panama Panama: Operating a Business

In this page: Setting Up a Company | The Active Population in Figures | Working Conditions | Cost of Labor | Social Partners

 

Setting Up a Company

Limited Liability Company
Number of partners: No limit in the number of partners
Capital (max/min): USD 5,000
Shareholders and liability: Limited to capital
Corporation
Number of partners: No limit in the number of partners
Capital (max/min): USD 10,000
Shareholders and liability: Only limited to unpaid subscribed capital.
The Competent Organization
The Public Registry for incorporations of Companies and Foundations in Panama.
 
Setting Up a Company Panama Latin America & Caribbean
Procedures (number) 6.0 9.0
Time (days) 7.0 53.0

Source: Doing Business.

 
Business Setup Procedures
Consult Doing Business Website, to know about procedures to start a Business in Panama.
Trade Register

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The Active Population in Figures

20112013
Labor force 1,486,0001,540,000

Source: CIA - The world factbook

 
200920102011
Total activity rate -64.60%66.10%
Men activity rate 80.70%82.60%82.50%
Women activity rate 48.40%49.30%49.60%

Source: UN - United Nations

 

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Working Conditions

Legal Weekly Duration
Panamanian labor law allows 4 work shifts per day.

1) Day work of 8 hours maximum per day and 48 hours per week which should take place between 6 AM and 6 PM. 2) Night work of 7 hours maximum per day and 42 hours per week which should take place between 6 PM and 6 AM. 3) Mixed work (night and day) of 7.30 hours maximum per day and 45 hours per week which should take place during the two cycles of work.  More than 3 nights per week the other periods are automatically considered as night. 4) Rotating cycle when the company needs staff during the different shifts.

Retirement Age
57 years for women and 62 years for men.
Working Contracts
The employment contracts are regulated by legal clauses and to a lesser degree by collective agreements and individual negotiations.
The terms of employment contracts, the conditions of hiring and dismissal are strict.
Labor Laws
Consult Doing Business Website, to obtain a summary of the labor regulations that apply to local entreprises.

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Cost of Labor

Minimum Wage
PAB 318 per month (source: ILO, 2011).
Average Wage
Gross average monthly wage of men: PAB 615 (source: ILO, 2010);
Gross average monthly wage of women: PAB 546 (source: ILO, 2010).
Social contributions
Social Security Contributions Paid By Employers: 10.75%.
Social Security Contributions Paid By Employees: 7.25%.

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Social Partners

Social Dialogue and Involvement of Social Partners
Private sector workers have a right to form and to join unions of their choice.  Public sector employees do not have a right to form unions.  Government workers can form "associations" and negotiate collectively but only if they have a minimum of 50 members.
Unions
Panama Industrial Union (SIP) (Spanish only)
Unique National Union of the Building and related Industries (SUNTRACS) (Spanish only)
Unionization Rate
14.2%.
Labor Regulation Bodies
Federation of Private Enterprises

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Last Updates: October 2014