Panama Legal

How Pensionados Can “Work” In Panama.


Pensionados or Retirees are not usually people who want to retire from a productive or an active life. They can now be active and productive but according to their own rules and timelines. But when its time to move to Panama and take advantage of the incredible business and commercial opportunities it provides, they are legally prevented from doing so. “Thou shall not work” is the main commandment of a Pensionado Visa.

There is no way to go around it if you take into consideration that Panamanian Labor law defines individual work contract as “the verbal or written pact through which one persona obligates him/herself to provide a service o execute a task for another, under his/her subordination and dependence.”

Now, the law makes a difference between a “work contract” and a “work relationship”. Which means a contract or pact is not necessary. There are certain “actions” or “situations” that could be interpreted as “working” such as:

A. Being full time within the premises of the other’s office.
B. Having work hours and break periods.
C. Having pre established vacations
D. Depending economically on the other person.
E. Having to take orders and directions that if not followed will have negative consequences to your relationship.
F. Other situations and actions could be defined as “working”.

working guy

Of course, to get involved in a “work-type” relationship will of course bring legal consequences to your Visa, your residence in Panama, as well as economic fines to the person you are working for. So how can one get around this?

Here is some practical advice for those who wish to do business in Panama, but are restricted from “working” do their immigration status:

• Set up a corporation. Nothing prevents you from buying or selling stock, property, etc., and receiving earnings as dividends from the gains those assets produce. But try not to be the public figure and limit yourself to being the one who pulls the strings.





Copyright© 2011, Pan Am Publishing S.A., Republic of Panama