Executive Decree No. 6 of April 13, 2023, Regulating Labor Migration

Learn About the Most Relevant Changes in Executive Decree No. 6 of April 13, 2023, Regulating Labor Migration

By: Alyeen Quintero – Associate

The Executive Decree No. 4 of March 2, 2023 (hereinafter “Decree 4”), which was controversial for the changes it implemented in several of its articles concerning the hiring of foreign workers, has been recently repealed and replaced by Executive Decree No. 6 of April 13, 2023 (hereinafter “Decree 6”), published through Official Gazette No. 29760-C, which regulates Articles 17, 18, and 19 of the Labor Code of the Republic of Panama.

We would like to start our analysis of Decree 6 by pointing out that the Ministry of Labor has replaced the term “foreign person” with “migrant worker” throughout the text. In this regard, we would like to highlight that the change introduced by Decree 4 is maintained, which established the possibility for all migrant workers with permanent residency to apply for one of the work permits listed in this Decree, regardless of the migratory category under which they obtained permanent residency.

Regarding the Permanent Resident Work Permit created by Executive Decree No. 21 of 2019, we must note that it has not been included in the list of categories. However, new possibilities have been created, such as work permits for foreign individuals who obtained permanent residency under certain investor categories, which we will detail later.

Another significant change to highlight is that Decree 6 expands the list of foreign nationals exempt from needing a work permit. Thus, the following individuals do not need to apply for a work permit:

• Those who are religious, performing their mission.
• Those who engage in economic, business, or investment activities that are not under legal subordination or economic dependence on an employer.
• Those covered by special regimes that contain such an exemption in their provisions or regulations.
• Those who are artists and perform under agreements or cultural exchanges, or those involved in classical art and related activities.

Regarding classification, Decree 6 adds an additional classification called “Work Permits Established through Special

Economic and Investment Policies,” which refers to four (4) new categories of work permits for residents who have obtained residency through investment programs, including: under the “Friendly Countries” category, Permanent Migrant Worker as a Qualified Investor, Migrant Worker under the special migratory category of Own Economic Solvency, and migrant workers under current special economic and investment policies. It is important to note that while the Permanent Resident Work Permit category has been eliminated, there is now the possibility for foreigners who obtained their residency through investment programs to apply for a work permit.

We have also observed that the possibility to replace certain certificates and procedures with online validations has been removed.

A significant change implemented by Decree 6 is the clarification of what Decree 4 indicated regarding the treatment of foreign workers who had obtained “Friendly Countries” work permits indefinitely under Executive Decree No. 140 of August 2, 2012. Decree 6 establishes that these workers will be considered as equivalent to local labor. In this regard, it is important to note that from now on, the “Friendly Countries” work permit can be requested either as an Investor or for Labor Reasons.

Decree 6 has eliminated the work permit created for SEM Visa workers under Decree 4. Only the work permit for SEM Visa Executive Dependents is maintained, now called “Work Permit for Dependent of Migrant Worker Holding a Visa or Residence Permit through Special Laws,” which will be valid for any other worker whose status is a dependent of a resident under special laws. The work permit for workers under the EMMA Regime is maintained only for temporary workers under this Regime.

On the other hand, the change to work permits will now be included within percentages, meaning that Chapter X on Permits Established by Special Migratory Conditions, for new procedures, will include the following categories: Friendly Countries (for labor reasons), General Migratory Regularization Programs, Professional Migrant Worker, Migrant Worker for Family Reunification for Dependents of Residents, and Student Work Permit.

Lastly, it is important to note that Decree 6 clarifies and confirms that all procedures processed under previous Decrees and conditions will be processed, analyzed, and resolved according to the rules under which they were submitted.

Download the full text of Executive Decree