EMMA (Multinational Companies for the Provision of Services Related to Manufacturing)

EMMA Law | Law 159 of August 31, 2020

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Special regime created for the establishment of logistics centers for light manufacturing and repackaging in Panama.

Like the SEM regime, they would enjoy legal security and immigration, labor and tax benefits that promote the production of products and services for export and for internal commercial use.

Under this new comprehensive law, companies that currently operate under the SEM license will be able to apply for a manufacturing services license through an expedited process.

The companies that request a license to operate under this special regime must assume the commitment to transfer technology and develop capacities, either through the creation of a technical education center by multinationals as a whole or the adoption of training programs. training with universities or educational centers, for the training of national personnel, in order to integrate the Panamanian workforce required by companies.

With this new special regime, multinational companies will be able to benefit from the comparative advantage of connectivity that Panama offers in the region, the geographical position, as well as the benefits and tax, labor, immigration and customs incentives established by the new law. to capitalize on the benefits of the special regimes already existing in the free zones of Panama Pacifico and Colón, among others.

Sectors / Industries

  • Manufacture, assembly, maintenance, re-manufacture and conditioning of products and equipment.
  • Product development, research or innovation of existing products or processes, analysis or laboratory tests related to manufacturing services.
  • Logistics activities such as storage and distribution of components necessary for the provision of services related to manufacturing.

Incentives

  • During the first 5 years, total exemption from Income Tax and later a rate of 5%.
  • ITBMS exemption on services provided to recipients outside of Panama.
  • Exemption from import duties on materials and equipment.
  • Foreign executives holding an EMMA Visa will not count towards the local maximum allowances for foreign staff.
  • 5-year visa for EMMA executives.
  • 3-year visa for EMMA technicians.
  • One-stop shop for the issuance of visas for EMMA workers and their dependents.
  • Permanent Personnel Visa (for a term of 5 years, extendable).
  • Operative Personnel Visa (for a term of 2 years, extendable).
  • Operative Personnel Dependent Visa (equals the Operative Personnel Visa).
  • Definitive residence (once the 5-year term has elapsed).

Requirements for the license

  • Demonstrate the assets of the multinational company.
  • The industrial commercial activities and operations carried out by the multinational company.
  • The listing of shares on the local or international stock market.
  • The companies holding a Multinational Company License for the Provision of Services Related to Manufacturing, in addition to the established requirements, must carry out the activities that generate the income subject to the tax regime provided for in the Law.

The EMMA Law, which is part of the actions of the Economic Recovery plan announced by the government, is based on the SEM regime, which has allowed the installation of 158 multinational companies of this type and generated more than 7 thousand jobs, as well as investments in the order of $ 1,100 million.

We are confident that the success of the SEM Law will be replicated in the new regime of the EMMA Law and that foreign direct investment in the country will increase in the coming years.

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