COVID-19 Panama: Information for businesses
The worldwide outbreak of COVID-19 has many implications for companies doing business in Panama. To inform you in the best way possible, we have made this overview page. On this page, you can find useful information about the current containment situation in Panama, the business support measures of the government, recent economic reports and links to useful resources.
General information COVID-19 in Panama
One week after lifting the quarantaine measures on the 1st of June, the mobility restrictions (of three days a week two hour outside time, based on gender and ID number) were implemented again from the 8th of June onwards in the provinces of Panama and Panama Oeste. Women can go out their designated 2 hours on Monday, Wednesday and Friday. Men on Tuesday and Thursday. There is a weekend curfew from Friday 7 p.m. to Monday 5 a.m. The measure has been taken after an increase in cases and will last for an indefinite amount of time. In the whole country there is an evening curfew from 7 p.m. till 5 a.m. the next day. All events and activities involving the agglomeration of people remain suspended until further notice.
Gradual economic re-opening
On May 11, the Panamanian government announced a gradual opening of economic activity from Wednesday May 13. The opening goes according to a roadmap with six blocks of different types of economic activities (see roadmap).
There are currently two blocks that are open:
- Block 1 (since May 13): e-commerce retail sales, mechanical workshops, technical service, industrial aquaculture and artisan fishing
- Block 2 (since June 1st): construction of public works, non-metallic mining and industry.
There is no date yet for the reopening of block 3 (non-essential wholesale & retail, professional services). Read the press release by MICI. To go to work, companies in the opened blocks need to apply for passes via this platform set-up by the Ministry of Trade & Industry (MICI).
The Health Ministry published guidelines that companies must comply with in order to “guarantee” a safe return for workers in the midst of the coronavirus pandemic. Read the guidelines here. When re-opening, companies must also inform the Ministry of Labor and Labor Development (Mitradel) with a list with personal data of the workers who will return to their jobs.
Nb. Small companies (<51 workers) are exempt from creating health and hygiene committees and protocols.
All international commercial flights are suspended from March 22 onwards. All commercial domestic flights since March 25. The suspension of commercial flights is extended with another 30 days, until August 22 (Decreto Ejecutivo 869). Regarding cargo, KLM has a direct cargo flight 3 times a week from Amsterdam to Tocumen Airport. Read the latest travel advice and travel advice FAQs (both in Dutch) prepared by the Netherlands Embassy in Panama-City.
In the interior of the country there are many roadside sanitary checkpoints. Travel to/from/in the interior of Panama is only possible with a pass (salvoconducto) from the Panamanian Ministry of Health (in case of humanitarian reasons) or other ministries (for other reasons such as work in block 1 & 2).
Measures in other countries
If you would like to see policy measures of other countries in the region or worldwide, then check out the OECD COVID-19 country policy tracker.
COVID-19 Economic impact Panama & Latin-America
Panama’s GDP is projected to decrease with 2% this year due to Covid-19, according to the latest report by the World Bank published in June. Despite the fact that Panama does not escape the effects of COVID-19, due to its interconnectedness with the world economy it is forecasted to be one of the least affected economies in the region. The region Central America is expected to experience a decrease in GDP of 3.6%. Costa Rica (-3.3%), Guatemala (-3%) and Uruguay (-3.7%) show similar impacts to Panama. Mexico (-7.5%), Brazil (-8%) and Peur (-12%) are expected to be hit the worst. See Latin-America GDP table. Positive note: A return to 4.2% growth is expected in Panama for 2021; LAC-region 0.4%. More info & Full Report
COVID-19 Business Support Panama
The Panamanian government has taken a number of measures to mitigate the impact of COVID-19 on businesses. They can be broken down into employment, tax, administrative and other measures. Here are our selected highlights that might be applicable to your business:
> A moratorium on payments to banks till 31 December 2020 regarding residential mortgage loans, personal and business loans, credit cards, loans to Small and Medium-Sized businesses (SMEs) and several other loans (Agreement 4 May 2020 ABP – Association Bancaria de Panama), extension: Law 156 (1 July 2020).
> A moratorium on payments for telephone, cell phone, internet and electricity services for four months, retroactively applied from 1 March 2020. Beneficiaries also include SMEs affected in their income. After this period, ceased payments will be made pro-rated over three years. (Law 152, 4 May 2020).
> A moratorium on municipal tax payments until July 31 2020 (Acuerdo Municipal No.94)
> Suspension of evictions and freezing of rental fees regarding homes and real estate for commercial, educational, industrial, and professional use (during the state of emergency + 2 months) of those affected by the crisis. The freeze includes rent increases and penalties for unilateral contract termination and interest for late payment (Executive Decree 145 of 1 May 2020).
> Temporary modification of the working day (Regulated by Executive Decree 71 of 13 March 2020). Possibilities for modification of fees (wages) and work week (part-time work).
> Suspension of employment contracts (Executive Decree 81, March 20, 2020 and extension with another 30-days via Executive Decree 97 (page 10), May 29 2020) based on force majeure and fortuitous event – needs authorization by Mitradel
> Extension of the term for payment of various 2019 taxes to DGI: Payment of income tax, ITBMS and dividend tax for natural and legal persons extended till July 31th Executive Decree 256, July 16th,2020, Executive Decree 251, March 24th, 2020 & Executive Decree 298, May 27th, 2020).
> Extension of the term for filing the 2019 income tax declarations for natural and legal persons: extended till July 17th (Executive Decree 251 of March 24th, 2020 & Executive Decree 298, May 27th, 2020).
> Small business taxpayers registered with AMPYME will enjoy 1 more year of exemption of income tax (if expired in 2019/2020) – announcement by the Ministry of Economy & Finance (MEF) 19 March 2020
> Teletrabajo Law regulating working from home (Law 126 of 2020).
Recommended resources for further reading on COVID-19 business support measures in Panama
- ARIFA COVID-19 Resource Center – with regulation index and FAQs
- Overview of the Netherlands Embassy in Panama-City – with both Panamanian & Dutch measures
- KPMG Government & Institution measures in response to COVID-19 – Tax measures
- DELCO opciones laborales para las empresas ante el COVID-19 – Labour law measures (in Spanish)
- DGI – Alivio Tributario por el Coronavirus – Tax measures and online procedures (in Spanish)
COVID-19 Business Support Netherlands
> Corona: Dutch government measures overview (KVK / business.gov.nl)
> The Coronavirus and your company: government measures to help businesses (KVK / business.gov.nl)
> The coronavirus – FAQ for entrepreneurs includes an international business & travel section (source: KVK / business.gov.nl)
> Corona Calculator VNO-NCW– calculates how Dutch corona support measures can help your company (in Dutch)
> Informatie over het coronavirus voor ondernemers – by NLinBusiness (in Dutch)
Video Dutch businesses in Panama during the crisis
Would you like to know how Dutch businesses in Panama are experiencing the crisis? And dealing with it? Watch the video!
Holland House Panama Business Support
We understand that these are difficult and uncertain times for businesses everywhere and want to support you where we can. In the following weeks, we’ll keep organizing webinars and digital events on relevant topics (such as managing your staff remotely) and keep businesses updated via our social media channels (Twitter / LinkedIn) and Panama Biz Update newsletter (subscribe here).
If you have questions, you can contact us here.