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
As of Monday 24 August, the restriction of mobility by identification number and time slots was lifted, and on 14 September the gender based mobility restrictions as well. On October 24, the total quarantine including sundays was lifted. On December 8, movement restrictions in the province of Panama changed. On December 18, a new curfew got established. Also, a total quarantine had been declared from the 25th until the 28th December 2020 and from the 1st until the 14th January 2021. From the 15th January 2021 the total quarantine has been lifted during the week. Only in weekends a total quarantine is implemented from 9:00pm on Fridays until 4:00am on Mondays. Moreover, a general curfew is applicable everyday from 9:00pm until 4:00am.
All events and activities involving the agglomeration of people remain suspended until further notice.
Gradual economic re-opening
On August 25 the Panamanian government approved a new reopening plan. The plan will be scaled according to COVID-19 indicators. Here are some of the highlights with dates:
- 7 September: reopening of construction industry and related activities, free trade zones, car wash, marinas and sport fishing activities, tailor shops and dressmakers and shoe stores.
- 14 September: end of mobility restrictions by gender and invalidation of safe-conduct passes (salvoconductos). Curfew from 11:00 p.m. to 5:00 a.m. Mo-Sa and full quarantine on Sunday.
- 28 september: retail, restaurants, professional services, administrative and general services, with the presence of the public. National aviation.
- 12 October: Reopening of international aviation, hotels & lodgings, tourist activities, non-essential transport (recreational and tourism), creative and cultural industries, music and art academies.
In September retail, restaurants, administrative and professional services have been allowed to open for public. In August the government re-opened various commercial activities: some construction projects, online retail trade, car sales, beauty parlors and barber shops and activities of NGO’s. The economic activities of mechanical workshops, technical service, industrial aquaculture and artisan fishing, non-metallic mining and industry were already reopened in May and June.
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.
Travel restrictions & sanitary measures
All international commercial flights were suspended from March 22 onwards. On September 23, Panama extended the ban on international commercial flights again to October 11. Domestic aviation reopened on September 28 and international aviation on October 12 .
Upon entering Panama, you need to bring a certificate of a Swab Test / PCR with a negative result, done 48 hours prior to boarding the flight. One of the providers where you can make an appointment for the test and obtain a certificate is KLM Health Services. If not counting with this negative result, you will be oblidged to do a quick test with a cost of $50,- before passing customs. In the case you result positive on Covid-19 you will be taken to a Hotel Hospital assigned by the Ministery of Health. If results are negative, there is no need to go into quarantene.
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
Where in June was foreseen a decrease in the GDP of Panama by 2% by the World Bank, new results and forecasts were presented by the International Monetary Fund (IMF) in October, expecting its decrease to become -9%. Where Latin America and the Caribbean (LAC) represent 8,2% of world’s population, so far it represented 28% of global Covid-19 cases, and even 34% of its deaths. The effects of this pandemic resulted in a historic collapse in economic activity during the 2nd quarter of 2020, provoking a 40% decrease in Panama, comparing May to January. Panama’s discretionary fiscal measures mainly focused on support for the health system and partly for direct support for households in order to prevent increasing social impact.
GDP is expected to decline by -8,1% in 2020 for LAC, slightly recovering in 2021 up to 3,6% growth. Panama is expected to have a positive recuperation because of strong recovery in export and remittance combined with low oil prices, growing its GDP by 4% in 2021. Colombia, Dominican Republic, El Salvador and Guatemala are projected to have the same growth percentage. On the contrary, Puerto Rico (1,5%), Brazil (2,8%), and Costa Rica (2,3%) are below the projected average GDP growth. The expected recovery is subject to the evolution of de pandemic and required measures, probably affecting financial conditions.
In general productivity of companies is contemplated to suffer by aligning operations to social distancing. Changes in policy priorities are not expected until medical treatments are accessible and the pandemic is controlled. A positive point for LAC is that the pandemic caused the necessity to invest in communication technology which created improved accessibility to basic services and utilities, health and education.
Download the full Regional Economic Outlook for the Western Hemisphere by the IMF here.
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 30 June 2021 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), extension 22 October.
> 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).
> 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 & reduction of work and salary (until December 31) (Regulated by Executive Decree 71 of 13 March 2020). Possibilities for modification of fees (wages) and work week (part-time work) (Executive Decree 101 of July 13, 2020).
> 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) Through Law 157 of August 3, 2020 the extension of the suspension of employment contracts was approved until December 31, 2020. Based on force majeure and fortuitous event – needs monthly authorization by Mitradel
> Tax amnesty for the payment of taxes (Law 160, September 1, 2020) is extended until December 31, 2020. The taxpayer may sign payment arrangements, paying 25% of the nominal tax, forgiving up to 85% of the interest, surcharges and tax penalties. Additionally, the deadline for submitting the forms that should have been submitted until February 29, 2020, is extended until December 31, 2020.
> Payment without penalty of the single annual rate of public limited companies, limited liability companies and any other legal entities, as well as private interest foundations, which should be canceled by July 15, 2020, is extended until December 31, 2020 by Law 161, September 1, 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)
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 would like to watch our hosted webinars on a variety of topics, please check out our youtube channel.
If you have questions, you can contact us here.