News and Publications
March 2010
Law on the Seat of a Multinational Company (SEM)
By means of Law 41 of August 24, 2007, a special system was created for the establishment and operation of Seats of Multinational Companies and the Commission of Licenses for the Seats for Multinational Companies, and other provisions were issued; the Republic of Panama pretended to facilitate access to the already existing benefits in labor and tax matters, for the Seats of Multinational Companies.
With superb attractiveness, our geographic position, with access by land, sea and air, tropical weather the entire year, free of natural disasters, with an open service economy, highly trained human resources, the use of the dollar as legal currency, the international finance center, the worldwide class communication platform, and the economic, political and social stability, makes Panama the ideal destiny to establish Regional Seats or Seats for Multinational Companies (SEM).
Law No. 41 defines a SEM company as a multinational company that from Panama, carries out operations address to offer the services define in this Law, to its Head Office or its subsidiaries or its filial or associate companies, or that establishes it Head Office in Panama, hereinafter the Company Group. The Seats shall always be part of multinational companies with international or regional operations or important in their country of origin. It is understood for all purposes, as the seat of a multinational company (SEM), those companies that offer services to related companies and that have their own income.
Law No. 41 establishes tax benefits for the Seat of a Multinational Company as well as for the foreign medium-high level personnel, we may stand out:
- Total exemption of the Real Estate Transference Tax, Furniture and Services for operations carry out outside the national territory.
- Exemption from income tax, social security and educational insurance , when their salaries come from abroad (head office)
- Exemption of the Import Tariff for furniture and household goods when the employee is transferred to Panama for the first time.
Additionally, it offers immigration and labor benefits, especially for foreign employees that the SEM contracts. Among the activities that SEM can carry out with its main company group, are the followings:
- Guidance and/or administration for the operation in a specific geographic or global area of a company of the company group.
- The logistic and storage of components or parts required for the manufacturing or assembling of manufacturing products.
- Technical assistance to companies of the company group or to customers who had acquired any product or service from the company.
- The accounting of the company group
- The preparation of plans that are part of the designs and/or constructions or part of same, which constitute a part of the typical course of the business activity of the head office or any of its subsidiaries.
- The counseling, coordination and follow-up of the market guidance and publicity of assets or services produced by the company group.
- The electronic processing of any activity, including the consolidation of the operations of the company group.
- The financial management (treasury) to the company group.
- The support of operations and investigation and development of products and services of the company group.
- Any other service previously approved by the License Commission of SEM.
* With great pleasure our professional team shall counsel you on the requisites establish for the application of a license and the establishment of a SEM.