Panama: Benefits granted under “SEM Visa” not unconstitutional (Supreme Court decision)
Foreigners holding a multinational company headquarters permanent staff visa
Supreme Court decision
The Plenary of the Supreme Court held that the benefits granted to foreigners holding a multinational company headquarters permanent staff visa ("SEM Visa") are not unconstitutional.
The constitutionality of the SEM Visa was challenged on the basis that it grants an unfair privilege to foreigners who are income tax-exempt, while nationals must pay income tax on the income they receive, and the hiring of foreign workers under the SEM Visa program weakens the working conditions and living standards of the national worker.
The Plenary of the Supreme Court rejected those arguments because:
- The SEM Visa serves the legitimate purposes of attracting and promoting investment, job creation and technology transfer, making Panama more competitive in the global economy, stimulating domestic economic growth, and attracting foreign technology.
- Foreigners are categorized as temporary residents for special policy reasons in contrast to nationals, and foreigners cannot work in companies outside the SEM Visa regime, while nationals can.
- The special treatment under the SEM Visa regime is not based on factors of race, birth, disability, social class, gender, religion or political ideas, but on the basis of socio-political and economic policies.
Read a November 2022 report prepared by the KPMG member firm in Panama
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