When one thinks of Panama several images immediately spring to our mind like Panama hats, the canal and offshore tax havens and so on. But in this article we are going to discuss about the labor laws in a panama company. Panama is one of the greatest business hubs in America. The various factors like geographic, political and legal make Panama a dream destination for entrepreneurs. The legal set up is the boosting factor which is based on Common civil Law. Panama remains a top choice for seeking secure locations for offshore protection of assets.
Monday, May 31, 2010
Panama's Labor Laws
After setting Panama Company certain labor law is to be followed that are as follows:
The Labor Code of 1971 deals with Labor Relations describing the rights and duties of employers and employees. "Subordination" is the key concept of the law. Any relationship where one person is subordinate to another falls within the law. It makes no difference whether the relationship is or is not described as “employment”. The labor law provides social justice to employees against the exploitation and unethical practices of the employer and everyone who is working is abiding by law.
There are certain basic employee rights which must be followed:
1. Written Employment Contract
2. Minimum Wage
3. Maximum Hours
4. Paid Vacation Time
5. Firing Employees
Employee Contracts
You must have your employees sign a written employment contract called an Inscripcion Contratos con trabajadores.
You must file two copies of the contract with the Ministerio de Trabajo y Desarrollo Laboral.
Employers can easily terminate the employee during the first two years. After that, employees have greater protection under the law. The law lists "just causes" for dismissal. Under this, employer has to mention the cause of dismissal. Unlawful dismissals can result in minimal compensation payments. Both parties can contract for "fixed terms".
Minimum wage levels vary according to the employee's seniority.
Vacations: There are 11 public holidays per year. In addition, employees are entitled to a 30 day vacation every year.
13th Month: The law also requires a 30 day paid bonus every year which is known as "the 13th month". This bonus is estimated at one-salary day for every 11 days of work. The 13 month bonus is paid in 3 equal installments: April 15th, August 15th, and December 15th every year.
Unions
Unions are allowed in Panama. Unions can collectively negotiate on behalf of the employees. Strikes are lawful under defined circumstances after a majority vote of the member employees. Conciliation is mandatory before a strike can occur. However, only around 11% of the private sector employees are unionized.
As you know, labor laws are there to protect the interests of disadvantaged employees, but some unions try to make use of it to get political advantage. So beware of such unions.
The Labor Code of 1971 deals with Labor Relations describing the rights and duties of employers and employees. "Subordination" is the key concept of the law. Any relationship where one person is subordinate to another falls within the law. It makes no difference whether the relationship is or is not described as “employment”. The labor law provides social justice to employees against the exploitation and unethical practices of the employer and everyone who is working is abiding by law.
There are certain basic employee rights which must be followed:
1. Written Employment Contract
2. Minimum Wage
3. Maximum Hours
4. Paid Vacation Time
5. Firing Employees
Employee Contracts
You must have your employees sign a written employment contract called an Inscripcion Contratos con trabajadores.
You must file two copies of the contract with the Ministerio de Trabajo y Desarrollo Laboral.
Employers can easily terminate the employee during the first two years. After that, employees have greater protection under the law. The law lists "just causes" for dismissal. Under this, employer has to mention the cause of dismissal. Unlawful dismissals can result in minimal compensation payments. Both parties can contract for "fixed terms".
Minimum wage levels vary according to the employee's seniority.
Vacations: There are 11 public holidays per year. In addition, employees are entitled to a 30 day vacation every year.
13th Month: The law also requires a 30 day paid bonus every year which is known as "the 13th month". This bonus is estimated at one-salary day for every 11 days of work. The 13 month bonus is paid in 3 equal installments: April 15th, August 15th, and December 15th every year.
Unions
Unions are allowed in Panama. Unions can collectively negotiate on behalf of the employees. Strikes are lawful under defined circumstances after a majority vote of the member employees. Conciliation is mandatory before a strike can occur. However, only around 11% of the private sector employees are unionized.
As you know, labor laws are there to protect the interests of disadvantaged employees, but some unions try to make use of it to get political advantage. So beware of such unions.
Panama Company
Panama Company- an overview
Panama remains a top choice for seeking secure locations for offshore protection of assets. Panama is a rapid growing economy and international business centre. It is the fourth largest economy in the Central America. The various factors like geographic, political and legal make Panama a dream destination for entrepreneurs.
The factors which make Panama a dream destination to invest money are listed below:
• Stable legislative environment.
• Developed business infrastructure.
• Stable economy and currency.
• Fully fledged tax haven.
• Language compatibility.
• Stable Government and political situation. The country should be safe to visit.
Conditions on Tax matters
In these changing political times, for those seeking secure locations for offshore protection of assets, Panama remains a top choice. In G-20 meeting, Minister of Commerce and Industry, made clear that government would only go so far in exchanging tax information.
The pre-conditions that were laid down by the minister under which Panama would exchange tax information are as follows:
1) The privacy of persons will not be disclosed and guaranteed against undue interference.
2) There shall be no undue triangulation of information furnished among nations.
3) There shall be no automatic exchange of information.
4) Any exchange of information shall be done based on individual requests supported by a specific and justified principle or law.
5) There shall be a reasonable transitional period with respect to any measure that must be implemented and that has an impact in the international services platform offered by the Republic of Panama, it being understood that the application of any measure shall occur at the same time as similar measures applied in each and every one of the states that are members or not of the OECD and that Panama considers to be competitors in the provision of international services.
To set up a Panama company your first consideration is to decide what type of business structure to use. There are 3 normal business entities here in Panama:
Firstly, Sole Proprietorship where you and your spouse & family operate a business as sole owners.
Secondly, Corporation, where you register with the government as a company issuing stocks, having a Board of Directors and corporate officers.
Thirdly, Partnership, in which two or more persons are involved in running the business.
While a sole proprietorship can be an oral agreement between close family members, the other two entities need the assistance of a Panamanian lawyer. That's because legal documents need to be prepared forming a Partnership or Corporation. If they are wrongly prepared, they will be legally null and void causing a business legal nightmare for its members.
Panama remains a top choice for seeking secure locations for offshore protection of assets. Panama is a rapid growing economy and international business centre. It is the fourth largest economy in the Central America. The various factors like geographic, political and legal make Panama a dream destination for entrepreneurs.
The factors which make Panama a dream destination to invest money are listed below:
• Stable legislative environment.
• Developed business infrastructure.
• Stable economy and currency.
• Fully fledged tax haven.
• Language compatibility.
• Stable Government and political situation. The country should be safe to visit.
Conditions on Tax matters
In these changing political times, for those seeking secure locations for offshore protection of assets, Panama remains a top choice. In G-20 meeting, Minister of Commerce and Industry, made clear that government would only go so far in exchanging tax information.
The pre-conditions that were laid down by the minister under which Panama would exchange tax information are as follows:
1) The privacy of persons will not be disclosed and guaranteed against undue interference.
2) There shall be no undue triangulation of information furnished among nations.
3) There shall be no automatic exchange of information.
4) Any exchange of information shall be done based on individual requests supported by a specific and justified principle or law.
5) There shall be a reasonable transitional period with respect to any measure that must be implemented and that has an impact in the international services platform offered by the Republic of Panama, it being understood that the application of any measure shall occur at the same time as similar measures applied in each and every one of the states that are members or not of the OECD and that Panama considers to be competitors in the provision of international services.
To set up a Panama company your first consideration is to decide what type of business structure to use. There are 3 normal business entities here in Panama:
Firstly, Sole Proprietorship where you and your spouse & family operate a business as sole owners.
Secondly, Corporation, where you register with the government as a company issuing stocks, having a Board of Directors and corporate officers.
Thirdly, Partnership, in which two or more persons are involved in running the business.
While a sole proprietorship can be an oral agreement between close family members, the other two entities need the assistance of a Panamanian lawyer. That's because legal documents need to be prepared forming a Partnership or Corporation. If they are wrongly prepared, they will be legally null and void causing a business legal nightmare for its members.
Friday, April 16, 2010
Panama company
Panama is a rapid growing economy and international business centre. It is the fourth largest economy in the Central America. The various factors like geographic, political and legal make Panama a dream destination for entrepreneurs. The legal set up is also the boosting factor which is based on Common civil Law. Panama is one of the greatest business hubs in America. Panama company is a group of businesses engaged in various services like Offshore Banking Services, Offshore Private Interest Foundation, Yacht & Ship registration and Real Estate Services.
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