Having a minimum of five full-time permanent employees is one of the requirements that companies must meet in order to obtain a Regional Offices of Multinational Corporations license, if a bill from the Varela administration succeeds.
The bill presented by the Ministry of Commerce and Industries (Mici) to the National Assembly contemplates, among other things, the new conditions that must be met by companies seeking to obtain a license as Regional Offices of Multinational Corporations (SEM by their initials in Spanish).In addition, it details a proposed law reform, under which companies must generate annual operating expenses in the country of at least $500,000.
Within the conditions to operate under the Multinational Enterprise Headquarters regime in Panama, the requirement for a worldwide number of employees has been changed to instead include a requirement to have a presence in more than 40 countries.
From a statement issued by the Ministry of Trade and Industry:
The Ministry of Commerce and Industries (MICI) wishes to inform the public that the Multinational Enterprises Licensing Commission (SEM) has drafted and approved a new resolution replacing the requirement for a worldwide number of employees for a requirement to have a presence in more than 40 countries.Resolution 19-17 was repealed in its entirety.
GSK has obtained a licensed to operate under the Multinational Enterprises Branch scheme.
Sridhar Venkatesh, vice president and general manager for Central America and the Caribbean, explained to Laestrella.com.pa:"... from our SEM office we will run the site our Pharmaceutical Divisionfor Central America and the Caribbean and the site for our Demand and Substitution hub for Latin America. With this opening, there will now be more than 300 jobs that will be generated in the country. The projected investment for this project over three years is approximately $2 million."
The Chinese multinational Midea, already present in South America, plans to invest $30 million in expanding and reaching out to markets in Mexico, Central America and the Andean region.
The company Midea, founded in 1968 in Guangdong, China, believes that there is "... a lot of room for expansion"in this region. This was explained to EFE by the Brazilian Joao Cláudio Guetter, president of the Latin American operation.
Grupo Lala, Pandora and The Estee Lauder Companies are three of the companies who have requested approval to start operations under the SEM regime in the first half of 2017.
Prensa.com reports that "...The other companies that operate under the Multinational Enterprises Regime (SEM by its initials in Spanish) are Hazama Ando Corporation from Japan (advice on general construction and civil engineering services); Mondo Ibérica, S.A. from Spain (sports center facilities, from artificial turf, seating systems, to pavements, etc.); Elbert Software, from Argentina (licensing, import and export of enterprise application software and IT security)."
At the close of the first semester 13 new licenses will have been approved giving foreign companies the ability to operate under the Site of Multinational Corporation regime.
The companies that requested permission to set up in the country under the Site of Multinational Corporation (SEM) regime come from the United States, Denmark, Scotland and the Netherlands, among other countries, explained Trade Minister Augusto Arosemena.
The initiative aims to expand the scope of the Law on Multinational Companies to provide the same benefits to industrial companies who export their entire production.
In Panama discussion is taking place of a new law for Branches of Extended Multinational Enterprises (SEMA by its initials in Spanish), an extension of the law on Multinational Corporations known as SEM, in order to attract industrial companies with some similar benefits to those contained in the SEM.
Cities far away from the capital which have free zone regimes, labor and are close to ports, are becoming attractive places for businesses.
The characteristics of the so-called "emerging cities" outside of the greater metropolitan area, are mainly being exploited by multinational companies who want to operate under free zone schemes and near port terminals and areas with good road access.
The special tax regime for multinationals which have an established site in Panama remains the main factor, while the low supply of trained personnel has been identified as a serious problem.
In addition to tax incentives offered to companies that set up offices, there are also special areas such as Panama Pacific and the Colon Free Zone, whose special schemes offer other incentives for companies to set up there.
New licenses have been approved for five multinational companies in the finance, engineering and customs security sectors, who will operate under the incentive scheme of Act 41 of 2007.
The companies which were recently authorized to operate under the Law of Multinational Companies come from countries such as France, South Korea, Switzerland, China and the Netherlands.
Under the benefits granted by the law 41 of 2007 to date, 96 Multinational Enterprises have registered in the country, and the figure is estimated to reach 100 by the end of 2013.
This was confirmed by the Deputy Minister of Foreign Trade, José Pacheco. He explained that currently they are analyzing a group of companies interested in applying for the benefits for multinationals, " which we expect to evaluate and submit to the Licensing Commission soon, and we are confident that we will reach our goal."
In the first three months of 2011 direct foreign investment totaled $746 million, an increase of 21% compared to the same period in 2010.
Kristelle Getzler, the Ministry of Economy for the State, said that in the first six months of 2011, seven new multinationals settled in the country, among which are TLAS Copco from Sweden, and Merck and Bauer from Germany.