Multinational Companies Law Moves Forward

The Panamanian Assembly approved in first debate the bill creating the Special Regime for the Establishment and Operation of Multinational Companies for the Provision of Services related to Manufacturing.

Wednesday, July 29, 2020

This bill aims to create the Special Regime for the Establishment and Operation of Multinational Enterprises for the Provision of Services Related to Manufacturing (EMMA), in order to make Panama a more competitive nation in the global economy and adapt the attraction of investments in the provision of services and productive processes, manufacturing, as well as the generation of jobs and technology transfer, the Assembly reported.

The statement dated July 28, 2020 states that "... This new regime would cover services related to the manufacture, assembly, re-manufacture, conditioning, maintenance and repair of products, as well as logistics services, among others.

Multinational companies that are granted an EMMA license will automatically enjoy the guarantees established by Law 54 of 1998, on stability
".

Ramon Martinez, Minister of Commerce and Industry, said that "... the Republic of Panama depends to a great extent on direct foreign investment, so we must take measures to be more competitive in attracting investment, since it costs us for the cost of energy and labor."

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More on this topic

Multinational Companies Law Endorsed

August 2020

Deputies of the Panamanian Assembly approved in third debate the bill creating the Special Regime for the Establishment and Operation of Multinational Companies for the Provision of Services related to Manufacturing.

The services of these multinationals will be able to be developed in different provinces of the country and will work in product manufacturing, equipment machinery, product packaging services, machinery and equipment, the Assembly informed.

Decrease in SEM Companies' Arrival in Panama

January 2019

Modifications made to the law regulating the SEM regime in the country, would have been the reason for reporting during last year the establishment of only seven new companies of this type.

Among the reforms to the special regime for the establishment and operation of Sedes de Empresas Multinacionales (SEM) made in 2018, it is worth highlighting that companies must have a minimum number of full-time permanent employees, and in addition, a tax rate of 5% was imposed on the net taxable income derived from the services rendered.

New Rules for SEM Companies in Panama

July 2018

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.

Transfer Pricing in Guatemala

December 2012

A new approved law aims to regulate transfer pricing, but detailed rules are still missing.

S21.com.gt reports that "In Guatemala the regulation of the transfer pricing has been approved as part of the tax update package, according 10-2012, to try to prevent related companies (parent and subsidiaries, for example) from manipulating prices when exchanging goods or services, so that they increase their costs or deductions in order to reduce taxes. "

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