What is EMMA?

It is a license issued by the Ministry of Commerce and Industries for Multinational Companies, whether foreign or national, that from Panama carry out operations aimed at offering the services defined in the law and that we mention below, to their parent company or their subsidiaries or their affiliates or to companies associated to such entities of the same group.

This law shall only be applicable in the Panamanian territory to operations of Multinational Companies for the provision of services related to manufacturing. The EMMA License shall be granted indefinitely.

I. Services that can be provided by Multinational Companies under EMMA License:

  • Services related to the manufacture of products, machinery, and equipment, rendered to companies of the business group.
  • Services related to the assembly of products, machinery, and equipment, rendered to companies of the business group.
  • Services related to the maintenance and repair of products, machinery, and equipment rendered to companies of the business group.
  • Services related to the remanufacture of products, machinery and equipment rendered to companies of the business group.
  • Services related to the refurbishment of products rendered to companies of the business group.
  • Services related to product development, research or innovation of existing products or processes rendered to the business group.
  • Services related to analysis, laboratory, testing, or other services associated with manufacturing, rendered to companies of the business group.
  • Services related to logistics such as storage, deployment and distribution center of components or parts, required for the rendering of services associated with manufacturing.
  • Any other similar service previously approved by the Cabinet Council by means of a grounded resolution, provided that it complies with the principles set forth in this law.


II. Requirements that companies must comply with to obtain an EMMA license:

  • Assets of the multinational company.
  • The locations or affiliated companies, headquarters or operating subsidiaries of the multinational company.
  • The commercial or industrial activities or operations carried out by the multinational company.
  • The listing of shares on the local or international stock market.
  • The minimum number of full-time employees and the annual operating expenses of the multinational company in the Republic of Panama. In both cases, they must be appropriate to the nature of the business carried out by the company.
  • Any other element or information that the Commission considers convenient to establish and evaluate as a pertinent and necessary requirement, in order to promote an adequate use of the regime.

The companies holding a Multinational Company License for the Provision of Services Related to Manufacturing, in addition to the requirements established in this article, must carry out the activities that generate income subject to the tax regime provided in this Law.


III. Obligations of companies with an EMMA license:

  • To submit to the Technical Secretariat of the Multinational Companies Licensing Commission an annual report containing the statistics concerning their operations within the national territory.
  • The obligation, if any, to immediately inform to the Technical Secretariat of the Multinational Companies Licensing Commission of any change in the status of their operations in the country and of its legal personality.
  • To render services related to manufacturing only to the Business Group to which it belongs, in accordance with the activities allowed by the law.
  • To operate in the Republic of Panama as a foreign company registered in Panama or as a Panamanian company owned by the multinational company, its subsidiaries, or its affiliates.
  • It is important to mention that a company that directly renders services to clients or to companies which are different or unrelated to its Business Group shall not be considered as a company with an EMMA license.


IV. Additional activities of EMMA companies

If a company with an EMMA license wishes to carry out additional activities in the Republic of Panama under the Multinational Companies System (Law 41 of 2007), it may request an authorization from the Technical Secretariat. The Technical Secretariat must consider all the documentation and information already in the files of the multinational companies for the rendering of services related to manufacturing, to ensure an expedited authorization process. Since these are different systems, separate accounting must be kept, in addition to the material requirements applicable to them.



When applying under one of the above-mentioned services, the company with an EMMA license shall be able to enjoy a series of tax, immigration, and labor incentives.

1.- Tax: Companies which obtain an EMMA license shall automatically enjoy the guarantees established in article 10 of Law 54 of 1998 on the Legal Stability of Investments. In other words, the duties and taxes established at the time of the issuance of their license are maintained for 10 years.

Companies holding an EMMA License must pay income tax in the Republic of Panama on net taxable income derived from services rendered at a rate of 5%. They must liquidate and pay the income tax by means of the annual income tax return, and they may include within their deductible expenses the expenses incurred for labor remuneration of all their employees, which shall proceed even if the employee receiving the salary is exempted from income tax.

They may also apply as an income tax credit, the amount actually paid for this concept or similar abroad, with respect to the taxable income generated in the Republic of Panama derived from the rendering of services to non-residents, as well as the amounts withheld by taxpayers in the Republic of Panama. When applying this credit, the company must pay, as a minimum 2% of the net taxable income generated in the Republic of Panama.

Legal or natural persons which carry out transactions with related parties that are EMMA companies shall be subject to the Transfer Pricing system in accordance with the provisions of the Tax Code.

Since these are export services, they shall not cause Transfer of Movable Personal Property and the Rendering of Services Tax (ITBMS), as long as they are rendered to persons who do not generate taxable income within the Republic of Panama.

Exemption from the payment of dividends, supplementary tax, and tax on branches, regardless of whether they are local, foreign, or exempted.

They are not subject to the use of fiscal equipment; however, they are under the obligation to document their activities through invoices or equivalent documents which enable the due control, recording, accounting, and auditing of the performed transactions by the General Directorate of Revenues.

They shall not be required to obtain a Notice of Operation for the provision of the services set forth in the EMMA Law.

They are exempted from all taxes, encumbrances, duties, or import fees on all types or classes of merchandise, products, equipment, and other goods in general including, but not limited to, machinery, materials, packaging, raw materials, consumables, supplies and spare parts which are used or required for the performance of manufacturing-related services.

These may not be sold, leased, pledged, or auctioned off without payment of the corresponding taxes, fees, and duties.

The products manufactured, processed, assembled or remanufactured by the company established in a special economic area in the national territory, free zone, duty-free zone or an area of control and customs surveillance may be entered into the national tax territory by a company of the Business Group paying the respective tariffs or customs taxes, only on the value of the raw materials, and foreign components incorporated in the product, based on the tariff corresponding to each raw material or component incorporated in the final product.


1.2- Tax incentives for Personnel holding a Permanent or Temporary Visa under EMMA:

Exemption from income tax, social security and education insurance contributions, salaries, and other labor remunerations to the extent that the salaries and remunerations are paid, assumed, and acknowledged as personnel expenses in the company’s accounting.

Exemption from the payment of taxes that could be applied to household goods due to imports when the employee moves to the Republic of Panama for the first time. In addition, you may apply to the National Customs Authority for a total duty-free allowance once every two years for the import of a motor vehicle for personal or family use.


2.- Immigration: The EMMA Law creates new visas specifically for foreign employees who are hired. The types of visas are as follows:

  • Permanent Personnel Visa (for a term of 5 years, extendable).
  • Operative Personnel Visa (for a term of 2 years, extendable).
  • Operative Personnel Dependent Visa (equals the Operative Personnel Visa).
  • Definitive residence (once the 5-year term has elapsed).


3.- Labor aspects for the personnel hired with an EMMA license:

The company covered by an EMMA License shall be able to hire foreign employees in a position of trust to hold managerial jobs at high and medium levels, as well as temporary personnel, required for its operation.

Any foreign person who has the status of a dependent of a foreign employee under a Visa or a Residence Permit may work in the Republic of Panama, if he or she meets the necessary conditions to apply for a work permit.

Dependents who obtain a work permit and work in the Republic of Panama shall be subject to income tax and social security and educational insurance contributions for the salaries and other remunerations received.

Whoever holds a Permanent Personnel Visa or a Temporary Personnel Visa under EMMA may not engage in work activities other than those performed in the multinational company.

Any employee who has a permanent or temporary EMMA company personnel visa shall be subject to the rules of the Labor Code, except for those exceptions provided for in this law.

Companies may sign labor contracts in any manner established by the Labor Code with foreign employees under the terms of this law.

Companies covered by an EMMA License must ensure the exchange of knowledge and training of Panamanians who wish to apply for jobs in these multinational companies.


4.- License Cancellation and Tax Effects:

The company which carries out in the national territory activities different from those authorized by law shall have its license cancelled and shall be responsible for the unpaid taxes, with the fines, surcharges, interests, and penalties according to the Fiscal Code.

Employees who enter Panama under the protection of the law without actually working in the multinational company shall be sanctioned with a fine of up to five thousand dollars (US$5,000.00).

The company that does not make the communications which are established as obligations of the law or that do not comply with the other provisions may be sanctioned with a fine of up to one hundred thousand balboas ($100,000.00).


5.- Establishment and Legal Stability:

The companies shall automatically enjoy, as of the time of their registration, the guarantees in matters of legal stability of the investments. From the granting of the License, they shall enjoy for 10 years the fiscal, labor, immigration, and legal benefits.

We hope that the information provided is of your total utility, if you require additional assistance, do not hesitate to contact us at

Ana Cristina Arosemena


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