The ten mistakes, with their cost
| # | Mistake | Consequence | Legal basis |
|---|---|---|---|
| 1 | Overstaying as a tourist | 50 balboas per month or fraction; 100 if married to a Panamanian or with Panamanian children. General stay of 90 days; 180 for the United States and Canada | Decree Law 3 of 2008, article 84; Executive Decree 320 of 2008, article 16 |
| 2 | Working without a work permit | For the foreigner, 1,000 balboas the first time, 5,000 the second and permit cancellation the third. For the employer, 500 per worker the first time, 1,000 the second, 10,000 the third and cancellation of the operating notice the fourth | Decree Law 3 of 2008, articles 86 to 91; Law 59 of 2017, amending article 20 of the Labour Code |
| 3 | Buying a possessory right as if it were property | Without a title registered in the Public Registry there is no possible mortgage, there are competing claims and the risk is civil: losing the money or the asset | Law 80 of 2009; files before the National Land Authority |
| 4 | Not declaring the company’s beneficial owner | Suspension of corporate rights ordered by the Superintendency of Non-Financial Subjects; fines for the resident agent | Law 129 of 2020, article 24; Executive Decree 13 of 2022 |
| 5 | Missing the annual flat fee | Surcharge of 50 balboas per year; after two unpaid periods, a 300 fine, delinquency note and block on registrations; after ten, dissolution | Fiscal Code, article 318-A |
| 6 | Renting without registering the contract | All lease contracts are registered at the Housing Ministry with the security deposit; unregistered, the deposit is unprotected and wrongful retention is fined at ten times the amount | Law 93 of 1973, articles 5 and 68 |
| 7 | Driving on a foreign licence beyond 90 days | Tourists may drive 90 days on their licence; on obtaining immigration status it must be validated, once only, with an apostilled certification, an eye test and 40 balboas | Executive Decree 640 of 2006 |
| 8 | Not updating the address with Immigration | 100 balboas the first time, permit cancellation the second, deportation the third | Decree Law 3 of 2008, article 87 |
| 9 | Confusing immigration residency with tax residency | Tax residency arises with more than 183 days in the year or a permanent home in Panama; the certificate is issued by the tax authority and is what banks and the country of origin ask for | Fiscal Code, articles 694 and 762-N |
| 10 | Believing marriage to a Panamanian grants citizenship | It gives access to residency and cuts the naturalisation wait to three years, which requires Spanish, a history exam and renouncing the original nationality; it is never automatic | Political Constitution, article 10 |
Three mistakes that deserve detail
A possessory right is not a deed
In coastal areas and islands much land is national and what is sold is a right of possession, not a title. It is processed as an administrative file before the National Land Authority and does not appear in the Public Registry as a property. Without a registered property there is no mortgage, no title insurance and there may be another possessor with the same claim. Before paying, the Public Registry’s online search shows whether a property exists in the seller’s name.
A company does not look after itself
A corporation pays a 300 balboa flat fee every year, must have a resident agent, keep accounting records for five years and have its beneficial owner registered. The foreigner who sets one up to buy a property and forgets about it discovers years later that they cannot sell because the Public Registry does not record acts of delinquent companies. Panama suspended more than 22,000 companies in 2022 for three periods of unpaid fees.
The work permit is a separate procedure
Residency is granted by Immigration; the work permit by the Labour Ministry, and they are two files. The Labour Code requires at least 90% of a company’s ordinary staff to be Panamanian, with up to 15% foreigners in technical posts, and the Ministry runs operations in which it identifies foreigners without permits. Not even permanent residency exempts from applying, except in categories that include it.
Most of these mistakes are avoided with a consultation before acting, not after. A firm serving foreigners in all three areas, immigration, companies and banking, such as Legal Solutions Panamá, usually reviews immigration status, the company’s standing and tax residency together at the first meeting, because the three intersect.
What nobody has answered yet
- How many overstay fines does Immigration collect a year? There is no public figure; in 2025 a 50% waiver of those fines was approved until April 2026, a sign the volume is high.
- How many foreign-owned companies are suspended for delinquency? The Public Registry had 428,995 legal entities with a delinquency note in 2022, with no breakdown by the owner’s nationality.
- What is the fine for driving on an expired foreign licence? It depends on the Transit Authority’s regulations and no published official figure was found.
Frequently asked questions
What is the fine for overstaying in Panama as a tourist?
50 balboas for each month or fraction of overstay, and 100 if the person is married to a Panamanian or has Panamanian children, according to the National Immigration Service.
What happens if I work in Panama without a work permit?
The foreigner pays 1,000 balboas the first time and 5,000 the second, and loses the permit the third. The employer pays 500 balboas per worker the first time and may lose its operating notice by the fourth.
Does marrying a Panamanian grant citizenship?
No. It gives the right to residency and cuts the naturalisation wait from five to three years, which requires Spanish, an exam and renouncing the original nationality.
What does it cost not to pay a company’s flat fee?
A 50 balboa surcharge per year in arrears; after two unpaid periods, a 300 balboa fine plus a delinquency note; after ten periods, dissolution.
Related articles
- Buying property in Panama as a foreigner
- Panama Public Registry: online search
- Taxes a company pays in Panama
Sources
- National Immigration Service, fines and frequently asked questions.
- National Immigration Service, Decree Law 3 of 2008.
- National Assembly, Law 59 of 2017 on fines for foreign workers without permits.
- Labour Code, article 17.
- Ministry of Economy and Finance, Law 129 of 2020 on beneficial owners.
- Fiscal Code, article 318-A on the flat fee.
- La Prensa, suspension of 22,500 delinquent companies.
- Housing Ministry, registration of lease contracts.
- La Estrella, foreign licences and validation.
- FAOLEX, Law 80 of 2009 on possessory rights in coastal areas.
- OECD, tax residency in Panama.
- Electoral Tribunal, Political Constitution, article 10.
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