- Overview: Panama
- Global PEO and payroll
- Global HR Compliance
- Work permit for hiring expats via PEO
- Expand without a company set up
- Contractor vs. employee: which is better?
Global PEO and Payroll in Panama
As you expand your business operations into new countries, it is essential to understand that each expansion is its unique challenge. Various factors, such as local and home country laws, the type of activities undertaken, and your company’s goals and risk tolerance will dictate your compliance obligations and budget. By carefully considering all of these elements, you can ensure a successful expansion into any new market.
Global Employment Challenges and Pitfalls to Avoid
When you’re hiring a staff to work overseas, some challenges come with that far beyond the nuts and bolts of finding and vetting candidates. These challenges are often overlooked by companies when they think only of locally-hired employees, but can have extreme consequences for businesses who employ people internationally.
Why is this? Because if you’re not careful, you might find yourself unwittingly breaking one employment law regulation or another in your new country. This could lead to fines, other legal issues, and negative public exposure for your brand. It’s not just about being bad for your business, though; it’s also about being bad for the people who work in your company.
Employment Taxes
There are many different types of taxes that businesses have to pay, but employment taxes are one of the most important. These taxes can vary significantly from country to country and can be a large portion of a monthly salary.
In-country Employee Registration
It is essential to ensure that employees are properly registered with the local authorities before they start work. Failing to do so can result in penalties for both the employee and the employer.
Payroll Calculations: Country-specific Requirements
In many countries, payroll calculations vary significantly. For example, employees in some countries may receive a 13th and 14th-month salary halfway through the year or at Christmas as standard. Thus, it’s important to be aware of the payroll practices in your country of employment.
Some countries have different rules when it comes to employment contracts. To avoid any surprises, it is crucial to understand how payroll calculations work in your new country. In some cases, you may be responsible for paying your employees for the entire duration of their contract even if they are not performing as expected or you want to end their employment early. This can be a financial shock to foreign employers who are not used to this practice.
For this reason, it is essential to ensure that you review and understand the terms of the employee’s contract before hiring them, so you know what to expect.
End of Financial Year Reporting
The financial year for many countries ends in March and companies that have a presence in more than one country need to produce financial reports for each country and send them to the relevant government bodies. With the end of the financial year approaching, accountants are busy at work preparing reports, some of which can be complex and difficult to navigate through as they may be on foreign websites with little or no English language support. It is important that you get these reports lodged on time as it could result in late payment penalties.
A lot of these reports need to be completed in the local language, so it is recommended that you use an accountant specializing in the country you are based in to ensure compliance before lodgement deadlines.
This is the reason why many companies outsource payroll management to a global Professional Employer Organization (PEO) as they have experts with deep knowledge of local labor laws and tax regulations in each jurisdiction. In such cases, a Global PEO will ensure compliance with local employment and tax requirements.
Local Employment Contracts Compliance
As an employer, it is crucial to have local employment contracts that are compliant with the law of the jurisdiction in which your employees work. These contracts should be provided in both English and the local language. Do not simply copy and paste your existing contract template from your home country – this could result in non-compliance and serious legal consequences.
When recruiting employees for your business, it is critical to ensure that their employment contract is appropriate for the country where they will be working. A Spanish employment contract may not be valid in Latin America, simply because they are both Spanish-speaking countries.
The language of the employment contract is a crucial detail to keep in mind during the recruitment process, as non-compliance to target country employment laws or any mistakes with the paperwork could cost you money, time, and potentially your business’s reputation.
Employment Contract Termination
The employment termination process can be just as important as the hiring process. This part of employment should not be taken lightly as it can have many implications and consequences, both for the employer and the employee. Therefore, it is important to carefully consider all aspects of the situation before making a decision.
The start of the termination process begins when the employee signs the employment contract. If the termination guidelines are clear and precise from the terminating an employee will be much smoother.
When setting out the terms of employment, it is important to be clear about the notice period (making sure it’s aligned with the country-specific regulations), and what is expected in terms of returning company equipment and a credit card or cash float balance. Non-compete clauses protecting your intellectual property are also important considerations. Doing so will help avoid misunderstandings and potential legal problems down the road.
If an employer does not have clear procedures for the termination in their employment contract, they may face litigation. If an employee feels they have been mistreated, they may become disgruntled and contest the termination legally. This can be costly and difficult, especially if the dispute is in another country with a different time zone and language.
What is a Global PEO (Professional Employer Organization)?
As your business grows, so do your global expansion and employment needs. With a global PEO (Professional Employer Organization) by your side, you can easily take on the world. With our global talent employment team across 190 countries, we’ll help you quickly and compliantly employ the best pre-selected candidates for your business while remaining agile.
And we’ve got you covered when it comes to global payroll, taxes, benefits administration, background checks, and immigration support.
Quick, easy market entry is guaranteed with Acumen International Global PEO as your local legal entity — we’ll help you avoid the risk, cost, and time associated with incorporating. Plus, we’re compliant and secure, adhering to all local laws and regulations.
Use our Global PEO and payroll solution to employ local sales representatives to explore the local market and sell your product there or employ qualified IT personnel for projects of any complexity or duration. You can also test the market for viability and easily withdraw if found unfeasible without having to lose much compared to what could be lost after you had established an entity there.
17 Burdens a Global PEO Can Relieve for Your In-House HR Department
- Global expansion complexity
- Global payroll administration
- Employee benefits administration
- Drafting compliant employment contracts to adhere to local labor and tax regulations in 190 countries
- Lengthy onboarding
- Complex and risky offboarding
- Background checks
- Workforce compensation administration
- Compliance assistance
- Guidance on best practices of voluntary benefits provisioning
- Immigration and relocation support for your ex-pat workforce, such as visa sponsorship and securing work permits
- Lack of institutional knowledge.
- IP right protection
- Lack of local and international legal support
- Convert local contractors into full-time employees
- Business transitions: acquisitions, mergers, close downs
- Need to deal with multiple global employment service providers.
A Global PEO Can Help You Replace Numerous Vendors
When it comes to managing the employment side of your business, there are many options available to get the help you need. an ever-growing number of vendors can assist you with various aspects of your human resource services, including payroll, employee benefits, and more.
Working with a professional employer organization (PEO) is a great way to get all the help you need in one place. PEOs can manage all of your employment-related needs, from taxes and retirement plans to background checks and employee discounts.
Partnering with a PEO saves you time and hassle by consolidating all of your HR needs into one relationship. This also gives you peace of mind knowing that experts are handling everything for you so that you can focus on running your business.
What Services Can a Global PEO Provide in Panama?
Acumen International is a global PEO that provides international employment services to companies with employees working in multiple countries, including Panama. We offer our clients a comprehensive service portfolio that includes:
- Human resources administration, including payroll, taxes, and benefits administration; employee training and development; recruitment; employee relations; compliance training; background or education checks; timekeeping services;
- Regulatory compliance assistance, including payroll tax law and reporting requirements;
- IP protection and offboarding;
- Hiring and HR compliance services, helping you navigate local regulations and avoid prohibited HR practices, including discriminatory job listings, Illegal criminal background checks, misclassified workforce, inaccurate payroll, and tax payments;
- Human resource support;
- End-to-end talent management, including recruiting, onboarding, engagement, performance management, and termination (upon employer approval);
- Liaison with legal counsel on employment issues such as discrimination, wrongful termination, sexual harassment, whistleblower protection, non-compete agreements, severance agreements, and other employment law matters.
How Much Does a Global PEO Charge?
Payroll taxes and service fees can be a big burden for employers. Many companies choose to use a Global PEO (Professional Employer Organization) to help with these costs. PEOs typically charge a percentage of the total payroll, including employee insurance fees. It can be difficult to determine the actual costs for these services, especially when some employer taxes are only paid on wages up to a certain threshold.
Single Global Service Agreement
A global PEO can cover all your international projects within a single contract and add new employees and services as you expand your global workforce in the new countries.
No Required Minimums
We accept projects of any length, with any number of employees.
Flexible Pricing
Whether you need to scale up or down, we adjust your pricing based on the project employee number.
End-to-end Global Employment Solution
We manage all your global services, including employment, recruitment, immigration, legal and global HR consulting, saving you valuable time. And Acumen International covers the cost and saves you the effort of finding and selecting local employment-related service providers.
Acumen International – Your Single Point of Truth and Global Employment PEO Solutions Provider in Panama
- 100 % compliant, quick, easy market entry. Acumen Global PEO is your local legal entity, helping you reduce the cost and time associated with incorporating
- Immediate global employment service coverage in 190 countries
- Both a single point of contact and a dedicated account manager for your project for all target countries
- Compliant and secure global employment operations. We help you adhere to all local laws and regulations in 190 countries
- A single contract for all in-country services (employment, immigration, legal, etc.)
- A single PEO provider assumes full responsibility for your international employees in multiple countries
- Payments are made within the UK or to the UK bank company account
- Fully compliant with standardized procedures and reporting systems
- You can delegate to Acumen Global PEO all HR responsibilities Payroll & benefits administration, background checks, and HR helpdesk
- Standard payroll breakdowns for all target countries
- As soon as we receive your request for a project in any country, we will send you a payroll breakdown and offer within 2 working hours
- Full 100% fee money-back guarantee for the employee or contractor payment delays.
- Tailored and 100% compliant employment contract drafts
- With Acumen in your corner, you can quickly and easily onboard and compensate your employees without risk of legal repercussions
- Acumen Global PEO and payroll solution protects your company’s Intellectual Property rights
Acumen International is here to help, from payroll and tax management to social security disbursements and immigration services. We’ll give you the peace of mind you need and reduce your company’s legal costs by 50% or more.
| Our Global PEO&Payroll | Client | |
|---|---|---|
| Employment risks mitigation |  |
 |
| Tax compliance & payroll processing | |
|
| Incorporation costs | |
no need for own entities |
| Effort | 90% | 10% |
| Coverage | 190 countries | 190 countries |
Global Payroll Calculator: Accurate Global Employment Cost Estimation
When hiring employees and contractors across the globe, you may not be choosing the most cost-effective and business-friendly country.
- Do you know which country is the most cost-effective place to hire employees?
- What are the costs of entity establishment and legal representation?
- What are the payroll costs and management fees?
- What are your ongoing annual tax compliance costs?
- Are you fully aware of banking implications?
- Did you know that labour laws and hidden costs could make your company less efficient when choosing a country to run your business?
- Did you know that there could be a more cost-effective country to hire employees in and save up to 50%?
- How to hire international teams without setting up a local entity?
This is because countries have different labor laws, compliance, and tax regulations. What if, instead of limiting your company’s international expansion by cutting through the jungle of local regulatory compliance, tax, labor, and immigration requirements, you could have all the information of 190 countries at your fingertips?
The Global Payroll Calculator is built by Acumen International to help businesses understand the compliance requirements for conducting business in a new country. Acumen’s research team tracks developments in 190 countries around the globe. It provides up-to-date data on local regulations related to tax, payroll regulations, benefits, hiring practices, compliance requirements, and other labor-related factors that impact an employer’s bottom line. This valuable information makes the Global Payroll Calculator an invaluable tool for businesses looking to expand internationally.
Global Payroll Calculator helps companies reduce labor costs by providing up-to-date information on hiring, compensation, and tax requirements. It is also an ideal tool for quickly locating employees in any country.
The Remote Work Revolution & How PEOs Can Help You Adapt
As workforces continue to evolve, they demand that leaders like you shed the old work models of yesteryear and adapt to the new ones built in front of your eyes. Global PEO and payroll solution are here to help you navigate this changing employment paradigm, but only if you are willing to have an open mind about where your business is going.
Leadership teams across the globe are still struggling to figure out the best way to manage their internationally distributed workforce. Global PEOs are uniquely positioned to help companies like yours deal with these big changes, including the shift to remote work. Just a few years ago, the idea of a completely remote workforce was unheard of, but today it seems like a permanent reality for many.
Advantages of a Global PEO
1. Reduced time spent on HR procedures, paperwork, and compliance
Outsourcing these operations to a PEO allows more time for strategic decision-making and business growth. Global PEO and payroll solution are responsible for payroll, withholding and paying payroll taxes, managing compensation and benefits coverage, and providing HR compliance guidance.
2. Employment management cost control in Panama
Payroll, benefits, taxes, employee leaves, holidays, and social contributions are centrally managed by one trusted global PEO partner at competitive rates. By working with a PEO, businesses can take advantage of a co-employment relationship which can free up time and resources that can be better spent on strategic decision-making and business growth.
3. Expert advice on employment and tax legislation in Panama
The professionals at your Global PEO can provide expert advice on employment law and dispute resolution. Case studies show that a professional PEO partner can deliver the value of more than $2 million per year per client through efficiency gains and reduced non-compliance risk.
The global PEO becomes a co-employer of the organization’s employees, and PEO shares the employment responsibilities of the client organization. PEOs assume many administrative and HR compliance tasks that businesses would otherwise have to handle, giving business owners and management teams more time to focus on running their companies.
4. A Comprehensive Global Employment Service Portfolio
Global Professional Employment Organisations can provide valuable services, such as immigration support and expertise that businesses might not be able to access independently. Using a Global PEO and payroll solution can be a great way for businesses to improve efficiency, save time and money, and gain access to valuable resources and expertise.
Our experienced HR professionals are here to help with the many challenges of international expansion. From creating a successful employment strategy to providing guidance on proposed countries’ modes of entry, we can help you get started in your new venture. With our expert advice, you’ll be able to create compliant agreements and policies and ensure a smooth transition for your employees.
Disclaimer: Any above information is subject to changes imposed by Panama’s laws. To get the latest updates on taxation in Panama and 190 countries worldwide, contact Acumen’s team of global employment experts.
