The term “Digital Nomads” refers to those who can perform their work from anywhere in the world as long as they have a computer and a good internet connection. This new work mode became, in some countries, a way of dealing with the global crisis and the many challenges to mobility brought on by the pandemic.

Remote work is a modality that has existed for a long time and, given its convenience, it has recently become a trend. Yet, many countries have not regulated it through their labor laws, which creates numerous obstacles and limitations for digital nomads, such as being required to demonstrate an employment relationship with an employer in the host country or, else, a contract with a local project. Additionally, since digital nomads do not have a national identification document, they often cannot access certain basic services. 

Many governments are taking advantage of this trend and developing innovative immigration, tax, and technological initiatives to attract these digital nomads as one of the mechanisms to reactivate economic activity in their countries. 

In 2020 alone, 13 countries issued regulations to give targeted benefits to high-profile professionals and salaried employees in order to attract them to their territories and boost the hiring of services that might help improve their economies. 

The following countries have created specific visas for digital nomads: Antigua & Barbuda, Bahamas, Barbados, Bermuda, Colombia, Croatia, Estonia, Georgia, Grand Cayman, Iceland, Mauritius, Montserrat, and United Arab Emirates (Dubai). In February of the current year, the first town specifically designed to attract digital nomads was founded in Portugal, specifically on the island of Madeira. This is a clear sign that there is a growing interest from many nations in positioning themselves as an attractive destination for this type of workforce.

Most of those regulations allow workers to open bank accounts, use their home country’s driver’s license, and offer a guaranteed exemption for income tax. The same benefits are extended to their dependents once proof of solvency has been provided.

Panama is no stranger to this concept, being a leading country in the Latin American economy and one of the most well-connected countries in the world. The country receives a considerable amount of digital nomads each year and the numbers have increased tremendously due to the pandemic. This creates a perfect opportunity to issue regulations regarding this type of immigration trend, especially considering that digital nomads will become even more popular in the upcoming months and years. It is vital to attract them and to strengthen Panama’s position globally as a wonderful place to visit, work and reside.

Congressman Raúl Fernández De Marco presented a draft bill on April 13th that creates a new subcategory within the Immigration Category of Temporary Resident, that of Temporary Resident as a Foreign Teleworker.

For the purposes of this law, a foreign teleworker is understood to be a person who performs work activities for an employer that is not registered in the Republic of Panama, partially or completely, in places other than the employer’s establishment or establishments, carrying out their work through information and communication technologies. 

To apply for the Immigration Permit for Temporary Resident as Foreign Teleworker, the interested party must comply with the requirements established in Article 28 of Decree-Law No. 3 of February 22, 2008, except for what is established in Article 4 thereof, and, in addition, they must provide the following:

1. Certification of their worker status by a foreign government, international organization, or foreign private company, in which it is demonstrated that they receive a salary of no less than three thousand dollars per month or its equivalent in a foreign currency.

If the salary comes from a foreign private company, the worker must also provide: 

1. Certification of existence and validity of the company for which they work abroad.

2. Copy of proof of salary payment, or bank statement, in which it is specified that the company that employs them makes payments regularly.

3. Evidence that they have medical insurance that would cover them in case they require medical assistance in the country.

4. Single payment in the amount of two thousand dollars in favor of the National Treasury to cover the application fee for immigration status and eight hundred dollars in favor of the National Immigration Service as a repatriation deposit.

If the foreign teleworker has dependents who enter the country with them, they must demonstrate that they have sufficient income to guarantee that they have an optimal quality of life during their stay in Panama, for which they must provide the following:

1. Letter of responsibility.

2. Proof of kinship.

3. People over 18 and under 25 must present a single certificate and proof of certified studies.

4. Proof of additional income for a minimum amount of one hundred and fifty dollars for each additional dependent.

5. All additional dependents must be covered by the primary applicant’s health insurance.

Once approved, the immigration permit for Temporary Resident as a Foreign Teleworker will be valid for two years. Once the term of validity of the Immigration Permit for Temporary Resident as Teleworker has expired, the foreigner may request an extension of two years until completing a maximum period of four years of temporary residence.

In order to request that extension, they will have to meet the same requirements established in Article 1 of this law. This immigration residence permit will not grant permanent residence or the right to naturalization.

We believe that this bill will pass, making the country very attractive to those who like to combine work with tourism and giving Panama a great opportunity to be one of the pioneer countries in Latin America when it comes to attracting digital nomads.