The Special System of the Multinational Corporation Headquarters (MHQ)
- Income Tax: Reduced rate 5% of income tax for services rendered.
- Dividend Tax, Complementary Tax and tax applicable to branches: Companies that hold a Multinational Company Headquarters License will be exempt from the payment of dividend and complementary taxes and taxes on branches.
- Operation License Tax: The MCQ companies are not subject to the payment of Operation License Tax since they do not have the obligation to have a Notice of Operation.
- Capital Gains Tax: The gain or loss in the transfer of shares issued by the company are subject to the capital gains regime, but at a fixed rate of 2%.
- Transfer Pricing: They will not cause Transfer Tax (ITBMS), provided if they are lent to entities of the business group abroad, that does not generate taxable income within Panama.
- Tax Printers: Companies that hold an MHQ License will not be subject to the use of fiscal equipment.
Exemptions for foreign workers
Income tax exemption if the salary is from a foreign source.
Import tax exemption for household goods and vehicle for personal use of permanent employees. However, they must pay the sales tax.
- Exemption from the payment of tax applicable to household items, at the time of moving to Panama for the first time, for personnel with temporary and permanent visa of a SEM companies
These exemptions do not apply to Panamanian employees or other foreign employees who hold a visa other than the Permanent Employee Visa of an MHQ, who will be subject to the regulations and fiscal dispositions in force in the Republic of Panama.
Companies with a MHQ license can hire foreign executives whom they deem necessary for administrative positions.
There is no limit to the number of foreign executives who can be hired for these positions.
Permanent visa (5 years) for foreign executives in permanent positions in the MHQ Company and their dependents.
Permanent residence for permanent MHQ Company personnel.
Three month visa for foreign technical personnel hired for short periods for MHQ company projects.
Note: The Technical Secretariat of the Ministry of Commerce and Industries will offer the one-stop-shop service to apply for the EMMA license and visas for foreign workers and their dependents.