Panama: Multinational Corporation Headquarters ("SEM")

Last Updated: 10 May 2017
Article by Lourdes Bishop

Regional or Headquarters offices are corporations which from Panama carry out operations or services to their main offices or subsidiaries in other countries. "SEM" corporations may operate as a foreign company registered in Panama or as a Panamanian company wholly owned by the "mother" multinational company.

Act No. 41, a SEM Corporation is defined as: "That multinational company that operates from Panama offering the services described in this Act to its headquarters, subsidiaries, affiliates or associated companies, or set its headquarters in Panama, hereinafter Business Group. The Headquarter will always be part of a multinational company with international, regional or important operations in their origin country".

  1. "SEM" Corporation Benefits

Following are some of the benefits to SEM Corporations

Corporate tax incentives

  • Exemptions of Income Taxes (ISR): There will be no income taxes to those SEM Companies by services performed outside the Panamanian territory to its Business Group. However, whether the SEM provides service to its local affiliate, the SEM will have to retain the local income tax.
  • Exoneration of Sales and Services Taxes (ITBMS): As export services, as long as those services are provided to business group entities abroad.
  • Dividend tax and surtax, and use of Fiscal equipment: The companies holding a SEM license are exempt from dividend taxes and surtaxes. Also these companies are not subject to use fiscal equipment.

Incentives to Executive Employees

  • Exemptions of Income Taxes (ISR): There will be no income taxes when executive employees receive salaries from a foreign source, as long as they are holding a Permanent Personal Visa "SEM".
  • Exemptions of Taxes for import household goods: There will be no payment taxes to those executive employees that want to import their household goods on their first flight to Panama, as long as they are holding a Permanent Personal Visa "SEM".
  • Exemptions to be affiliate to the Panamanian Social Security: Executive employees whom are receiving salaries from a foreign source, as long as they are holding a Permanent or Temporal Personal Visa "SEM", they will not have to be affiliated to the Panamanian Social Security.

Migration Incentives

  • Permanent Personnel Visa: for 5 years renewable for the same time frame. Holders of this type of Visa do not require a Work Permit.
  • Permanent Personnel Visa for dependents: This type of Visa will be granted for the same period of time as the "SEM" personal.
  • Temporal Personnel Visa: for 3 months renewable for the same time frame. To technical or training personnel. Holders of this type of Visa do not require a Work Permit.

Others Benefits

  • The "SEM" Corporation can provide services to companies that are not related to the business group of companies. The Law allows that services such as technical assistance (consulting and/or training) may be provided to clients of the "Group".
  • Creation of a Central office within the Commerce Ministry in order to improve their administrative efficiency and avoid bureaucratization of procedures relating to SEM License acquisition and visas for their foreign personnel and their dependants.
  • The validity period of SEM licenses are indefinite, as long as no infraction is incurred. The Commission could set penalties, even the cancellation of the License.
  1. Activities Permitted to be a candidate for "SEM" Corporation

The following activities are exclusively permitted to be a SEM Corporation:

  • The Government and/or Administration of business operations in a specific or global geographical area of a company of the business group. The following are examples of these services: strategic planning, business development, personnel management or training, operations and/ or logistic planning.
  • Logistics and storage of components or parts, required for the manufacturing or assembly of manufactured products.
  • Technical assistance to companies of the business group or to clients that have acquired any products or services on behalf of other companies of the same economic group.
  • Financial management including treasury or back-office services.
  • Company accounting.
  • Elaboration of designs and/or construction plans that constitute part of the business activities of the economic group.
  • Electronic processing of any activity included in the consolidation of operations of the business group, including network operations.
  • Counseling, coordination and follow-up of marketing and advertising guidelines of goods and services produced by the economic group.
  • Operations and research support and development of products and services for the business group.
  • Any other type of analogous services previously approved by the Cabinet Council through motivated resolution.
  1. About the Assets of the Business Group and the Social Capital to be candidate of a "SEM" Corporation
  • The assets of the Business Group should be equal or greater than TWO HUNDRED MILLION U.S. DOLLARS (US$ 200,000,000.00).
  • When the Headquarter Office will be established in Panama, certification should be presented by the Treasurer or the Secretary of the Corporation, stating that the Social Capital is at least TWO MILLION U.S. DOLLARS (US$ 2,000,000.00).
  1. Requirements to apply for a "SEM" License

The following requirements are necessary in order to be granted a SEM License:

Solicitation FORM (will be provided by our office when the decision of filing for the License is reached) with the following documents attached:

  • Social Pact of the Corporation, must indicate as one of its objectives the interests of establishing as a SEM corporation;
  • Power of Attorney (text will be provided by our office when the decision of filing for the License is reached);
  • A sworn declaration stating the intention of establishing as a SEM in Panama and that the corporation complies with all the requirements to obtain the license. This should be signed by the Legal Representative of the Corporation. (Will be provided by our office when the decision of filing for the License is reached);
  • Consolidated Financial Statements of the Business Group, duly certified by Certified Public Accountants. In case these Statements are written in a foreign language or in a currency different from US$, notes and annexes should be presented duly translated to Spanish and converted to US$;
  • Banking Reference Letter.
  • Certification issued by the Treasurer or the Secretary of the Corporation, indicating shares of the Business Group within the Corporation, in order to proved the ownership of the corporation. This Certification should be duly authenticated by Public Notary.

All Documents coming from abroad should be:

  • Duly legalized or apostilled (in case of public documents)
  • Translated into Spanish (in case of a different language)
  • Converted to US$ (in case of a different currency)
  1. Some Corporations registered as SEM are the following:

Maersk (Denmark)

Procter & Gamble (U.S.A.)

Inelectra (Venezuela)

Sinopec (China)

LG Consulting (South Korea)

Prisa (Switzerland)

Caterpillar (U.S.A.)

Alico Services (U.S.A.)

Hyundai (South Korea)

AES (U.S.A.)

Total (France)

Volconsa (Spain)

Endress+Hauser (Switzerland)

Western Union (U.S.A.)

Thunderbird (U.S.A.)

Peugeot (France)

Halliburton (U.S.A.)

Pan American Life (U.S.A.)

Cemex (Mexico)

Moffatt & Nichol (U.S.A.)

ABB (Switzerland)

J.Safra Asset (U.S.A.)

Heineken (Netherlands)

Phillips (Netherlands)

BMW (Germany)

Genzyme (U.S.A.)

Cargotec (Finland)

Nestlé (Switzerland)

Mars (U.S.A.)

SAB Miller (Africa/U.K.)

Otis (U.S.A.)

Ericsson (Sweden)

Adidas (Germany)

Sanofi Aventis (France)

Alfa Laval (Sweden)

BWSC (Denmark)

ZTE (China)

Puig B&F Group (Spain)

Bosch (Germany)

VF Sourcing (U.S.A.)

SmartMatic (Venezuela)

Kuehne+Nagel (Germany)

Wrigley Latin America (U.S.A.)

Atlas Copco Panama (Sweden)

  1. Duration of the Process to obtain a "SEM" License

Once all information has been completed, the Firm on behalf of the Corporation will submitted all the required documentation before the Commission of Multinational Corporation Headquarters (Sede de Empresa Multinacional – SEM).

Once the Commission receives the documentation they will review it and take approximately within 15 to 30 working days to respond.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions