Employer of Record (EOR) services: Hiring employees in Panama

Hiring employees in Panama? Let an EOR assist you.

Known for its strategic geographic location bridging the two Americas, economic growth, and stable political environment, Panama offers numerous advantages for businesses aiming to expand their global operations.

With a growing economy, modern infrastructure, and a skilled workforce, Panama is an appealing destination for employers rapidly growing globally.

If you’re looking to extend your business’s reach into Panama, an Employer of Record or EOR can assist in navigating the country’s regulatory framework and simplify your hiring process. By collaborating with an EOR, you can efficiently and swiftly onboard talent in Panama without needing to set up a legal entity all by yourself — a lengthy, resource-sapping process.

An EOR serves as the legal employer for your Panamanian workforce, managing HR, payroll, and compliance obligations while you maintain control over daily operations and strategic decisions.

Why choose an EOR for hiring in Panama?

The task may be overwhelming for small businesses and medium-sized enterprises trying to figure out a global expansion into Panama. Absent the in-house expertise and resources to handle local regulations, they need to consider working with an Employer of Record or EOR to streamline their operations in these regards and focus on core competencies. By partnering with an EOR to make new hires in Panama, businesses can:

• Accelerate hiring and onboarding of top talent in Panama without the need to establish a local entity yourself.
• Streamline HR by offloading payroll, benefits, and compliance tasks to the EOR.
• Support compliance and mitigate legal risk by ensuring full compliance with Panamanian labor laws and tax regulations.
• Introduce efficiency to resource allocation by delegating HR and compliance responsibilities to the EOR, empowering yourself to focus on strategic initiatives.

An EOR is the legal employer for your Panamanian workforce, taking on HR and compliance responsibilities. This gives you the space to concentrate on your core business while maintaining regulatory compliance.

Choosing between an EOR and PEO in Panama

There are two main options for an organization expanding quickly into a new market such as Panama: an EOR or a PEO. The answer to which approach is best depends on the fundamental difference between an Employer of Record and a Professional Employer Organization.

An employer that wants to offload all risk for compliance with employment law in Panama has only one choice, really — an EOR.

How to select the right EOR provider in Panama

When deciding which EOR is best for your expansion into Panama, several important factors should be considered. Choosing the wrong EOR can result in compliance problems, escalating costs, and a negative impact on employee experience. It’s essential to evaluate the EOR’s expertise in Panamanian labor laws, regulations, and cultural aspects. Not every EOR has the capability to operate effectively in Panama. You should also assess the EOR’s ability to deliver dependable customer service and provide dedicated account management. Transparent pricing and understanding the complete cost of ownership are equally crucial aspects to consider. Here’s what to look for:

• Legal compliance: The best EOR for your needs will have an in-depth knowledge of labor law in Panama, relevant regulations, and the workplace culture there. Additionally, a good EOR for you will understand the unique challenges of your industry when in Panama.
• Customer service: A dependable EOR should offer excellent 24-7 support, free from bots and with real, human-first interaction plus dedicated account managers. Multiplier ensures this, providing human support and an assigned manager available to address your account any time, every day of the week.
• Transparent pricing: Many EORs come with fees and charges that might be unexpected or hidden. These EORs may seem cost-effective at first glance. Choose an EOR, however, whose pricing structures is straightforward and transparent. Be sure to understand the actual cost of starting with an EOR.
• Total cost of ownership: While initial expenses matter, so do the long-term hidden costs and overall value an EOR can provide. A budget provider might cut corners on service quality or compliance, which you should avoid. It is crucial to choose a trustworthy EOR that can deliver high value and effectively minimize risks.

How EOR services work in Panama

Step 1: Send that contract over

After partnering with the EOR, generate a locally compliant employment contract. Multiplier’s automated HR features generate contracts that fully comply with Panamanian labor law in under five minutes. You can then personalize terms such as job duties, work hours, compensation, and termination clauses. Multiplier will securely send the contract for signatures, making the onboarding process seamless.

Step 2: Enhance compensation with competitive benefits

Looking to offer a competitive benefits package? To attract and retain top talent, it’s a smart move. Rather than taking on the extensive task of evaluating numerous local providers, your EOR can assist in selecting appropriate benefits that comply with local regulations and align with employee expectations.

Step 3: Get all your documentation in order

To make onboarding easier and set up payroll, your EOR will collect all necessary documents, including tax details and banking information. This ensures your new hires can start smoothly. While Onboarding employees in Panama may be complex for you to go it alone, an EOR like Multiplier can simplify and streamline the entire process for you.

Step 4: Run payroll for employees based in Panama

Processing payroll for employees in Panama can be complex due to specific tax rates and required contributions. By employing through an EOR like Multiplier, you can ensure salaries are paid accurately and on time while all local taxes, contributions, and withholdings are managed. With Multiplier’s global payroll solution, you can oversee payroll for all your international employees in one centralized platform — eliminating the need to coordinate with multiple local vendors.

Step 5: Manage your employees and leave HR compliance to the EOR

Multiplier takes care of everything post-hire related to onboarding. Your Panamanian employees will receive their pay accurately and on time from the first paycheck to the last. Additionally, Multiplier will manage voluntary leaves and involuntary terminations to ensure full compliance with local labor laws.

Moving forward with Multiplier EOR in Panama

An EOR is an excellent solution for any business looking to expand quickly into Panama. The benefits of enhanced agility, operational efficiency, and reduced risk make partnering with an EOR a smart choice.

Multiplier’s Employer of Record (EOR) services offer an all-in-one solution for growing your team in Panama. This allows you to hire without the need for establishing a local entity, while outsourcing essential HR tasks.

Multiplier facilitates smooth processes for hiring, onboarding, and employee management, while also ensuring contracts comply with local laws, managing payroll and taxes, and offering flexible benefits tailored to local requirements.

In short, you avoid compliance challenges and provide an excellent employee experience.

Book a demo to see how Multiplier can simplify HR and compliance in Panama.