# SEM

> The SEM regime (Law 41 of 2007) allows multinationals with assets over USD 200M or services to 7+ subsidiaries to establish regional headquarters in Panama with 5% income tax, dividend exemption, and special visas for expats. 185 active companies as of Dec 2024.

[Canonical page](https://investpanama.biz/en/incentives/sem)

The Multinational Company Headquarters (SEM) regime was created in 2007 to attract multinational business groups to establish their regional or global operations center in Panama. A SEM is an office with management control in the region that provides services to its parent company, subsidiaries, or affiliates in other countries. From Panama, companies can coordinate operations for all of Latin America with unique tax, immigration, and labor benefits.

## Benefits

### Tax Benefits

- **Income Tax** (5%) — Reduced rate on net taxable income from services provided.
  - _Source: Ley 41 de 2007, art. 21 — “Las empresas poseedoras de una Licencia de Sede de Empresa Multinacional estarán exentas del pago de Impuesto sobre la Renta...”_
- **Dividend Exemption** (0%) — Exemption from dividend tax, complementary tax, and branch tax.
  - _Source: Ley 41 de 2007, art. 21_
- **VAT** (0%) — Export services to group entities abroad do not trigger VAT.
  - _Source: Ley 41 de 2007, art. 22 — “Por tratarse de servicios de exportación, los servicios que brinde una empresa con Licencia de Sede de Empresa Multinacional no causarán Impuesto de Transferencia de Bienes Corporales Muebles y la Prestación de Servicios...”_
### Immigration Benefits

- **SEM Visa** — Permanent SEM staff visa for the expatriate and dependents (up to 5 years, renewable).
  - _Source: Ley 41 de 2007, art. 27 — “La Visa de Personal Permanente de Sede de Empresa Multinacional será otorgada por un término no mayor al establecido en el respectivo contrato de trabajo... el cual no podrá ser mayor a cinco años”_
- **Dependents Included** — Spouse, minor children or under 25 if students, and parents of SEM staff.
  - _Source: Ley 41 de 2007, art. 26 — “La referencia a los dependientes de quien ostente una Visa de Personal Permanente de Sede de Empresa Multinacional alude al cónyuge, a los hijos menores de edad o menores de veinticinco años que sean estudiantes y a los padres...”_
- **Social Security Exemption** — Exemption from mandatory Social Security enrollment while not applying for permanent residency.
  - _Source: Ley 41 de 2007, art. 34 — “En virtud de que el poseedor de una Visa de Personal Permanente o Temporal de Sede de Empresa Multinacional estará temporalmente en Panamá, a este no se aplicará lo establecido en el artículo 77 de la Ley 51 de 2005, mientras no solicite su residencia permanente...”_
### Expat Benefits

- **Personal Income Tax Exemption** (0%) — Income tax exemption (applies only to the company, not the employee).
  - _Source: Ley 41 de 2007, art. 21 — “Esta exención solo se aplicará a la empresa y no a sus empleados.”_
- **Household Goods** (0%) — Import duty exemption for household goods when first moving to Panama.
  - _Source: Ley 41 de 2007, art. 33 — “El poseedor de una Visa de Personal Permanente de Sede de Empresa Multinacional estará exento, al momento de trasladarse por primera vez a la República de Panamá, del pago de los impuestos que por motivo de su importación pudieran aplicarse a su menaje de casa.”_
- **Personal Vehicle** (0% / 2 años) — Import tax exemption for one personal vehicle every 2 years.

_The information provided is for guidance only and does not constitute legal or tax advice. Consult with legal and tax advisors for your specific case. Rates and requirements may change._