How much does an intern cost a company in Panama? B/.450.00 per month, plus an insurance policy. No social security contributions, no statutory benefits, no payroll deductions, and the amount paid is a deductible expense for the business.
That figure stopped being theoretical on August 31, 2026, when Executive Decree No. 1 completed the regulations for the Programa de Pasantía created by Law 513 of March 20, 2026. The registration platform opened in early September, and the first agreements between companies and young Panamanians have already been signed.
What Is Panama’s New Internship Program?
Law 513 created a voluntary program that lets private companies and nonprofit organizations based in Panama take on young people for structured, paid training periods that do not create an employment relationship. Panama is being described as the first country in Latin America to regulate paid internships in a comprehensive way.
The B/.450.00 monthly payment is legally classified as a subsidy, not a salary. No CSS contributions are owed on it, and the intern is not covered by the CSS occupational risk regime, which is exactly why a private insurance policy is mandatory.
The Program runs until March 2029, and the maximum duration is one year per intern.
Who Qualifies as an Intern?
The Program is aimed at young people between 18 and 25 years of age coming out of secondary, technical, vocational or university education. Minors who have already completed secondary school can also participate with authorization from their legal guardians.
One point that often gets confused: this does not replace anything that already exists. University and school practicums, professional practice requirements and social service programs continue exactly as they were, and the Mi Primer Empleo program under Law 121 of 2019 is unaffected. These are parallel schemes that can coexist.
How Many Interns Can Your Company Take On?
The cap depends on the size of your payroll as registered with the CSS.
| Payroll size | Maximum interns |
|---|---|
| Up to 50 people | 2 |
| 51 to 100 people | 4 |
| 101 to 200 people | 6 |
| More than 200 people | Up to 3% of the workforce |
Companies that want more than their bracket allows can request an exception authorization from MITRADEL. If the ministry does not respond within 30 days, the authorization is deemed granted.
What Does the Company Actually Have to Do?
The obligations are specific, and most of them have to be in place before the intern’s first day.
- Buy an insurance policy. An occupational risk or accident policy with an insurer authorized in Panama, contracted before the internship starts.
- Register online. The company registers on the MITRADEL portal with its notice of operation issued at least one year earlier, tax and social security clearance certificates or a payment arrangement, the current payroll, and a copy of the policy. Each intern is then registered individually, and no internship can begin without the participation agreement on file.
- Designate a tutor. Someone on the team has to guide, supervise and evaluate the intern, and deliver an induction at the start.
- Report quarterly. Data has to be updated on the portal within 15 days of the close of each quarter.
- Certify at the end. The company issues a certificate stating duration, areas, functions and competencies. The law recognizes that document as work experience for all purposes.
- Keep it formative. An intern cannot replace a formal position or cover a permanent operational need.
What Are the Limits on Hours and Duties?
Interns can work a maximum of 40 hours per week, on day or mixed shifts Monday through Friday, and day shifts only on Saturdays. Overtime does not apply, and neither do public holidays or days of national mourning.
The substitution rule is the one with teeth. Using an intern to fill what is really a permanent job carries a fine of B/.250.00 to B/.500.00, and a repeat breach can mean suspension from the Program. Labor inspectors are authorized to visit the internship site to verify compliance.
If the vacancy you have in mind is a permanent position in disguise, this is not the route.
Why Is Panama Doing This Now?
The numbers behind the law are blunt. According to the Instituto Nacional de Estadística y Censo, 113,347 Panamanians between 15 and 29 are out of formal work. Of those, 52,064 are aged 20 to 24 and 40,905 are aged 25 to 29. Youth unemployment sits at 19.9% against a national rate of 10.4%.
The circle the law is trying to break is a familiar one: employers want practical experience, and young candidates cannot get practical experience without an employer willing to give them a first opening.
MITRADEL presented the registration platform at the Cámara de Comercio, Industrias y Agricultura de Panamá in front of representatives of more than 100 companies, some of which registered interns on the spot. Chamber president Aurelio Barría Pino has called on the private sector to widen participation, while noting the Program addresses one specific barrier rather than youth unemployment as a whole. President José Raúl Mulino framed it more simply at the launch: “Every door we open to opportunity is a door we close on inequality.”
One Open Question Before You Commit
Law 513 is currently the subject of a constitutional challenge before the Supreme Court of Justice. The core argument raised by petitioners is that a scheme with several features of an employment relationship should not sit outside labor and social security obligations.
The Court’s eventual decision will shape the scope and practical application of the Program. Companies that register now are operating under a law that is in force, but this is worth tracking rather than assuming it is settled.
What This Means If You Own a Business in Panama
For expats running small operations here, and there are plenty – property management outfits, short-term rental businesses, boutique hotels, restaurants, small professional offices – the practical appeal is a low-cost, legally defined way to test junior talent before committing to a payroll hire.
The fixed cost is predictable. The paperwork is real but manageable. The constraint worth taking seriously is the tutor requirement, because a company without someone able to genuinely supervise and teach will not get value out of it, and may find itself on the wrong side of the substitution rule.
It also says something about where Panama is heading. A country that is actively building pathways into formal employment for its own young people is a country investing in the workforce that expat-owned businesses in Panama City and along the Pacific beaches depend on every day.
If you are weighing a move to Panama that involves setting up or buying a business, or you are already here and thinking about the staffing side of a property investment, Casa Solution can help you understand the local picture and connect you with the right professionals. Get in touch with our team.
Article written: September 16, 2026
Employment and tax regulations, and individual company circumstances, vary. This article is intended as general information and should not replace advice from a qualified Panamanian attorney or labor law professional.
