Restricted Professions for Foreigners in Panama (Updated 2025).

Restricted professions

In Panama there are economic activities (professions or trades) that are limited so that they may only be practiced by Panamanian professionals. This occurs, first, because some of these professions require a specific license or professional certification (idoneidad), and in other cases because they are protected by a Law. In general, to obtain the professional certification for a profession, a foreign national must acquire Permanent Resident status and then apply for naturalization.

In addition, the validation (homologación) of degrees by the Universidad de Panamá (University of Panama) is required in order to process the relevant certifications and licenses, not to mention that many professions require applying to a technical board in charge of granting the certifications.

Restricted professions in Panama

Constitutional restriction on the practice of professions by foreigners in Panama

The Political Constitution of Panama establishes a delicate balance between the principle of equality before the law and the State's power to regulate the professional practice of foreigners. While Article 20 of the Constitution enshrines equality between nationals and foreigners, it also grants the State the authority to establish special conditions or to deny the practice of certain activities to foreigners on fundamental grounds such as labor, public health, morality, public safety, and the national economy. This provision is reinforced by Article 73, which specifically prohibits the hiring of foreigners where this may undermine the working conditions of nationals.

Article 20. Panamanians and foreigners are equal before the Law, but the Law may, for reasons of labor, public health, morality, public safety, and the national economy, subject foreigners in general to special conditions or deny them the practice of certain activities. Likewise, the Law or the authorities may, according to the circumstances, take measures that exclusively affect nationals of certain countries in the event of war or in accordance with what is established in international treaties.

— Political Constitution of the Republic of Panama

On the other hand, the constitution empowers the State to establish legal requirements for acquiring professional certification (idoneidad):

Article 40. Every person is free to practice any profession or trade, subject to the regulations established by Law regarding professional certification (idoneidad), morality, social welfare and social security, professional association, public health, unionization, and mandatory contributions. No tax or contribution shall be established for the practice of the liberal professions and of trades and arts.

— Political Constitution of the Republic of Panama

This Article 40, which establishes freedom to practice a profession subject to regulation, together with the aforementioned Article 20, forms a legal framework that allows the State to protect the national labor market while maintaining the openness necessary for the country's economic development, always under regulated conditions that safeguard the national interest.

Article 73. The hiring of foreign workers who may lower the working conditions or living standards of the national worker is prohibited. The Law shall regulate the hiring of foreign Managers, Administrative Directors and Executives, technicians and professionals for public and private services, always ensuring the rights of Panamanians and in accordance with the national interest.

— Political Constitution of the Republic of Panama

Panamanian case law, through important rulings such as the Judgment of the Full Bench of the Supreme Court of Justice of April 20, 1999, has upheld the constitutionality of these restrictions, deeming them compatible with the principle of equality when they are based on the grounds established in Article 20 of the Constitution.

"That is why, as the Attorney for the Administration (Procuradora de la Administración) has stated, it is constitutionally lawful for a law regulating the practice of professions to restrict, deny, or subject to special conditions such practice by foreigners, which is precisely the situation established for the practice of veterinary medicine — a restriction that is consistent with the principle of equality, on the grounds enumerated in Article 20 of the Constitution itself, which includes, among others, labor, as has already been noted."

— Judgment of the Full Bench of the Supreme Court of Justice of April 20, 1999. Constitutional challenge filed on behalf of Mr. William Darío Ochoa Parea against the phrase "to be a Panamanian citizen", contained in subparagraph a) of Law 31 of January 11, 1983.

Restrictions on retail commerce for foreigners

In addition to the restricted professions and trades, retail commerce — that is, engaging in the sale of products directly to the consumer, or in the representation or agency of manufacturing or commercial enterprises, or any other activity that the Law classifies as belonging to such commerce — is reserved by the Constitution to a closed group of persons, which in practice excludes most foreigners from engaging in it directly.

Article 293. Only the following may engage in retail commerce:

1. Panamanians by birth.
2. Individuals who, upon the entry into force of this Constitution, are naturalized and married to a Panamanian national or have children with a Panamanian national.
3. Panamanians by naturalization not covered by the previous case, three years after the date on which they obtained their final naturalization certificate.
4. National or foreign legal entities and foreign natural persons who, as of the date this Constitution enters into force, were engaged in retail commerce in accordance with the Law.
5. Legal entities formed by Panamanians or by foreigners entitled to engage in it individually in accordance with this article, and also those which, without being incorporated in the manner set forth herein, are engaged in retail commerce at the time this Constitution enters into force. Foreigners not authorized to engage in retail commerce may, however, hold an interest in those companies that sell products manufactured by themselves.

To engage in retail commerce means to devote oneself to sales to the consumer, or to the representation or agency of manufacturing or commercial enterprises, or any other activity that the Law classifies as belonging to such commerce. Excepted from this rule are cases in which the farmer or manufacturer of handmade goods sells their own products. The Law shall establish a system of oversight and penalties to prevent those who, under this article, may not engage in retail commerce from doing so through an intermediary (interpuesta persona) or in any other fraudulent manner.

— Political Constitution of the Republic of Panama

Article 294. Wholesale commerce is understood to be that which is not covered by the preceding provision, and it may be engaged in by any natural or legal person. The Law may, however, when there is a need to protect wholesale commerce carried out by Panamanians, restrict the exercise of such commerce by foreigners. But the restrictions shall in no case harm foreigners who are legally engaged in wholesale commerce at the time the corresponding provisions enter into force.

— Political Constitution of the Republic of Panama

The crime of illegal practice of a profession in Panama

The illegal practice of a profession constitutes a serious crime in the Republic of Panama, specifically defined in Article 381 of the Penal Code. This article clearly establishes that any person who practices a profession requiring professional certification (idoneidad) or special authorization without having legally obtained it will face a criminal penalty of two to five years' imprisonment. This legal provision reflects the importance the Panamanian State places on protecting regulated professions and the safety of its citizens.

Article 381. Anyone who practices a profession for which professional certification (idoneidad) or special authorization is required, without having obtained it, shall be punished with imprisonment of two to five years.

— Penal Code, Title XI (Crimes Against Public Trust), Chapter IV (Illegal Practice of a Profession).

The seriousness of this crime lies in the risk that the unauthorized practice of professions requiring specialized knowledge and official certification poses to society. Consider the consequences of allowing someone to practice medicine, engineering, or law without adequate training; the implications could be devastating for people's lives, safety, and property. For this reason, Panamanian law not only punishes this practice with imprisonment but also protects the legitimate practice of professionals who have invested time, effort, and resources in obtaining their certification.

From the standpoint of the migrant worker, committing this crime by practicing restricted professions in Panama is a delicate matter, since it could not only hinder their immigration process but could even give rise to measures such as loss of legal status, deportation, and detention, in addition to restrictions on re-entering the country for years.

The importance of legislative monitoring in the regulation of new professions

Legislative monitoring of the regulation of restricted professions in Panama is essential given the constant technological and digital evolution that is creating new professional fields. Without proper regulation, these new professions could remain in a legal limbo that would affect both the professionals and the users of their services, especially considering that Panama, as an international business hub, needs to maintain competitive standards while protecting job opportunities for its nationals.

Timely regulation and continuous monitoring make it possible to establish quality standards in professional training, prevent unqualified practice (intrusismo), and guarantee legal certainty for investment in new sectors. This is especially relevant in emerging fields such as data science, cybersecurity, or digital technology management, where the lack of regulation could result in legal gaps that allow unregulated practice or the encroachment on professional fields by unqualified persons, compromising both the quality of service and the protection of the Panamanian labor market. On the other hand, the National Assembly is constantly receiving new bills to regulate professions, so it is important to stay up to date on the latest developments in labor regulation.

What options does a foreigner have to practice their career or profession in Panama?

While the employment landscape is fairly limited by the large number of laws restricting foreigners' access to professional practice, the most advisable course for anyone who wishes to settle and build their life in Panama — or who has children who will study a regulated career — is to begin the naturalization process once the required period of residency is met. Some Latin American nationalities enjoy a certain advantage in this regard.

If you are a company and need to hire foreign personnel for a non-restricted position, also review our guide to work permits with MITRADEL.