Bill 244.

Summary.

The bill creates an incentive regime for branches of companies headquartered in Panama City that set up operations in the District of La Chorrera or other districts of the Province of Panamá Oeste. Its purpose is to move jobs and services to Panamá Oeste. A company seeking benefits must establish that transferred workers reside in the province, using verification mechanisms available through the General Directorate of Revenue (Dirección General de Ingresos), the Electoral Tribunal (Tribunal Electoral) and the province’s justices of the peace. The regime applies to operations involving investment in infrastructure, the rental or lease of offices or commercial premises, or the purchase of commercial premises in the province.

The bill defines Western Business Branches as offices or premises that manage a company’s internal activities, either directly or through specialized providers. These activities include information technology, communications, human resources, call centers, marketing, accounting, finance and billing. An effective resident is a person who lives in the District of La Chorrera or another district of the province at least from Monday through Friday and establishes that address through a registered home, a lease or a sworn statement certified by a justice of the peace. For registered homes, the bill refers to the etax 2.0 system of the General Directorate of Revenue under the Ministry of Economy and Finance (Ministerio de Economía y Finanzas).

The branches may provide document digitization, commercial promotion through digital or traditional media, payment and collection management, payroll, recruitment, billing and document classification. They must submit an annual report to the General Directorate of Revenue containing statistics on their operations in the covered districts. Their services may be provided only to the corporate group to which they belong.

On taxation, the bill allows income tax deductions for establishment and operating costs and expenses, increased by up to 10% of their actual amount. The salary related deduction requires the transfer of at least ten resident persons and covers the wages of hired employees who reside permanently in the area, together with operating costs increased on the same basis. It also excludes assets acquired to install a branch from the capital used as the tax base for the Business Operation Notice Tax, subject to the worker transfer requirement. It provides an exemption from the Real Estate Transfer Tax established by Law 106 of 1974 for certain first transfers of new commercial premises and transfers of previously owned or repossessed premises, subject to the stated periods and conditions. The bill proposes a 3% rate on multinational digital companies and streaming content platforms as substitute revenue for the incentives.

On employment, transferred staff may retain their wages, rights and benefits. The bill concerns companies with branches, resident workers, property developers and digital companies; it assigns verification or reporting roles to the General Directorate of Revenue, the Electoral Tribunal, justices of the peace and the Ministry of Economy and Finance.