Navigating the Legal Landscape for Short-Term Rentals in Panama As short-term rentals in Panama continue to rise in popularity in Panama City and beyond, property owners and operators need to be aware of the legal considerations involved. Panama’s regulatory framework may not explicitly address platforms like Airbnb or Booking.com, but it offers guidelines that fall under broader tourism-related laws. If you’re considering renting out your property for short-term stays, here’s a breakdown of the most important legal requirements to consider. Zoning and Permit Requirements For Short Term Rentals Before diving into the short-term rental market, understanding zoning laws is critical. The Ministry of Housing and Land Management (MIVIOT) pre-approves zoning in Panama City, but not all zones allow for short-term rentals. If your property’s zoning doesn’t currently allow for such use, it may be possible to request a zoning change, though this can involve a lengthy process requiring neighborhood approval. For Airbnb-type setups, registering your building as an Apart-Hotel could be an easier path. Operators like ACOMODO Rentals and Wynwood House, managing properties in Casco Viejo and Panama City, have taken this route to legally offer short-term rentals. Buildings such as The Sands and The Grey have already registered as Apart-Hotels, allowing a combination of short- and long-term leases. Tourism Permit Applications For Short Term Rentals in Panama If you’re planning to operate a property for tourist accommodations, you’ll need to comply with the Public Accommodation Registry requirements, governed by Executive Decree No. 82. This includes obtaining a Tourism Permit, which is a must for any building registered for tourism purposes. Importantly, individual residential apartments cannot apply for this permit. Only buildings registered as Apart-Hotels or those under the Horizontal Property Tourism Regime can legally operate short-term rentals. Under this regime, each unit in the building must serve as a tourist accommodation—making it a less flexible option than an Apart-Hotel registration. Short Term Rentals In Panama: Fire Safety and Occupancy Regulations All properties offering short-term stays need to comply with fire safety regulations. This means requesting an inspection from the local fire department, which includes providing details like the owner’s identification and the reasons for the inspection. Although time-consuming, this step is crucial for ensuring your property meets safety standards and minimizing fire risks. Insurance Coverage A regular home insurance policy won’t suffice for short-term rental operations. It’s recommended to opt for business and liability insurance, which covers potential damage or personal injury claims. Make sure your insurance provider is aware that your property will host paying guests, as failure to disclose this may void your coverage. Food Safety Permits If your short-term rental offers breakfast or other meals, you must obtain a Sanitary Operating Permit for food establishments. This involves submitting documentation such as the list of food handlers and their health cards. Construction and Renovation Permits Any significant renovations or new construction aimed at setting up a short-term rental must comply with local building regulations. This includes securing construction and occupation permits from the relevant authorities, ensuring that your property is in line with municipal standards. Final Thoughts On Short Term Rentals While Panama’s legal framework doesn’t directly govern short-term rentals via platforms like Airbnb, there are ways to navigate the system. By registering your property as an Apart-Hotel, securing the necessary permits, and ensuring you comply with safety and insurance requirements, you can operate legally and avoid potential fines. For property investors and operators in Panama’s short-term rental market, understanding these legal considerations is the key to a successful and compliant business.
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