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Panama

Steps to Set Up a Company:

Panama

Choose a Business Structure

  1. Sole Proprietorship (Empresa Individual de Responsabilidad Limitada - EIRL): Single owner, limited liability.
  2. General Partnership (Sociedad en Nombre Colectivo): Two or more partners, shared liability.
  3. Limited Partnership (Sociedad en Comandita Simple): General and limited partners.
  4. Limited Liability Company (Sociedad de Responsabilidad Limitada - SRL): Separate legal entity, limited liability.
  5. Corporation (Sociedad Anónima - S.A.): Separate legal entity, limited liability, shares can be traded publicly or privately.
  6. Branch (Sucursal): A branch of a foreign company operating in Panama.
  7. Representative Office (Oficina de Representación): Limited to marketing and promotional activities, cannot conduct business transactions.

Register Your Company

  1. Choose a Company Name: Ensure it is unique and follows naming regulations.
  2. Draft the Articles of Association: Outlining the company’s structure and rules.
  3. Notarize the Articles of Association: Required for certain company types.
  4. Open a Bank Account: Deposit the initial capital required for the company type.
  5. Register with the Public Registry of Panama: Submit the incorporation documents and pay the registration fee.
  6. Obtain a Tax Identification Number (Registro Único de Contribuyentes - RUC) from the General Directorate of Revenue (Dirección General de Ingresos - DGI): For tax purposes.
  7. Register for Value Added Tax (VAT) with the General Directorate of Revenue: If applicable.

Open a Panamanian Bank Account

  1. Set Up a Business Bank Account: Necessary for managing business finances.

Obtain Necessary Licenses and Permits

  1. Check Industry-Specific Requirements: Depending on the nature of your business, you may need specific licenses or permits.

Comply with Panamanian Employment Laws

  1. Employment Contracts: Draft contracts that comply with Panamanian labor laws.
  2. Register with the Social Security Fund (Caja de Seguro Social - CSS): For social security purposes.
  3. Health and Safety Regulations: Follow guidelines from the Ministry of Labor and Workforce Development.

Accounting and Reporting

  1. Set Up an Accounting System: Maintain accurate financial records in compliance with Panamanian accounting standards.
  2. Annual Financial Statements: Prepare and file annual financial statements.
  3. File Annual Tax Returns: Submit annual tax returns to the General Directorate of Revenue.

Laws and Regulations to Consider

Corporate Law

  1. Commercial Code (Código de Comercio): Governs the formation and operation of companies.
  2. Civil Code (Código Civil): Governs contracts and obligations.

Tax Law

  1. Tax Code (Código Fiscal): Governs corporate income taxation.
  2. Value Added Tax (VAT) Law (Impuesto a la Transferencia de Bienes Corporales Muebles y la Prestación de Servicios - ITBMS): Governs VAT regulations.

Employment Law

  1. Labor Code (Código de Trabajo): Governs the terms and conditions of employment contracts.
  2. Social Security Law (Ley de Seguro Social): Governs social security contributions.
  3. Occupational Health and Safety Law (Ley de Salud y Seguridad Ocupacional): Sets health and safety standards for workplaces.

Data Protection Law

  1. Personal Data Protection Law (Ley 81 de 2019 sobre Protección de Datos Personales): Governs data protection and privacy.

Environmental Law

  1. General Environmental Law (Ley General del Ambiente - Ley 41 de 1998): Governs environmental protection and sustainability practices.

Intellectual Property Law

  1. Industrial Property Law (Ley de Propiedad Industrial): Governs the protection of patents, trademarks, and industrial designs.
  2. Copyright Law (Ley de Derechos de Autor y Derechos Conexos): Governs the protection of copyrights.

By following these steps and adhering to the relevant laws and regulations, you can successfully establish and operate a company in Panama. It’s advisable to consult with legal and financial experts to ensure full compliance and smooth setup.

 

When to Consider Setting Up a Company in Panama:

  1. Strategic Geographic Location: Panama’s location provides access to markets in North and South America, as well as a key transit route via the Panama Canal.
  2. Stable Political and Economic Environment: Panama offers a stable political and economic environment conducive to business operations.
  3. Favorable Investment Climate: Panama offers various incentives for foreign investment and a supportive regulatory environment.
  4. Skilled Workforce: Access to a highly educated and skilled labor pool, particularly in logistics, finance, and services.
  5. Developed Infrastructure: Panama has a well-developed infrastructure, including transportation, telecommunications, and financial services.
  6. Innovation and Technology: Panama has a growing focus on innovation and technology, with government initiatives supporting tech startups.
  7. Quality of Life: Panama offers a high standard of living, excellent healthcare, and a vibrant cultural scene, making it attractive for expatriates and international employees.
  8. Tax Advantages: Panama has favorable tax policies, including territorial taxation where foreign-earned income is not taxed.
  9. Emerging Economy: Panama is one of the fastest-growing economies in Latin America, offering significant growth opportunities.

By considering these factors and aligning them with your business goals, you can determine if setting up a company in Panama is the right move for your organization.

DALL·E 2024-07-08 12.02.10 - An illustration promoting Grant and Grahams global support for setting up companies. The image features a globe with various business icons around it
How to Set Up a Company

Step-by-Step Guide: How to set up a Company

Setting up a company involves a series of crucial steps that require careful planning and execution. From choosing the right business structure to understanding legal and tax obligations, each stage is vital to the successful launch and operation of your business. This step-by-step guide provides a comprehensive overview of the key processes involved in establishing a company, ensuring you have the knowledge and tools needed to navigate the complexities of business formation.