How Panamanian Entrepreneurs Can Get Tax Exemption: A Practical Guide

La Micro, Small and Medium Enterprise Authority (AMPYME) is an institution of the Panamanian government that aims to promote the development of entrepreneurs and entrepreneurs in small and medium-sized enterprises. Among its most notable programs, it offers tax benefits and access to financial and educational resources. One of the most attractive incentives is the exemption from income tax for the first two years of operation.

AMPYME not only promotes emerging businesses, but it also strengthens the local economy by encouraging formalization and business competitiveness.

1. Evaluate the type of company: Before starting the process, you must determine if your venture corresponds to a microenterprise (annual turnover less than USD $150,000) or small business (annual turnover less than USD $1,000,000).
2. Gather the required documents: The basic documents include a certificate of public record (for legal entities), a copy of the ID, a notice of operation, and an affidavit of estimated income.
3. Access the AMPYME online platform: Through their official website, you can register more efficiently and upload the necessary documents.
4. It meets the specific requirements depending on your case: Depending on whether you are a natural or legal person, the procedures may vary slightly. It's crucial to ensure that your documentation is complete to avoid delays.
5. Sign the necessary agreements: Once the registration is approved, you must sign agreements and commitments established by AMPYME.
6. Follow the mandatory trainings: To complete the process, some entrepreneurs must attend business workshops offered free of charge by AMPYME.

• Income Tax Exemption: As a company registered with AMPYME, you will be exempt from this tax for the first two years, allowing you to reinvest in your growth.
• Access to finance: You can apply for preferential credit programs or grants designed to support small businesses.
• Workshops and training: Learn about marketing, accounting, and business strategies in AMPYME's free programs.
• Formalization: Being registered better positions you to obtain contracts and collaborations with large companies or the government.

In addition to the above, being formalized with AMPYME gives your business greater credibility, which can attract more customers and investors.

1. Incomplete documentation: This is the most common mistake. Make sure you meet all the requirements before starting the process.
2. Not meeting micro or small business characteristics: If your income exceeds the established limit, your request will be rejected.
3. Lack of follow-up to the procedure: Some entrepreneurs start the process, but don't complete it because they don't follow up.
4. Not taking advantage of additional benefits: Many entrepreneurs don't sign up for free workshops or apply for funding because they don't know they're eligible.

In addition to registering with AMPYME, there are other important procedures that you must take into account:

• Tax registration: Register your company with the Directorate General for Revenue (DGI).
• Get an operation notice: This is a mandatory requirement to operate legally in the country.
• Municipal registry: Process the necessary permissions for your geographical location.
• Membership in the Social Security Fund: If you're planning to hire employees, it's a must.

Taking these additional steps will ensure the formality of your business and avoid legal problems in the future.