How to Form Your Business in Panama: Step-by-Step Guide

One of the first key decisions is to select the legal entity for your business. This step will determine aspects such as the administration structure, tax responsibility and legal obligations. In Panama, the most common entities include:

• Public Limited Company (S.A.): Ideal for companies that require complex actions and structures. It's one of the most popular options because of its corporate flexibility.
• Limited Liability Company (S.R.L.): A common option among small and medium-sized businesses due to its administrative simplicity and limited partner responsibilities.
• Private Interest Foundation: Mostly used for family or property purposes.

It is important to know the differences between these entities and to choose the one that best suits your objectives. A specialized business lawyer, such as those at Limitless Legal, can guide you through this crucial stage.

The next step is to choose a unique name for your business, since it must be available and not generate conflicts with names that have already been registered. In Panama, the Public Registry is responsible for verifying and approving business names.

Important tips when selecting a name:

• Make sure it reflects your brand identity.
• Check availability using the Public Registry's naming services or with the support of a legal professional.
• Avoid names that are too generic or similar to other existing businesses, to prevent future legal problems.

The proper management of any company begins with the appointment of legal and administrative managers. It is essential to document who will be the people authorized to handle the company's legal, financial and operational matters.

In the case of Public Limited Companies, for example, it is necessary to appoint a board of directors who will be responsible for corporate decisions. For other types of entities, such as an S.R.L., it is required to name the manager (s) who will manage the company.

At this stage, we recommend consulting a specialized lawyer to ensure that the legal documents comply with all the country's regulations.

The Single Taxpayer Registry (RUC) is essential for your company to be formally recognized by Panamanian tax authorities. Without this registration, you will not be able to operate legally or issue invoices in Panama.

Steps to get your RUC:

1. Register your company with the Directorate General for Revenue (DGI).
2. Submit the necessary documents, such as the Deed of Incorporation and proof of address.
3. Receive your tax number and make sure you comply with tax obligations under the applicable regime.

Having a corporate bank account is essential for managing the finances and operations of your business in Panama. Panamanian banks have strict requirements, including:

• Statutes and act of incorporation of the company.
• Copy of the identification of legal representatives and shareholders.
• Bank reference of legal representatives or shareholders.

The process can be difficult if you're not familiar with local banking requirements. At Limitless Legal, we offer assistance to make this process quick and easy.