How to Start a Business in Panama: Strategic Guide 2025

One of the first key decisions is to determine who will own the business. In Panama, both nationals and foreigners can own individual companies or businesses, but there are important restrictions to consider:

• Nationality Restrictions: There are certain commercial activities, such as retail trade, limited exclusively to Panamanian citizens. This is important if you plan to do activities related to this area.
• Regulated Occupations: Some professions, such as law or medicine, are also reserved for Panamanians.
• Companies: Choosing to establish a company instead of operating as a natural person can offer significant advantages, such as limiting personal liability and creating a more efficient tax structure.

Before making this decision, we recommend carrying out a detailed analysis of your business and legal objectives, ideally with the advice of experts such as Limitless Legal.

The type of activity you want to do will also influence the necessary permissions and registrations. Panama is particularly attractive for the following activities:

• International Operations: Thanks to its Colon Free Zone, many companies choose to use Panama as a hub for logistics and international trade operations.
• Export and Import: Their geographical location makes these activities highly lucrative.
• Tourism and Services: Panama continues to be a point of tourist interest, which creates opportunities in this sector.

Before starting, check if the activity you are planning is regulated by a specific authority, such as the Ministry of Commerce and Industries (MICI), and if it requires additional permissions.

Where you'll operate your business is another crucial factor. In Panama, all businesses require a tax address and, in the case of face-to-face activities, a commercial space. Here are some key considerations:

• Zoning: Verify that the area where you plan to set up your company is suitable for the type of activity you will be carrying out. This is especially relevant in business cases such as restaurants, clinics or factories.
• Lease or Ownership: Decide if you prefer to rent or buy the place. Both options have legal and tax implications that need to be carefully evaluated.
• Legal Compliance: Make sure that the place meets the requirements established by local authorities, such as municipal permits and safety certifications.

A well-selected address is not only key to operational success, but also to issuing electronic invoices and receiving important notifications.

The Notice of Operations is an indispensable requirement for any business in Panama. This document, issued by the Ministry of Commerce and Industries (MICI), certifies that your company is registered and authorized to operate. Here are the main steps:

1. Register on the Panama Enterprise portal and complete the application form.
2. Make sure that your activity is not excluded due to nationality or typology restrictions.
3. It awaits the approval and issuance of the Notice of Operations, which is immediate if it is an activity free of restrictions.

This document is also necessary to process the RUC and NIT, which will allow you to declare your tax obligations.

One of the most important aspects of starting a business in Panama is to comply with the country's tax framework. Here are some of the key obligations:

• Single Taxpayer Registry (RUC): It is the number that identifies your company before the Directorate General of Revenue (DGI).
• Income Tax: Companies must declare and pay this tax annually.
• Movable Property and Services Transfer Tax (ITBMS): Similar to VAT in other countries, companies must collect it from their customers.
• AMPYME: Small and medium-sized businesses can benefit from tax exemptions in the first years of operation if they register with this entity.

Tax planning is essential. A tax law expert from Limitless Legal can help you minimize the tax burden and avoid penalties.