How to Create a Company in Panama: A Guide for Foreigners

Panama is much more than a bridge between North and South America: it is a true economic hub. Here are some reasons why foreign entrepreneurs choose Panama:

• Tax advantages: Panama does not tax revenues generated outside its territory (territorial system).
• Incentives for investors: There are programs that facilitate foreign investment, such as the special Free Trade Zone regime.
• Political and Economic Stability: As one of the most stable countries in the region, it offers a favorable environment for business.
• Access to global markets: Its interoceanic channel and air connectivity make it a strategic location for international trade.

1. Choosing the Right Legal Structure

Depending on your business objectives, you can choose between several legal structures in Panama:

• Public Limited Company (S.A.): Ideal for large businesses or international projects.
• Limited Liability Company (S.R.L.): More suitable for small and medium-sized businesses.
• Branches of foreign companies: Perfect if you want to operate under an existing parent company.

2. Required documents

For the incorporation of a company in Panama, it is important to gather the following:

• Social Pact: A document that details key information about the company, such as its name, purpose and share capital.
• Apostilled documents: Your identity certificate and criminal record must be duly apostilled in your country of origin.
• Economic capacity: Demonstrate solvency to operate the business, especially if it requires minimum capital to operate.

El Social Pact It is a fundamental document in the creation of a company in Panama and establishes all the legal aspects necessary for its operation. Here's what you should include:

1. Company name: It must be unique and meet the requirements of the Public Registry of Panama.
2. Company headquarters: Physical address in Panama.
3. Objectives: Description of the business activities you will carry out.
4. Share capital: Amount of capital that is established for the company and its distribution.
5. Shareholders and dignitaries: Name, nationality and roles.
6. Duration of the company: It can be indefinite or time-limited.

If you are a foreigner, you can also be a shareholder or director of the company, which makes the Panamanian market highly accessible to international investors.

Here are the essential steps to formalize your company in Panama:

1. Consult with a local lawyer: Receiving legal assistance is paramount to ensuring compliance with local laws.
2. Document preparation: Draft the Social Pact and submit the required documents.
3. Registration in the Public Registry: The Social Pact must be registered in the Public Registry of Panama.
4. Get the Notice of Operations: Required for all companies planning to sell goods or services in Panama.
5. Registration with the Directorate General of Revenue (DGI): Get the Tax Identification Number (NIT).
6. Open a business bank account: It is important to manage the company's finances in a professional manner.

Aside from the legal steps and requirements, it's important to consider other aspects for the success of your business project:

• Hiring local talent: If your company requires employees, you must comply with local labor laws, including work permits for foreigners.
• Understand the restrictions: For example, the Panamanian Constitution limits retail trade to nationals and corporations composed of Panamanians.
• Free Trade Zone Benefits: If your business is linked to international trade, taking advantage of these spaces can reduce operating costs.
• Technological Capabilities: Panama offers an advanced technological infrastructure for digital operations.