December 31, 2024
Limitless Team
What information is needed to establish a business in Panama?
The first step to setting up a business in Panama is understanding the essential requirements. Here is the basic information you will need:
- Company Name: A unique name for your business that complies with local regulations.
- Articles of Incorporation: A document outlining your company’s objectives, shareholder structure, and other legal details.
- Identification of Directors and Shareholders: A minimum of three directors and one shareholder (can be individuals or legal entities).
- Local Address: A physical address in Panama to register the business.
- Registered Attorney: Mandatory to ensure compliance with Panamanian law.
Additionally, all company documents must be authorized and certified by a licensed attorney in Panama.
Are companies in Panama confidential?
One of the key benefits of establishing a business in Panama is the confidentiality. Generally, shareholders' identities are not disclosed in public records, ensuring privacy. However, the names of directors are published in Panama’s Public Registry.
It is essential to hire a reliable legal agent to ensure confidentiality and compliance with all legal requirements.
Tax considerations: Is it true there are no taxes in Panama?
Panama’s tax system operates on a territorial basis. This means businesses only pay taxes on income generated within Panama. Income earned outside the country is tax-exempt.
Key taxes to consider include:
- Income Tax: Applicable only to local income.
- VAT (ITBMS): 7% on goods and services.
- Annual Taxes: A fixed fee to renew the company each year.
Limitless Legal will guide you in optimizing your company’s tax planning strategies.
What is the timeline and minimum capital required to start a business in Panama?
The process of creating a business in Panama typically takes 7 to 14 business days, depending on the complexity of the case.
Regarding minimum capital, a recommended share capital of $10,000 is advised. However, it does not need to be fully disbursed at the time of incorporation. It only needs to be declared.
Is accounting mandatory, and what is the renewal deadline?
Desde 2017, todas las sociedades en Panamá están obligadas a llevar registros contables, aunque no operen dentro del territorio panameño. Se deben conservar los documentos financieros por al menos 5 años.
En cuanto a la fecha de renovación, el Estatuto Social de la empresa debe ser renovado anualmente para mantener la legitimidad de la sociedad en el país.
✍🏼 Take note...
Starting a business in Panama is an efficient process filled with opportunities for both local and international entrepreneurs. With a favorable tax structure, flexible legal framework, and the potential for business discretion, it’s no surprise that Panama is one of the preferred destinations for investment. Hiring a specialized legal team like Limitless Legal can make the difference between a complicated process and a smooth, successful one.