Operating in Panama

The creation of an operating company in Panama begins with its registration in the Public Registry of Panama through a public deed, for which we will need:

• The names, passports, and physical addresses of three individuals (who will be the directors of the company). These individuals must be of legal age and have a valid passport.  

• In addition to the corporate purpose, share capital, and name of the company.  

• Once registered, we must request the notice of operations and registration in the Municipality of Panama, which will establish the economic activities to be carried out in the national territory. 

• The cost of setting up a company that will operate in Panama is divided into expenses and fees. 

• Expenses include notary, registration, and transaction fees, payment of the first single tax, the first year of Resident Agent fees, the Notice of Operations, the Public Registry Certification, and registration with the Municipality of Panama, and amount to B/.715.00.   

• The professional fees for incorporation, notarization, and registration with the Public Registry of Panama of the Articles of Association of a Panamanian corporation, registration with the Single Taxpayer Registry (RUC) with the General Revenue Directorate (DGI) of the Ministry of Economy and Finance of Panama (MEF), issuance of the Notice of Operations, and registration with the Municipality of Panama, are B/. 1,353.55 including ITBMS. The sum of the expenses and fees totals B/. 2,068.55.

Yes, although you will have to meet all tax obligations in Panama, reporting the profits from your operation as foreign-source income. We also recommend that you consult with a lawyer in your country to find out if there are any other requirements under your country's legislation. 

A company operating in Panama may offer any type of services, both outside and within the national territory, provided that the provision of such services does not contravene any legal or constitutional provision that protects the provision of such services by national professionals.

Any person, whether a national or a foreigner, may set up an operating company in Panama, provided they have a valid passport and are of legal age. There is no need to travel to Panama or live in Panama. 

The main objective of an operating company is to carry out its economic activity within the national territory and generate its income in Panama. 

• The tax burden is competitive in many cases and sometimes lower than in other countries in the region and in Europe.

• Panama's dollarized economy and the fact that more than 50% of the Panamanian population lives in Panama City create a market with great potential and opportunities to offer a wide range of services.

• In addition, the fact that it is an operating company allows its owners to apply for a residence permit in Panama, provided that their nationality is among those listed in the category of Friendly Countries.

Yes, a company operating in Panama has the capacity to own trademarks, patents, or any type of physical or intellectual property. 

• Companies established in Panama must pay income tax at a rate of 25% on profits. They must also pay municipal taxes depending on the economic activities they carry out and the categories reported in their Notice of Operations, with a minimum of B/.12.00 per month. 

• They must also pay an annual flat fee of US$300.00, a resident agent fee (US$300.00 plus ITBMS), and a due diligence fee (US$75.00 plus ITMBS).

Companies operating in Panama, as well as non-operating companies, shall pay a single annual fee of three hundred US dollars (US$ 300.00) at the time of registration and in subsequent years to maintain full validity. 

The second and subsequent single annual fees shall be paid as follows:

1. By July 15 of each year, for legal entities whose date of registration of the articles of association or constitutive document in the Public Registry of Panama corresponds to the months from January to June, inclusive.

2. By January 15 of each year, for legal entities whose date of registration of the articles of association or constitutive document in the Public Registry of Panama corresponds to the months from July to December, inclusive.

In addition, they shall make an annual payment of three hundred US dollars (US$300.00) plus ITBMS (7%) to the law firm or attorney that constitutes their company for its services as Resident Agent of their company and for fulfilling its role as the point of contact between the Panamanian State and the company's shareholders. The law defines a resident agent as a lawyer or law firm that provides services as such and must keep the records required by law for legal entities incorporated under the laws of the Republic of Panama. In addition, Panamanian law requires that all companies must maintain a resident agent to ensure their validity.

Finally, with the approval of Law 254 of November 11, 2021, the Resident Agents of the incorporated company must submit, once a year, an Affidavit to the General Revenue Directorate of Panama, providing the company's accounting records and supporting documentation, as well as the general details of the public accountant who keeps them in custody, and complete the annual risk matrix that will guarantee due diligence of the Company. 

For this service, an annual fee of US$75.00 (seventy-five US dollars) plus ITBMS (7%) must be paid.