Virtual office in Panama for companies with administrative
support and correspondence address
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What is an operating company with a Virtual Office and what is it for?
An operating company in Panama with a virtual office may be a company that requires administrative support, a correspondence address or reception of communications in Panama, without initially needing its own physical headquarters.
Its suitability must be analyzed according to the real activity of the company, the need for an address, tax, banking, municipal, documentary and compliance obligations.
FAQs Operating Company with Virtual Office
What may be necessary to create an operating company with a virtual office in Panama?
The requirements for incorporating an operating company with a virtual office in Panama will depend on the structure chosen, the real activity, source of income, type of company, beneficial owners and applicable obligations.
In general terms, the following may be required:
A copy of the valid passports of the company directors. In general terms, directors must be individuals of legal age, Panamanian or foreign, and they do not necessarily need to reside in Panama, without prejudice to the applicable due diligence, documentation and compliance requirements.
General information about the directors, shareholders and beneficial owners of the company.
Information about the person or entity responsible for keeping the accounting records and supporting documentation, in accordance with the applicable regulations.
If the shareholder or ultimate beneficiary is a legal entity (i.e., a Panamanian or foreign company), a certificate of commercial registration stating the validity of said company would be required. If the company is foreign, said certificate must be sent with an apostille.
How much does it cost to set up an operating company with a virtual office in Panama?
The cost of setting up an operating company in Panama (a company that will conduct business in Panama) can be broken down as follows:
EXPENSES TO BE PAID TO ENTITIES Cost Units Total
Public Registry Registration Fee B/.60,00 1 B/.60,00
Registration Fees B/.115,00 1 B/.115,00
First Single Fee B/.300,00 1 B/.300,00
Notice of Operations B/.55,00 1 B/.55,00
Certification of Public Registry B/.35,00 1 B/.35,00
Registration in the Municipality of
Panama or Municipality B/.60,00 1 B/.60,00
Transaction expenses B/.90,00 1 B/.90,00
Total Expenses B/.715,00
ATTORNEY FEES: $1,265.00 USD + ITBMS (7%)
Total fixed price: $2,068.55 USD.
The cost of the virtual office will depend on each client's needs, starting at $150 USD, including setup and the first month.
Can an operating company with a virtual office operate or function abroad?
A Panamanian company with a virtual office may have commercial relationships or activity linked to foreign markets, but its tax, accounting, banking and documentary treatment must be analyzed on a case-by-case basis according to the real activity, source of income, tax residence of the beneficial owners and the regulations applicable in Panama and in the other countries involved.
Who can set up a company with a virtual office in Panama?
In general terms, an operating company with a virtual office in Panama may be incorporated by individuals or legal entities, Panamanian or foreign, provided that the required documentation is submitted and the applicable legal, corporate and compliance obligations are met.
In the case of legal entities, current registry documentation, corporate certificates and, where applicable, apostilled or legalized documentation may be required, depending on the jurisdiction of origin and the applicable requirements.
What is the main objective of an operating company with a virtual office in Panama?
An operating company with a virtual office in Panama may be used when the company needs administrative support, a correspondence address or reception of communications in Panama, especially in initial stages or in projects that do not require their own physical headquarters from the beginning.
The virtual office service may help reduce initial infrastructure costs, provided that it is compatible with the real activity of the company and the applicable banking, tax, municipal and compliance requirements.
Can operating companies with a virtual office own trademarks, patents or other intangible assets?
An operating company with a virtual office in Panama may own certain assets, trademarks, patents or other intangible assets, provided that the applicable legal, registry, contractual and documentary requirments are met.
What taxes do I have to pay annually for having an operating company with an active virtual office in Panama?
The difference between a company operating in Panama and an offshore company lies mainly in taxation. A company operating in Panama with a virtual or physical office must pay the following taxes:
Income tax (ISR). This tax is paid annually and is filed through an ISR return with the General Revenue Directorate (DGI) by a Panamanian certified public accountant. The company must pay 25% for this tax.
Single Tax Payment to the General Revenue Directorate. The company must pay a single tax annually, which is a type of tax to maintain the company's validity. The total amount to be paid is 300 US dollars (USD). Please note that if payment is delayed, an additional US$50 will be charged as a surcharge.
Payment of Commercial License (Notice of Operations). A fee must also be paid annually to the Ministry of Commerce (MICI) of Panama, which corresponds to 2% of the company's share capital.
ITBMS declarations. Every month, provided that the company issues invoices for its commercial activity, it must make the corresponding ITBMS declarations. This is a tax that in other countries is known as VAT (Value Added Tax).
Municipal Taxes. If a company has a commercial license or notice of operations, it is required to register with the municipality corresponding to its headquarters, in which case it must pay the municipal taxes corresponding to that municipality.
It is important to mention that all companies incorporated in Panama, whether operational or offshore, must pay the annual Resident Agent fee to the law firm or lawyers who registered the articles of incorporation in the Registry. This annual fee is US$300.00 + ITMBS.
Starting in January 2022, and in order to comply with the compliance measures required of resident agents by the Panamanian government, our company and collaborators have established an annual due diligence fee of US$75.00 + ITBMS.
What would be the annual payments my company would have to make to operate in Panama?
The annual payments for companies operating in Panama (i.e., those whose economic activity generates income within the Republic of Panama) are as follows:
Single tax payment to the General Revenue Directorate. The company must pay a single annual tax, which is a kind of tax to maintain the company's validity. The total amount payable is US$300. Please note that if payment is delayed, an additional US$50 will be charged as a surcharge.
Payment of Resident Agent fee. All companies incorporated in Panama, whether operational or offshore, must pay the annual Resident Agent fee to the law firm or lawyers who registered the articles of association in the Public Registry of Panama. This annual fee is US$300.00 + ITMBS. Starting in January 2022, and in order to comply with the compliance measures required of Resident Agents, the Panamanian government, our company, and our collaborators have established an annual due diligence fee of US$75.00 + ITBMS.
In the case of companies operating in Panama, there are taxes that the company must pay annually, such as: municipal taxes, the tax related to the possession of the notice of operations or commercial license, and the payment of income tax, which is calculated for legal entities at a rate of 25%.