The requirements for establishing or creating an operating company with a virtual office are exactly the same as those required of a client who wishes to establish an operating company in Panama (i.e., one that generates its income within the Panamanian jurisdiction) or an offshore company (income outside Panama).

To do so, we need:

• A copy of the valid passports of the company directors (only the general information page of the passport). The directors must be three Panamanian or foreign nationals of legal age. They do not need to reside or live in Panama, nor do they need to have a residence permit if they are foreign nationals.

• General information about the company directors and its ultimate beneficiaries or shareholders.

• Information about the person or entity that will be responsible for keeping the accounting records and supporting documents for the transactions of the company or corporation to be incorporated.

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.

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.

A Panamanian company can operate anywhere in the world. In other words, you can have an operating company in Panama that conducts business activities in your country. However, we recommend that you consult your country's regulations if you wish to open a branch of that company in your country, as you will likely be required to meet a series of requirements in order to have your headquarters and conduct business from your country.  

Any natural or legal person, Panamanian or foreign, may establish a business or operating company in Panama, provided that they are of legal age and have a valid passport. 

In the case of Panamanian or foreign legal entities, they must present a valid Public Registry certificate issued within the last three months. In the case of foreign legal entities, companies, or businesses, said Public or Commercial Registry certificate from the country of incorporation must be sent to Panama with an apostille.

Operating companies with virtual offices are established with the primary objective of doing business in Panama while saving on set-up costs. These companies or businesses mainly have commercial activities that will be carried out in Panama and need to maintain a commercial or correspondence address in Panama in some form. Therefore, contracting virtual office services for their company benefits them by saving on rental, personnel, and maintenance costs. 

That's right, operating companies with virtual offices can own trademarks, patents, or any intangible assets located anywhere in the world. 

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.

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%.