Start a business in Panama
Panama is an excellent place for an entrepreneur. Setting up a company is not difficult, the available workforce is suitable to fulfil most of your staffing requirements and it is permissible to bring in specialists from abroad if you can't find the right people locally.
Add to that the excellent transport links, including the world's most famous and successful canal, plus the favourable tax regime, and all you have to supply is the idea and the drive.
Before getting started you will need a visa. See our Visas page for general advice and consult a lawyer. Once that is in place you should talk to your accountant and take steps towards finding one whom you trust in Panama.
Economic advantages
Panama has one of America's most important free trade zones, the Colon Free Trade Zone (CFTZ), which offers many advantages such as total tax exemption. It describes itself thus: 'The 'Zona libre' of Colon is a commercial showcase par excellence for the whole continent. Imports and exports registered in the Colon Free Trade Zone surpass 5 billion dollars annually, directed towards a market of more than 525 million consumers.'
In general, there are only a few capital requirements in Panama. However, investments must be made in US dollars.
Types of businesses
There are different types of companies in Panama: Panama Corporation, Panama Limited Partnership (Limited Liability Company), Individual Limited Proprietorship, Panama Foundation and Panama Trusts. A lawyer can advise on the appropriate one for you.
Panama Corporation
This type of company usually consists of two applicants who will be responsible for notarizing the company's status and register it with the Public Registry Office (Registro Publico). Thereafter, you will have to appoint three directors. A Panama resident must be appointed as the company's agent.
Panama Limited Partnership
You are allowed to create a Panama Limited Partnership in the country without restriction on nationality. However, you will have to provide the names of all the company's shareholders to the Registro Publico. The minimum capital required for the establishment of a Panama Limited Partnership varies between US$ 2,000 and US$ 500,000.
Individual Limited Proprietorship
The Individual Limited Proprietorship's structure is similar to that of the Panama Limited Partnership. However, shareholders' liability is limited to the amount of assets allocated.
Panama Foundation
The creation of a Panama Foundation usually requires a minimum capital of about US$ 10,000. However, you will not be allowed to get involved in commercial activities, even if you own a property in the country. Note that the Panama Foundation's incomes are tax exempted.
Panama Trust
A Panama Trust may be made for an existing or future property. The main responsible party and the beneficiaries cannot be citizens or residents of Panama, although you will have to hire a Panamanian lawyer to act as the trust's agent.
Offshore company
There are no nationality restrictions for the creation of an offshore company in Panama. You do not have to be a resident of Panama. There is no minimum capital requirement and you do not have to hire an accountant. The company will also be tax-exempt.
Registering a business
You are advised to hire a lawyer or an agent to assist you with the procedures related to setting up a business in Panama. The latter will be responsible of handing over related documents to the Registro Publico. Once these procedures have been completed, you must register your company with the tax service and get a Número de Identificación Tributaria (NIT - Tax Identification Number) from the Ministry of Finance of Panama.
You must obtain a permit from Panama Emprende, the entrepreneurs' regulatory body, as well as a business identification number at the nearest municipality to your company's head office. Municipal tax is payable according to your annual income.
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