Deciding to start your business in Panama? There are fundamental requirements to set up a business according to local legislation. These steps ensure optimal protection of your investment and minimize potential risks. Since 2005, Panama has streamlined business setup procedures through various fiscal and commercial reforms.
Setting Up a Corporation (S.A.)
About 90% of businesses in Panama operate as corporations. These structures protect the identity of shareholders and limit risks to capital and assets. Setting up takes between 5 and 7 working days in Panama.
Choose a Business Location
The location can be your personal residence or premises specifically acquired as the company's headquarters. You can either own or rent this space.
Obtain the "Aviso de Operaciones"
This is the only authorization required by the government to start your activity. Once obtained, you can notify the commercial, fiscal, and municipal authorities of your intention to operate — in one single step, saving you from making separate applications to various entities.
Opening a Bank Account
Although not mandatory, it is highly recommended to open a bank account after setting up the company. This task can be particularly challenging without knowledge and reliable contacts in the country.
Registering Staff
It is imperative to register your staff with the Ministry of Labor and Social Security. Without a written contract, the government will take employees' statements as given. Surround yourself with a reputable accountant who actually carries out these registrations to avoid unpleasant surprises.
Registration with AMPYME
Businesses with an initial investment of less than $150,000 must register with AMPYME (Autoridad de la Micro, Pequeña y Mediana Empresa). This allows for tax benefits, including an exemption on the first two income statements.
