How to start a company in Panama

Opening a company in Panama is easy

The key items you will need to open your Panamanian company are: the name of the company, three board members, three directors and a resident agent. Legal@Work can be your resident agent.

Name of the Company

A legal name search must be conducted as part of the process to incorporate a company in Panama. The founder should have at least 3 possible names in mind if the first one is not eligible.

The company opened in Panama must reserve the chosen name of the at the Public Registry and it must contain one of the following terminations:  

• Corp. (Corporation)
• Inc. (Incorporated) or
• SA (Sociedad Anónima)

Board of Directors

At least three directors must oversee the boards, all of whom can be nationals, foreigners, natural or legal person (entity). The ones with the officer's positions can also be part of the board of directions. General information such as names, address, and passport number of the three directors of the corporation should be collected.

Officers

The Panamanian Law requires at least three directors for the positions of President, Secretary and Treasurer (An individual have the possibility to be in charge of these three positions as well). General information such as names, address and passport numbers must be gathered to open a business in Panama.

In most of the cases, the president is also the legal representative, but this position could be also handled by an external of the board of directors.

Resident Agent

One of the main requirements to open a company in Panama is to have a resident agent, that must be a Panamanian Lawyer living in Panama. Their objective is to serve as the controlling agent of the company’s activities and must be able to do all the legal procedures in the respective authorities.  

Incorporate a Panama Limited Company

The corporation limited by shares companies are usually set-up by Foreigners and is a Panamanian legal entity that allows one or more shareholders (individuals or legal entities) to incorporate a company in Panama. Shareholders are liable according to the amount of capital they invest in the company.

There are several advantages for opening a Sociedad Anonima in Panama, which are the following ones:  

• Earnings from activities carried out outside the territory of the Republic of Panama are exempt from income tax in Panama.
• The capital of a company is not subject to any type of tax or fee.
• The directors, officers or shareholders can be foreigners, and they do not need to be domiciled in the country.
• Panamanian status is only required when the corporation is going to start operating within the Republic of Panama or if the founder wants to create a corporative bank account.
• Foreigners interested in creating a corporation in Panama do not need to be physically in the country to create the company.
• An individual has the possibility to own the whole company, guaranteeing absolute control of the corporation in Panama.

Requisites for Small and Medium-Sized (SMEs)

The corporation limited by shares companies are usually set-up by Foreigners and is a Panamanian legal entity that allows one or more shareholders (individuals or legal entities) to incorporate a company in Panama. Shareholders are liable according to the amount of capital they invest in the company.

Natural Person

• Complete and download the registration application form.
• Personal ID of the Legal Representative of the Company or of the person designated by the board of directors.

Operation License or Registration

• Original certificate or authenticated copy of the Public Registry of the Company (not older than 3 months of issued.
• Copy of the last Income Statement or letter from the accountant that certifies the annual billing, with the exception of newly established companies.
• In the event that the legal representative of the Legal Entity is a foreigner, they may be registered in the Business Registry as long as they document the investment established by the corresponding migration Law.