Panama - Establishing an Office Panama - Establishing an Office
- Two or more persons of any nationality may organize a corporation for any lawful purpose. They do not have to be domiciled in Panama. The articles of incorporation may be executed anywhere, even outside of Panama, and in any language, provided a Spanish translation is submitted for registration.
- There are no requirements regarding the amount paid in capital.
- Ownership of a Panamanian corporation may reside in a single individual or corporation and no part of the capital needs to be held by a Panamanian except if it is to undertake certain operations within Panama.
- There are no nationality or residence requirements for shareholders.
- Neither the directors nor the officers are required to be shareholders.
- The Board of Directors must be composed of at least three directors, but one person may hold more than one position.
- Meetings of shareholders or directors may be held outside of Panama and through electronic means. Proxies may be used by shareholders/directors.
In order to form a corporation in Panama, the client must furnish the following information:
- The name of the corporation. It may be in any language, but it must terminate in a word or abbreviation indicating that it is a corporation.
- The objectives and purposes of the corporation.
- The amount of the authorized capital. Usually the authorized capital will consist of US$10,000 divided into 100 shares of US$100 each.
- Duration of the corporation, usually perpetual.
- The full names and addresses of three or more directors and/or officers.
- The domicile of the corporation.
The time period usually involved in setting up a corporation is from fifteen days to two months. Attorney fees usually range from US$600 to US$1,500 per corporation.
Every corporation organized pursuant to the laws of Panama must have a resident agent within Panama, who must be an attorney. The annual fee for this service is about US$200. Approximately 400,000 corporations are registered in Panama.
In order to engage in commercial or industrial activities, all corporations, partnerships or individuals must obtain proper authorization from the Ministry of Commerce and Industry. There are three basic types of licenses involved:
- Commercial License Class A is required for wholesale operations, commercial and mortgage banks, financial companies, international financial brokers, insurance and reinsurance companies, international transportation companies, mutual funds, public utilities, and high-technology service companies.
- Commercial License Class B is required for retail businesses, including representation agencies, service companies, bars, restaurants, drugstores, real estate agents, fuel stations, local transportation, distributors, and others. This license is only granted to Panamanians or corporations owned solely by Panamanians.
- An Industrial License is required for extractive and manufacturing industries, as well as for construction companies.
Exemptions for business license requirements are granted to persons or legal entities engaged exclusively in agriculture, cattle-, bee-, or poultry-raising, or in the manufacturing and sale of handicrafts, provided that hired workers do not perform the work. Licenses must be kept at all times in a visible and accessible place. The cost for obtaining a license ranges from US$250 to US$750. Also, an annual tax is levied based on the net worth of the company, as stated in income tax filings, plus other income taxes.
Most service providers are required to withhold a seven percent (7%) value-added tax on most services. Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.