Create your own operating company in Panama

Are you an Entrepreneur who wants to start a company? Your idea is to have employees and have your operational headquarters in the Republic of Panama (regardless of where your clients are). If we start from this premise, then you have not made the wrong choice. You need to create your Corporation, but you also need to put it into operation according to the laws of the Republic of Panama.

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Creation of your Operating Company in Panama

As we mentioned before, the creation of a company is based on the use of certain legal mechanisms, that is to say, independently of your need (which is what will determine how far you go) the main thing is that you have to create a corporation, what you need afterwards will depend on what you need that corporation for.

When we refer to an operating corporation we mean those that at the time of creation seek to have a local business activity in Panama, selling goods in Panama or anywhere. That is to say, it is a company that fits the profile of the Entrepreneur (either national or foreign), that person who has a business idea and wants to develop it. They are also suitable for those who are looking to expand their activities to Panama, that is to say, they want Panama to become their headquarters in Latin America, for example. The important thing in this case is that the commercial activity is carried out in Panama. Therefore, those entrepreneurs, small businesses or traders need much more than an offshore corporation, they need a corporation that is also covered by other necessary aspects, which the Law requires to operate such as: a Notice of Operations that is managed before the Ministry of Commerce and Industries of Panama (whose management cost is included in the Plan); an inscription in the corresponding Municipality (whose management cost is included in the Plan); payment of taxes, the first “single fee” of the Corporation is also included in the Plan. In addition to the above, we recommend that you have an accounting service in Panama with Certified Public Accountants, this service is not contemplated in the Plan but we suggest that you contract it with Legal Solutions Panama, so we can guarantee that all your management will be in good hands.

In addition to all that we mentioned for the Offshore Company (remember that the base is the same, the company is based on a corporation), with an Operating Company and with the obtaining of the permissions and notices that it entails you will be able to have your commercial premises or office, you will be able to sell your goods and services, in general you will be able to develop all type of legal mercantile activity according to the Panamanian laws.

All the Corporations must pay the tax known as “Tasa Única” at the moment of its inscription, its cost is $ 300.00 (three hundred American dollars), that must be done annually. The first time that it is paid is at the moment of the inscription of the corporation.

In addition to this tax, companies operating in Panama, that is to say, those that generate business from and in the Republic of Panama must pay the corresponding income tax (ISR), since the income is being generated in Panamanian territory. Therefore, it is important to know that every corporation that generates income within the Panamanian territory must pay a 30% tax on the profits obtained.

In summary, the annual payments would be:

  • Corporation tax “Tasa Única” of $300.00 (three hundred American dollars), once a year.
  • Income Tax, for all income generated within the national territory. It would be equivalent to 25% on the profits obtained.
  • Annual payment to the lawyer who is constituted as the Resident Agent of the Company created by you. Take into account that this fee will be automatically deducted from your card, since the procedure will be carried out by the lawyer who created the company, as long as you have not notified the change of Resident Agent during a previous period of 3 months before the payment. The amount to be paid will be as agreed at the time and varies between US$250.00 (two hundred and fifty US dollars, if you have appointed your own directors) or US$450.00 (four hundred and fifty US dollars if there is a nominee directors service contract).

In case you would like to move forward with the formation or creation of your operating company in Panama, you can start by completing the following form (no obligation) and you will be closer to opening your business.