Our team provides complete Panama incorporation services to investors interested in setting up their business activities in this country.
| Quick Facts | |
|---|---|
| Types of companies | Corporation, limited liability company, International Business Company, branch |
| Minimum share capital for IBC | Not applicable |
| Minimum number of shareholders for IBC | 1 |
| Corporate tax rate | Income generated outside of Panama is not subject to tax. Different rates apply for Panama-sourced income. |
| Dividend tax rate | 0 for IBC |
| VAT Rate | 7%/10%/15%. A reduced rate of 0% also applies. |
| Number of Double Taxation Treaties (approx.) | 18 |
| Local Director Required | No |
| Annual Meeting Required | No |
| Foreign-Ownership Allowed | Yes |
| Documents required for company formation | For individual shareholders/directors/beneficial owners: certified passport copy, proof of address, bank reference, declaration on the source of funds, etc. |
| Bank Account Creation | Available through our service |
| Approximate timeframe for company formation | 2 weeks |
| Government fees for company formation | Mandatory |
| Panama company formation costs (approx.) | Starting from USD 2,500 (not including government fees) |
What types of companies can I open in Panama?
Investors who open a company in Panama can choose between the following principal business forms:
- The corporation (anonymous company, Sociedad Anonima – S.A.);
- The limited liability company (Sociedad de Responsabilidad Limitada – S.R.L.);
- The International Business Company;
- The foreign branch.
Many foreign investors (individuals and corporations) interested in doing business in Panama will choose to incorporate an International Business Company when their primary business activities are international ones. Those who trade within the country will commonly set up an SRL or SA.
Are there any restrictions on foreign investment in Panama?
Foreign investment and company ownership in Panama are generally unrestricted. Sector-specific restrictions and/or regulations apply.
What are the general company formation steps?
Our team lists the main stages related to company incorporation in Panama when working with our specialists:
- Proposal receipt and approval;
- Company name check and reservation (we suggest proposing several suitable names, as some may already be in use);
- Due diligence documentation review (this is part of our “know-your-client” policy and verifications are in place to ensure the source of the funds and the suitability of the proposed investment);
- Company registration form filling in (official document including information on the future business);
- Filing for incorporation (subject to fee payment and performed when all the required documents are gathered and prepared for filing as per the current requirements);
- Awaiting the issuance of the business registration documents;
- Post-incorporation procedures, such as bank account opening.
Are there special requirements for the company incorporation documents?
All documents required for company formation in Panama are submitted as indicated by the authorities. Moreover, these must be certified by an approved lawyer, notary public, chartered accountant, or regulated professional.
How long does company formation take in Panama?
Entrepreneurs are advised to expect a company formation timeframe of approximately 2 weeks if all the provided documents are in order.
How much does it cost to open a company in Panama?
Our team offers company incorporation packages starting from USD 2,500, excluding the applicable and mandatory government fees.
How will my Panamanian company be taxed?
Companies in Panama are subject to a territorial tax system, and the taxable income includes all revenue derived from business activities performed in the country.
Important: There is 0 tax for IBC companies (Revenue obtained from outside the country is not subject to taxation (conditions apply).
However, the following tax rates do apply if the mentioned conditions are not met:
- Progressive rates between 7.5% and 22.5% on the net taxable income in the case of micro, small, and medium businesses;
- Tax assessed at the greater of a 25% rate on net taxable income or a 4.67% rate on gross taxable income, the latter being the minimum tax calculation, also called the CAIR.
We invite you to watch our video about opening a company in Panama:
What are some of the reasons for setting up a company in Panama?
Foreign investors who wish to open a company in Panama enjoy a number of advantages. We list some of these below:
- A stable economy: the country has seen constant economic growth over the last few years, and it is a competitive economy among other jurisdictions in the Caribbean.
- Easy company formation: the Panama company formation process is a simple one that takes a few days and can be assisted by our team of experts.
- Easy company management: local company laws allow for flexible company management as there is no need to hold meetings in Panama or to hold the accounts in this location.
- Favourable taxation policies: Panama offers an attractive taxation regime as there is no tax on business activities or transactions performed abroad.
- Trade benefits: Panama has signed multiple free trade agreements and trade is liberalized; moreover, there is a free trade zone, among other special economic zones.
Investors who want to know more about Panama offshore company formation can contact us for complete details as well as specialized assistance for incorporation. We provide complete company formation packages.