Setting-Up a Business

Setting-up a business in Panama

Having expert and timely advice during the start-up stage of your business is essential for its success. This is especially true when the business is to be located in a foreign country where the laws and business practices and customs are different.

Corporations and other Business Entities

Even though our laws provide for the use of other business entities, such as Limited Liability Companies, Limited Partnerships, General Partnership or Civil Law Companies, in Panama most businesses are set-up and carried-out using a Corporation.

A Corporation is the choice of most because of its relative ease of formation and operation, the ample limited liability of its shareholders and the possibility of having a single shareholder, among other aspects.

Registration of Foreign Companies in Panama

A business in Panama can also be pursued by using foreign companies. For this, the foreign entity must first comply with certain additional registration requirements applicable.

For some multinationals companies with corporate or regulatory restrictions as to the Formation of new subsidiaries, this might be their only or best option for conducting business in Panama.

Commercial License

To run a business in Panama you must have at least one commercial license. Other type of licenses may be required for certain regulated businesses such as Banks, Insurance Companies, Brokerage Firms, and others.

Social Security Registration

To hire and employ personnel in Panama you must register the business with the Social Security Office and obtain an Employer Identification Number for identification purposes in monthly payroll payments and reports.

Employment Contracts

It is unwise not to have properly drafted contracts with employees at the start of the business. If an employer does not have written contracts, the “story” the employee tells a court in Panama in case of controversies will be given greater credibility over the employer’s version of events, unless proven otherwise by the employer.

Protection of Intellectual Property

If your Intellectual Property is not protected at start-up you could very well become involved in a litigious situation at start up, distracting you from the core business or even put your business in jeopardy. Proper registration is highly recommended.

Final Comments

Conducting business is Panama is a very straightforward proposition. However, seeking the advice of local professionals during the start-up stage is highly recommend to avoid costly and time-consuming mistakes.


Permanent Resident Visa as a Qualified Investor


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Law 159 of August 31, 2020


Through Law 159 of August 31, 2020, the Special Regime for the Establishment and Operation of Multinational Companies for the Provision of Services Related to Manufacturing (EMMA), was created. Its purpose is to attract and promote investments in production processes and the generation of jobs and technology transfer, as well as to make Panama more […]

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Law 157 of August 3, 2020


Today, August 3, 2020, Law 157 of the same date, establishing temporary employment protection measures for companies affected by COVID-19, was promulgated. The main aspects of this law are the following: This law applies to companies that closed their operations, totally or partially, from the beginning of the state of national emergency due to COVID-19 […]

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COVID-19: Executive Decree 100 of July 1, 2020


On July 2, 2020, Executive Decree No. 100 of July 1, 2020 entered into force in Panama, extending the temporary suspension of the effects of employment contracts and dictating other provisions. Companies whose restart of operations has not been authorized The temporary suspension of the effects of the employment contracts of companies whose restart of […]

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