Panama is becoming a popular destination for commercial activity and is offering increased opportunities for foreign businesses. The country has competitive conditions for company formation and tax compliance, positioning itself as a leader in Central America for investment and economic growth. It is important for businesses to understand and comply with corporate compliance requirements in Panama in order to expand into the country quickly and smoothly. Our Panama legal expert provides guidance on key requirements for corporate compliance in Panama.
Key Requirements for Corporate Compliance in Panama:
– There are different types of legal entities that can be incorporated in Panama. The most convenient options for foreign multinationals are a Corporation (Sociedad Anónima) or Limited Liability Company (Sociedad de responsabilidad limitada). These entities allow 100% foreign ownership and can be incorporated quickly.
– The main difference between a Corporation and a Limited Liability Company is that the shareholder’s information in a Limited Liability Company needs to be registered with the local public registry institution, while in a Corporation, it remains private.
– Every legal entity or company in Panama must have a Legal Representative who acts as the face of the company and represents it in legal matters. The Legal Representative can be a foreigner or a Panamanian national.
– The company must register a fiscal address, which is used to receive correspondence from government authorities and financial institutions.
– Depending on the company’s activities, it may need to make monthly or annual tax declarations to the National Tax Authority. It is important to understand the specific obligations based on the company’s commercial activities.
– Companies operating in Panama have more corporate compliance obligations than those operating outside of the country. They may need to file an annual income tax declaration and fulfill additional requirements imposed by the relevant municipality.
– It is recommended to partner with an experienced local accounting consultant in Panama to ensure compliance with tax declarations and other obligations.
At Biz Latin Hub, our team of local and expatriate professionals can provide guidance and support to ensure corporate compliance in Panama. We offer personalized market entry and back-office services to help businesses meet their obligations. Contact us to learn more about how we can support your business in Panama and Latin America.
