Panama

FITA helps you find
service providers for:

Operating a Business in Panama

Types of companies and capital (max/min)	Number of partners/shareholders and liability	Registration fees
Share company is a stock company No minimum capital.	2 minimum. There is no requirement regarding the place of residence and nationality of the directors. Liability is limited to the amount capital.	Hire a registered agent: USD 150. Notarize articles of incorporation: USD 75. Registration fee schedule: First USD 10,000: fee is USD 60; Each USD 1,000 up to USD 100,000: USD 0.90; Each USD 1,000 from USD 100,000 to USD 1,000,000: USD 0.60. Obtain a notice of operation (“aviso de operación”): USD 250-750. Register for taxes: USD 250. Register with municipality; get a “paz y salvo municipal”: USD 5.

Business setup procedures: According to the Panamanian Constitution, foreigners have the same rights as Panamanians with regard to the formation and the management of companies. There are some activities that only Panamanians can do: retail business, medicine, law, accounting...
To register their companies, the investors have to go to the Panama Bureau of Public Registers, see this link (Spanish only). The procedures generally take from 15 days to two months (fastest in Latin America, 12th worldwide; the cost is approximately US $ 1,200).
Panama has some of the most modern and flexible corporate laws in Latin America. These are some the advantages of Panamanian corporate laws:
- Two people or more, of any nationality, whether resident or not in Panama can form all types of legal corporations. The formalities can be carried out from anywhere even outside Panama without the necessity of language.
- There are no specific requirements with regard to capital contribution.
- Ownership of a company in Panama can be individual and Panamanian nationality is not compulsory.
- There are no obligations regarding the nationality or the residency of the shareholders.
- The corporate managers have to be shareholders.
- Management has to be made up of at least 3 people and one person can hold several positions.
- Shareholders' meetings can take place outside Panama.
The competent organization: Panama Chamber of Commerce, Industry and Agriculutre, see this link (Spanish only).

Legal weekly duration: Panamanian labor law allows 4 work shifts per day.

1) Day work of 8 hours maximum per day and 48 hours per week which should take place between 6 AM and 6 PM. 2) Night work of 7 hours maximum per day and 42 hours per week which should take place between 6 PM and 6 AM. 3) Mixed work (night and day) of 7.30 hours maximum per day and 45 hours per week which should take place during the two cycles of work. More than 3 nights per week the other periods are automatically considered as night. 4) Rotating cycle when the company needs staff during the different shifts.
Retirement age: 57 years for women and 62 years for men.
Working contracts: The employment contracts are regulated by legal clauses and to a lesser degree by collective agreements and individual negotiations.
The terms of employment contracts, the conditions of hiring and dismissal are strict.

Minimum wage: US $310
Average wage: The average monthly salary is around US $500 in the public sector and around US $420 in the private sector. Salaries are paid every two weeks and the 13th month is spread out over 3 payments in the months of April, August and December.
Social contributions: Social security contributions paid by employers: 10.75%.
Social security contributions paid by employees: 7.25%.

Social dialogue and involvement of social partners: Private sector workers have a right to form and to join unions of their choice. Public sector employees do not have a right to form unions. Government workers can form "associations" and negotiate collectively but only if they have a minimum of 50 members.
Unions: Panama Industrial Union (SIP) (Spanish only)
Unique National Union of the Building and related Industries (SUNTRACS) (Spanish only)
Unionization rate: 14.2%.
Labor regulation bodies: Federation of Private Enterprises

Any comments about this content? Report it to us.