Legislation of Panama

Service packages Legislation Tax System Audit Services

List of laws and regulations

Act name
Scope of law
corporations
foundations
limited companies
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Tax Exchange Information Agreement (TEIA)

United States

List of state regulatory authorities

Corporate info

Legal system
civil law
Types of entity
Corporation (Sociedad Anonima); General Partnership; Limited Partnership; Civil Partnership; Commandite Company; Sole Proprietor
Shelf companies permitted
Yes
Incorporation timescale for a new company
1-2 days
Company suffix
Corporation (Corp.), Incorporated (Inc.), or Sociedad Anónima (S.A.)
Sensitive words
words which convey that the business of the company is of a licensed nature, such as Betting, Insurance, Financing, Trust or Banking business
Cyrillic alphabet permitted in company name
No
Local registered office
Yes
Local registered agent
Yes
Information to be kept at the registered office
accounting books and records (in case of operating in Panama)
Seal required, type of seal
not required
Redomiciliation (to, from) permitted
permitted

Director and secretary

Minimum number of directors
3
Residency requirements for directors
No
Corporate directors permitted
Yes
Directors’ meetings/frequency/location
No requirements
Disclosure to local agent
Yes
Disclosure to public
Yes
Company secretary required
Yes
Residency requirements for a secretary
No
Qualified secretary required
No
Corporate secretary permitted
No

Shareholder and beneficiary

Minimum number of shareholders
2 subscribers; 1 shareholder
Residency requirements for shareholders
No
Corporate shareholder permitted
Yes
Meetings/frequency/location
No requirements
Disclosure to local agent
No
Disclosure to public
No
Beneficiary info disclosure to
No

Shares and share capital

Minimum authorized share capital
No requirements
Minimum issued share capital
No requirements
Minimum paid share capital
No requirements
Authorized capital payment deadlines
No requirements
Issued capital payment deadlines
No requirements
Standard currency
Balboa/USD
Standard authorized share capital
10000
Standard par value of shares
20
Shares with no par value permitted
Yes
Bearer shares permitted
Yes

Taxes

Personal tax
0-25%
Min. rate for corporate tax
25%
Corporate tax (in detail)
The corporate income tax rate is 25%. If the taxable profit of the company exceeds $ 1.5 million, then it pays income tax or 4.67% of gross taxable income, if the latter amount is greater.
Capital gains tax
10%
Capital gains tax. Details
Gains from the sale of assets are taxed at a rate of 10%.
VAT
7%
VAT. Details
The tax is similar to VAT. The standard tax rate is 7%. Some goods and services are subject to rates of 10% and 15%.
Withholding tax
10%(5%,20%)/12,5%/12,5%
Other taxes
Social contributions, Operations Notice tax, Real estate tax
Exchange control
No
Government fee
Stamp duty
0,1%

Accounts

Requirement to prepare accounts
No
Requirement to file accounts
No
Publicly accessible accounts
No
Requirement to file Annual Return
No
Publicly accessible Annual Return
No
Audit required
No

General information shortly

Location
Central America
Total area
75,420 sq. km
Population
4.252.620 (2020)
Capital
Panama City
National currency
Balboa/USD
Conditional reduction of currency
PAB, USD
Against USD
1
Climate, average max and min t°
Tropical maritime; hot, humid, cloudy; prolonged rainy season (May to January), short dry season (January to May); avg. maximum temperature (July) +36°; avg. minimum temperature (January) +28°
Time difference from Moscow
- 7 hours
Dialing code
+507
State language
Spanish
Ethnic groups
Mestizo 70%, black, mulatto and sambo 14%; white 10% and Indian 6%
Literacy rate
95.4% (2018)
History
Originally Panama was populated by local Indian population. In 1502 Christopher Columbus explored eastern territories of Panama. In 1510 Vasco Nuñez de Balboa established the first colony here. Explored and settled by the Spanish in the 16th century, Panama broke with Spain in 1821 and joined a union of Colombia, Ecuador, and Venezuela - named the Republic of Gran Colombia. When the latter dissolved in 1830, Panama remained part of Colombia. With US backing, Panama seceded from Colombia in 1903 and promptly signed a treaty with the US allowing for the construction of a canal and US sovereignty over a strip of land on either side of the structure (the Panama Canal Zone). The Panama Canal was built by the US Army Corps of Engineers between 1904 and 1914. In 1977, an agreement was signed for the complete transfer of the Canal from the US to Panama by the end of the century. Certain portions of the Zone and increasing responsibility over the Canal were turned over in the subsequent decades. With US help, dictator Manuel NORIEGA was deposed in 1989. The entire Panama Canal, the area supporting the Canal, and remaining US military bases were transferred to Panama by the end of 1999.
Credit rating
BBB
Government type
Democratic republic
Executive branch
Head of Government: President, Government: Cabinet of Ministers appointed by President
Legislative branch
National Assembly (71 members)
Judicial branch
Supreme Court (Corte Suprema de Justicia), four Superior Tribunal, Magistrate courts
Unemployment
18.5% (2020)
GDP per capita rank
86 (2019)
Corruption perceptions index rank
38 (2018)

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