Entrepreneurial Companies in Panama: Everything You Need to Know

An Entrepreneurship Company is a type of legal corporation introduced by Law No. 186 of 2020 in Panama. It is exclusively aimed at encouraging the creation and development of micro and small businesses, providing a simplified regulatory framework and tax benefits designed to support entrepreneurs in their early stages of business.

Its advantages include:

• Exemption from some taxes for the first few years.
• Simplified access to contracts with the State.
• Lower initial constitution costs.

This instrument is ideal for those who seek to formalize their businesses and operate within the Panamanian legal framework, reducing common barriers for new entrepreneurs. With the help of Limitless Legal, this process can be even easier.

To begin the process of setting up an Entrepreneurship Company, it is essential to comply with certain requirements established by the legislation:

1. Type statute: This is the official document that regulates the company and is used as a basis for registration. The Entrepreneurship Act already includes a pre-drafted model to streamline the process.
2. Minimum share capital: The law states that the minimum share capital must be less than 150,000 balboas. This ensures that the approach is exclusively for micro and small businesses.
3. Income Limits: The company's annual turnover must not exceed 150,000 balboas to be able to remain under this legal figure.
4. Registration and Approval: You must register your company in the Public Registry of Panama, complying with established procedures.

It is essential that each documentation be submitted correctly to avoid delays. At Limitless Legal, we assist you during every step of the process so you can start trading as soon as possible.

Setting up an Entrepreneurial Company in Panama doesn't have to be complicated. With these clear steps, you'll be closer to getting started legally:

1. Define your business idea and ensure that it meets the billing and income conditions established by law.
2. Request the model of Standard statute of Law No. 186 of 2020 and adjust it to the characteristics of your business.
3. Register your company in the Public Registry of Panama.
4. Get authorization from the Ministry of Commerce and Industry of Panama (MICI).
5. Manage your Single Taxpayer Registry (RUC) at the Directorate General for Revenue (DGI).

These steps require precision and experience, and this is where Limitless Legal can make a difference, ensuring that the entire process is handled efficiently and professionally.

One of the biggest attractions of Entrepreneurship Companies are the incentives offered by the Entrepreneurship Act:

• Exemption from certain taxes: For the first two years, you're exempt from certain taxes, allowing you to invest more in your business.
• State contract facilities: Your company will be able to participate in contracting processes with the State more easily.
• Access to finance: We have preferential credit programs aimed at micro and small businesses.
• Tariff rebates: It applies to certain goods and supplies necessary for your operation.

These benefits have been designed to reduce the initial burdens faced by entrepreneurs, encouraging innovation and the stability of new businesses.

While traditional commercial companies are often subject to stricter requirements in terms of capital, taxes and formalities, the Entrepreneurship Company greatly simplifies these processes.

For example:

• Lower initial requirements: Lower share capital and simplified registration processes.
• Government support: The Entrepreneurship Act offers incentives specifically designed for early-stage entrepreneurs.
• Flexibility: Unlike other companies, this figure prioritizes operational agility for micro and small businesses.

This difference allows Panamanian entrepreneurs to focus on growing their businesses without unnecessary worries.