How Much Does It Cost to Maintain a Corporation in Panama? Complete Guide to Business Expenses

One of the key expenses for maintaining a corporation in Panama is government fees. Let’s break down the main aspects:

• Annual Franchise Tax: Every corporation must pay an Annual Franchise Tax of $300. This is a mandatory requirement to keep the company active and registered with the Public Registry of Panama.
• Commercial license tax: Depending on the nature of the business activity, an additional tax based on gross income may apply.

It’s crucial to pay these fees on time to avoid penalties or the suspension of your company’s operations.

To ensure that your company complies with fiscal and tax regulations, it’s mandatory to maintain accounting records and, in some cases, conduct specific audits. The most common costs include:

• Monthly accounting: Depending on the complexity and volume of transactions, this service can cost between $100-$500 monthly.
• Annual audits: Mandatory for companies that exceed certain levels of annual income. Costs may range from $1,000 to $3,000+, depending on the audit firm you select.

Working with experienced accountants ensures that your reports are accurate and comply with local regulations.

Legal services are essential to maintain your corporation in Panama. Here are some of the associated costs:

• Resident agent: It is mandatory to hire a resident agent who acts as a liaison between your company and the Panamanian government. Fees usually range between $300 and $800 annually.
• Renewal of the board of directors: In some cases, companies use legal services to manage this process, incurring additional costs based on specific needs.

In addition to these expenses, having access to ongoing legal advice can be invaluable when facing litigation or other complex legal matters.

Beyond mandatory costs, there are other expenses to consider to ensure your company runs smoothly:

• Office maintenance: If you need a physical office, prices can vary greatly depending on location and size. An alternative to consider is a virtual office for a more cost-effective solution.
• Banking services: Opening and maintaining corporate bank accounts may include monthly or annual charges, as well as transaction fees for international operations.
• Administrative management: From paying basic services to managing personnel, these costs vary depending on the size and structure of your company.

Planning for these expenses will help you avoid surprises and maintain financial control over your organization.

To give you a better idea, here's a general estimate based on different scenarios:

• Small businesses: Annual costs are usually around $1,500 and $3,000. This includes government fees, basic accounting services, and resident agent fees.
• Medium-sized companies: With a more complex activity, expenses can amount to $3,000 - $5,000, considering additional audits and legal services.
• Large companies: If your organization requires multiple administrative and legal services, the budget may exceed $7,000 per year.

These estimates vary depending on the particular needs of each company. For a personalized quote tailored to your objectives, we recommend that you contact our Limitless Legal experts.