How Much Does It Cost to Start a Business in Panama?

Opening a company in Panama can be a strategic decision for entrepreneurs. However, the exact cost varies depending on the type of company you want to set up, the characteristics of your business and the additional services you require. Here's a breakdown of the main associated costs:

• Establishment of the company: The initial cost to register a public limited company in Panama is between $1,000 and $1,500, depending on factors such as the hired lawyer and administrative expenses.
• Appointment of nominal directors: This service usually costs between $300 and $500 per year, for each director, ideal for those who don't want to appear on public records.
• Annual corporate rate: Companies must pay a fixed annual rate of $300 to the Panamanian government to remain in force.
• Bank account opening: The process of opening a corporate bank account may include additional costs depending on the bank and the services required.
• Other legal and administrative services: Services such as drafting the Social Pact or obtaining the Single Taxpayer Registry (RUC) can range from an additional $100 to $300.

Having a professional service such as Limitless Legal ensures clear, transparent and personalized planning.

Setting up a company in Panama involves completing certain legal steps that ensure compliance with local regulations. Here are the key steps you should follow:

1. Choosing the type of company: In Panama, public limited companies are the most common, but you can also opt for other legal structures such as limited liability companies (SRL).
2. Drafting of a Social Pact: This document is essential to establish the terms of the company and must be drafted by a lawyer registered in Panama.
3. Registration in the Public Registry: Once the Social Pact has been signed, it is necessary to register the company in the Public Registry of Panama. This process usually takes 3 to 5 business days.
4. Obtaining the Single Taxpayer Registry (RUC): Every company registered in Panama must obtain this registration for tax purposes.
5. Opening a business bank account: This step is mandatory to facilitate the company's financial operations.

Each of these steps requires legal and administrative expertise to streamline the process and avoid errors. At Limitless Legal, we are ready to accompany you at every stage.

The joint-stock company (S.A.) is the most popular business structure in Panama, used by both locals and foreigners. To set up a S.A., you need to meet these requirements:

• Founding members: Minimum of three people (they can be local or foreign) to sign as initial shareholders.
• Nominal Directors: It is required to appoint at least three directors. This may include nominal directors for greater confidentiality.
• Minimum share capital: Although no initial investment is required, authorized capital is usually set at $10,000, distributed in shares.
• Resident agent: It is mandatory to hire an attorney registered in Panama to act as a resident agent.
• Social Pact: This document sets out the purpose, permitted activities, share capital and other details of the company.

These requirements ensure a strong legal framework that protects the interests of each company and its partners.

Aside from the basic costs, it is important to consider other additional services that may be necessary when opening a company in Panama:

• Monthly accounting services: Depending on the volume of transactions, this service may have an initial cost of $100 to $300 per month.
• Payment of taxes: Panama offers a highly competitive tax system, but it's vital to comply with local tax obligations and rates.
• Business Licenses: Some economic activities require specific permits. The cost will depend on the industry and location of the business.
• Legal and Immigration Assistance: If you are a foreigner, you probably need support with residency or visa issues, whose costs can vary between $1,500 and $5,000 depending on your case.

With the right approach, many of these investments can maximize efficiency and reduce long-term expenses.

Panama not only stands out for its stable economy and fiscal benefits, but also for its strategic location and global access. Here are some key benefits:

• Tax Incentives: Panama does not tax revenues generated outside its territory, making the country a fiscally attractive destination.
• Economic and social stability: With one of the strongest economies in the region, it offers a favorable investment environment.
• Free Zones: Places like the Colon Free Zone provide tax and customs advantages.
• Advanced infrastructure: Panama has a strong banking system and first-rate connectivity for international trade.

These characteristics make Panama an excellent option for establishing both startups and large corporations.