Why is Panama the Best Place to Incorporate Your Startup?

Corporation (Sociedad Anónima): A Flexible and Scalable Solution

A Corporation (S.A.) is one of the most popular business structures among entrepreneurs due to its flexibility. This model allows for easy issuance and transfer of shares, making it ideal if you plan to scale your startup or seek investors in the future. Additionally, corporations provide shareholder anonymity and a high level of asset protection.

Limited Liability Company (LLC): Simple Yet Effective

The Limited Liability Company (LLC) is designed for smaller operations and simpler business structures. It's a great option for startups prioritizing operational simplicity, as it limits members' liabilities to their invested capital while offering a more straightforward management process.

• Which to choose? If your goal is to attract investment and expand, we recommend a Corporation (S.A.). If you prefer more direct management with less bureaucracy, an LLC might be sufficient.

One of Panama's biggest attractions is its territorial tax system, which only taxes income generated within the country. This means income earned outside of Panama is tax-exempt, offering significant savings for international startups and businesses engaged in digital commerce.

Highlighted Tax Benefits:

• Free Trade Zones: Areas such as the City of Knowledge offer full or partial tax exemptions for technology and innovation startups.
• Tax incentives for specific industries: Panama offers tax benefits for sectors such as logistics, technology, and financial services.
• No taxes on capital gains: There are no taxes on the transfer of shares or dividends if they stem from foreign income.

In summary, Panama provides unique tax-saving opportunities, making it an unbeatable destination in the Caribbean and Latin America.

Relocating your team to Panama is simpler than you might think, thanks to numerous immigration incentives and labor benefits. One of the main programs is the temporary residence permit for foreign workers, which allows them to live and work legally in the country.

Direct Benefits of Relocating Teams:

• Startup Visas: Panama facilitates work visas for companies with local operations, simplifying the process of relocating foreign talent.
• Lower relative cost of living: Panama is more affordable compared to other tech hubs, which can translate into lower operational costs.
• Quality of life: Modern infrastructure, a warm climate, and proximity to key markets make Panama an attractive location for expatriate professionals.

This environment not only makes it easier to relocate your staff but also attracts local and international talent.

Special economic zones, such as the City of Knowledge, are a key point for tech startups and multinational companies looking to establish a presence in the region. These zones offer unique incentives, including tax exemptions, logistical support, and access to world-class infrastructure.

Main Advantages:

• Tax exemptions: In these zones, you can operate without needing to pay taxes on income generated within Panama.
• Access to networks and resources: The City of Knowledge hosts a vibrant innovation and technology community where your company can collaborate with other startups and experts.
• Tailored infrastructure: Offices, labs, and business development programs are available to accelerate your startup's growth.

Forming your company in Panama with Limitless Legal is a simple and efficient process. Here's a quick guide:

1. Choose the legal structure: Decide between a Limited Company or an LLC, depending on the needs of your business.
2. Register your company: All business training requires registration in the Public Registry and establishing a local tax address.
3. Open bank accounts: Panama has a robust banking system that guarantees the security of your assets.
4. Manage permissions and licenses: Depending on the industry, you may need specific permissions.
5. Contact experts: At Limitless Legal, we accompany you every step of the way with a personalized and professional approach.

With this process, you'll be ready to operate your startup and take advantage of all the benefits that Panama offers.