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Complete guide: entity types, registration, costs, taxes, labor laws, and break-even analysis
~38 days
Setup Time
~$565
Setup Cost
25%
Corporate Tax
100%
Foreign Ownership
#86
Ease of Business
| Entity | Min Capital | Foreign % | Liability | Min Shareholders | Best For |
|---|---|---|---|---|---|
Corporation Sociedad Anonima (SA) | 10,000 USD | 100% | Limited | 2 | Most common entity type - flexible structure, bearer shares permitted (must be held by custodian), no minimum paid-in capital |
Limited Liability Company Sociedad de Responsabilidad Limitada (SRL) | None | 100% | Limited | 2 | Smaller businesses and partnerships - simpler structure than SA, partners manage directly |
Branch of Foreign Company Sucursal | None | 100% | Unlimited | 0 | Foreign companies establishing operations in Panama - only taxed on Panama-source income |
Engage a Resident Agent
By law, all Panamanian companies must have a resident agent (a licensed attorney in Panama) who handles incorporation
1-2 days
~$300
Licensed Panamanian Attorney
Draft and File Articles of Incorporation
Resident agent drafts and files the articles (Pacto Social) with the Public Registry. No notarization needed.
2-5 days
~$250
Registro Publico de Panama
Obtain Tax ID (RUC)
Register with the tax authority (DGI) for the Registro Unico de Contribuyente. Required for all commercial activities.
1-3 days
Free
DGI (Direccion General de Ingresos)
Obtain Commercial Operating Notice
File the Aviso de Operacion (notice of operations) with the Ministry of Commerce and Industry (MICI)
1-3 days
~$15
MICI (Ministry of Commerce)
Register with Social Security (CSS)
Register as an employer with the Caja de Seguro Social for employee social security contributions
2-5 days
Free
Caja de Seguro Social (CSS)
Open Corporate Bank Account
Open a business bank account in Panama - due diligence requirements are strict, prepare comprehensive documentation
5-20 days
Free
Commercial Bank
$530/mo
Minimum Wage
$900/mo
Average Wage
48 hrs/week
Work Hours
30 days/year
Paid Leave
3.4 weeks/year
Severance
12.25% of salary
Employer Social Security
9.75% of salary
Employee Social Security
Required
Foreign Worker Permit
Foreign Worker Quota: Foreign workers generally limited to 10% of workforce (15% for specialized technical roles). Panama Pacifico zone has relaxed quotas.
Work Permit Process: Employer applies through the Ministry of Labor (MITRADEL). Standard process requires labor market test. Panama Pacifico and SEM regime have expedited work permit processing with relaxed quotas.
#86/190
Ease of Business Rank
6 days
Starting a Business
22 days
Registering Property
686 days
Enforcing Contracts
36/100
Corruption Perception
68%
Internet Penetration
PAB
Currency
UTC-5
Time Zone
12
Retail (months)
10
F&B (months)
11
Tech (months)
16
Manufacturing (months)
8
Services (months)