Many expats coming to Panama, whether to travel or to establish residency in the country, choose to open a business, which in most cases requires obtaining a business license in Panama.
The business license or operations permit lets you carry on commercial activities and commercial transactions in the country, being the Ministry of Commerce and Industry the entity responsible for issuing the licenses.
The requirements vary if the license is requested for an entity or a natural person.
Requirements for an entity
- Copy of the Legal Representative’s ID (cedula)
- Company name
- Name of Board of Directors members
- Company’s RUC number, duly registered with the General Revenue Directorate (DGI)
- Physical location address
- Activity the company will carry on
Requirements for a natural person
- Copy of the owner’s ID (cedula)
- Physical location address
- Company name
- Activity the company will carry on
Keep in mind that once the registration of a notice of operation is made, it must be visibly displayed in your offices.
Regulated activities
The activities below have additional requirements they must meet to obtain a business license:
- Establishments of occasional lodging, nightclubs, boites, and cabarets.
- Places that sell alcoholic beverages must comply with the provisions of Article 2-A of Law 55 of 1973.
- Activities derived from administrative concession contracts of the State or local authorities.
- Banking, trust companies, insurance, reinsurance, real estate, pawnshops, money remittance houses, financial companies, securities houses, investment advisors, stock exchanges, and stock exchanges.
- Securities firms, investment advisors, stock exchanges, and central securities depositories.
- Pharmaceutical establishments.
- Hospitals.
- The sale of arms, ammunition, equipment, and related materials.
- Those of admission, transportation, and delivery of mail.
- Those related to situations of high public risk due to their implications to health, environment, or national security.
Business activities that don’t need a business license
Certain business activities do not require a business license. These include:
- Agricultural, livestock, or similar activities.
- Production and sale of handicrafts and other manual or homemade industries.
- The exercise of non-profit activities.
- The exercise of activities that are not acts of commerce or industrial activities, carried out by natural persons or civil partnerships.
- The exercise of liberal professions, individually or through civil societies, since they are not considered acts of commerce.
Some benefits of having a business license
Having a business license comes with many benefits, among them, giving security to customers because the business is legitimate and has a national business ID. It also opens doors to businesses requiring financing from local institutions.
Licensed businesses can also obtain tax incentives. For example, the business could also be registered as an MSME (PYME), and enjoy its first two years with no income taxes.
Also, a business license is an initial step to protect the business trademark, reserving the commercial name in the system.
We can assist you with the process
The business license formalizes your business. It comes with responsibilities but also the benefit of following the process and operating legitimately in Panama. The Kraemer & Kraemer team will be glad to assist you through the process of obtaining a business license. Send us a note info@kraemerlaw.com and have one of our Client Relations Team members talk to you
