Many of the foreigners that arrive to Panamanian territory, either to travel or to establish their residence in the country, choose to open a company that most of the time requires a Panama business license.
The business license or Operation Notices grants the legal authority to engage in commercial activities and transactions in the country , with licenses being issued by the Ministry of Commerce and Industry. This permit is regulated under Law No. 5 of 2007, which establishes the requirements and procedures to formalize any commercial or industrial activity.
The process of obtaining a business license is done through the PANAMAEMPRENDE online system. This system manages the Panama business license services and allows the application to be more agile and prevents the need for multiple additional permits, except in specific cases regulated by special laws.
Thanks to Law No. 2 of 2013, the process was simplified, facilitating business formalization for both locals and foreigners. According to PANAMAEMPRENDE’s statistics for Existing Notices of Operation, during 2023 more than 30,000 companies, both legal and natural persons, started operations.
Once the Panama business license is obtained, it has full legal validity and is mandatory to start any commercial or industrial activity in the country. The businesses are also registered before the General Directorate of Revenues, which makes it easier for them to comply with national and municipal tax obligations.
The requirements to obtain the Panama business license vary if it is requested for an entity or for 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 operation notice of operation is made, it must be visibly displayed in your offices.
Regulated activities
The commercial activities below have additional requirements they must meet to obtain a Panama 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.
The Ministry of Commerce and Industries is responsible for verifying that the declared activities comply with applicable laws.
Business activities that don’t need a business license
Certain commercial activities do not require a Panama 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 Panama business license brings many benefits. This permit becomes a public document that validates commercial activities at a national level, providing security to customers, employees and suppliers as they perceive that the business is legitimate.
Additionally, companies with a Panama business license have access to financing from local banking institutions and business support programs, favoring the growth and expansion of companies. This financial help may include lines of credit, loans, and tax incentives.
Licensed corporations can also obtain tax incentives. For example, small and medium-sized enterprises (SMEs) can benefit from tax exemptions in the first years of operation, reducing the impact of income taxes in the initial stages of Panama businesses.
In addition, an operation notice is one of the first steps to protect your trademark and prevent third parties from using the same brand in the country. Having a commercial license allows you to reserve your company’s trade name in the PANAMAEMPRENDE system.
Finally, businesses with a Panama business license can participate in contracts and public bids, which opens the doors to work with the government and other entities, increasing their business opportunities.
We can assist you with the process
Obtaining a Panama City business license is a key step in establishing your business within the city. This license not only allows you to operate within Panama City but also extends the recognition of your business throughout the entire country. While it comes with certain obligations, it provides the benefit of legal operation both in the city and across Panama.
The Kraemer & Kraemer team will be glad to assist you through the process of obtaining a Panama business license. Send us a note info@kraemerlaw.com and have one of our Client Relations Team members talk to you.
