PANAMA BUSINESS LICENSE
About the Panama Business License
Law No. 5 of January 11, 2007 regulates the process to obtain a Business License in Panama. The government entity responsible to issue and supervise business licenses is the Ministry of Commerce and Industries.
A Business License is a legal document issued by the Government that allows a natural or legal person to carry out commercial activities within Panamanian jurisdiction.
Requirements to obtain a Business License in Panama
All Business Licenses must include the name of the company, the location in Panama where it operates, the operation’s start date, the number of employees (at least 1), and the specific activities planned to carry out.
The requesting party may choose to register the license as a natural or a legal person. Nevertheless, it is important to keep in mind that this document is of personal and non-transferable nature, and will protect the holder only in those activities declared on the license.
Business Licenses registered under a legal person require a $55 government fee plus legal fees, copy of ID of the legal representative, names of the members of the board of directors, registration at the Panamanian Tax Office (DGI), and the Unique Taxpayer Registration (RUC in Spanish). In this case, legal risks are limited to the assets owned by the legal person in case of lawsuits.
Applications filed under a natural person have a lower government fee of $15 plus legal fees, and require a Panamanian ID. This approach may expose the individual under whose name the license was registered as well as his/her personal property in the event of legal lawsuit.
Commercial activities that involve selling alcoholic beverages (such as discotheques, restaurants, cafeterias, supermarkets) may follow other requirements and costs in order to have their Business License issued.
Moreover, government-regulated commercial or industrial activities – such as investment advising, stock exchange, financing, pharmaceutical establishments, clinics, hospitals, private insurance agencies – must fulfill all legal requirements before starting operations.
Other Important Details
Business Licenses, for a company properly registered and meeting all requirements, are issued on the day it is requested. However, the company must start operations in a twelve-month period once the business license is obtained.
On top of the initial cost associated to the Business License, there will be an annual fee equivalent to 2% of the company’s social capital or a minimum of $100.
Businesses registered in Panama that operate outside of its geographical jurisdiction, also known as OFFSHORE, are NOT required to have a Business License.
Kraemer & Kraemer is ready to assist you in the process to obtain your Business License. Contact us today!