Are you thinking about opening a new business full time? If so, Panamanian laws must be understood and complied with in order to create a company in Panama as a natural person.
Legal Business Structure
Your first consideration is to decide what type of business structure to use.
There are 3 normal business entities here in Panama:
- Sole Proprietor:Where you and your spouse & family operate a business as sole owners.
- Partnership:Where you team up with one or more persons in running the business.
- Corporation:Where you register with the government as a company issuing stocks, having a Board of Directors and corporate officers.
While a sole proprietorship can be an oral agreement between close family members, the other two entities need the assistance of a Panamanian lawyer. That’s because legal documents need to be prepared forming a Partnership or Corporation. If they are wrongly prepared, they will be legally null and void causing a business legal nightmare for its members.
In this article we will only consider corporations.
Create a company in Panama as a natural person: Corporation (Sociedad Anonima)
A Panamanian corporation is formed by two persons (called Subscribers) or Nominees (who act on behalf of absent foreigners) who execute legal documents called the Articles of Incorporation. Those documents are filed with the Panama Public Registry office. After the corporation is formed, only one shareholder will be required.
Corporate shares are issued which can be of various classes, can have par value or not, may be officially registered, or can be discreet Bearer shares.
The corporation must have a resident Registered Agent (Panamanian lawyer).
There must be at least three Directors whose names must be in the Articles of Incorporation. Any changes of Directors must also be filed with the Public Registry. Unless the Articles are changed or the corporation merges or dissolves there will be no other filing requirements.
Foreign Corporation
If you already have a corporation in another country, it can do business in Panama by filing the following documents at the Public Registry Office:
- A notarized Spanish translation of the Articles of Incorporation;
- Board of Directors minutes authorizing the Panamanian registration;
- Copies of the most recent financial statements;
- A certificate from a Panamanian Consul confirming that the company is organized according to the laws of its place of incorporation;
- Notification of the transfer of capital the Panamanian operation.
For more information about how to create a company in Panama as a natural person?, contact us.
