Nonprofit Organizations in Panama

Nonprofit Organizations (NPO) are legal Panamanian entities used to pursue charitable purposes.

The NPO is a private entity, with no political association, whose profits CANNOT be distributed to its founders, members or directors. However, the proceeds from NPO activities can be used to hire members, personnel or any other required services to fulfill its mission.

The incorporation process is simple but may take 4 to 8 months. The Panamanian Government Ministry must approve the request, which must also have the consent of any other government institution related to the NPO activities and purpose.

Statute

The NPO statute must contain the following information:

Name and address
Detailed explanation of its objectives, whether charitable, for union, or of any other nature
Invested equity, and the NPO activities to pursue the means to sustain its operations

Participation fees, membership process, and the cases where membership can be revoked
Procedure to modify the statute
Accounting process, for income and expenses
Dissolution process, if it’s ever the case

Requirements

The requirements to create an NPO include:

Board of Directors member list with at least 3 persons, natural or legal
Copy of each natural Board member’s ID. In the case of legal board members, a valid certificate from the Panamanian Public Registry and official General Assembly minutes approving participation
Certificate of incorporation, composition of the Board of Directors and official minutes approving statute

NPO statute, signed by the President and Secretary, explaining the guidelines, objectives, and organizational structure of the NPO
Legal incorporation request presented by a Panamanian lawyer

Benefits

Some benefits that NPOs enjoy include:

It’s a legal entity
Can be used to represent popular organizations such as churches or community groups
May receive fiscal benefits

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