If you want to start your own business in Panama you need to follow a certain amount of official procedures, from registering for tax and social security to registering the company with the Ministries of Labour and Commerce.

It is recommended that companies are incorporated and the most popular type of incorporated business is known as Sociedad Anonima. You do not need to set up separate companies for onshore and offshore business. The next step is to register the company with the Ministry of Economy and Finance. This will give the business a tax registration number which is a combination of the details provided by the Companies Registry Office with an additional 2 digits added on by the MEF.

Step three is to register the company with the Ministry of Commerce and Industry. If you are an expat and want to own a company in Panama you can only obtain a ‘type A’ license for your business. Some business activities are reserved for Panamanian citizens. If you later become a Panamanian citizen you can then obtain a ‘type B’ license. In order to complete this step you must have your permanent address ready, so if you need specific business premises then you must have rented your offices or industrial unit.

When your lawyer submits an application for the company to be registered as a legal entity there is a certain amount of documentation that is required. This includes ID of the legal representative of the company, a certificate of good standing issued by the Public Registry and the payment for the registration. When this is done the Ministry of Commerce will give you a provisional license which allows your company to begin work. The final license will be issued after approximately 10 days.

The commercial license for your company will need to be displayed prominently at your business premises. It will need to be on show if the office is visited by inspectors. The license will show all the details of the company including a description of the type of business.

You will then need to register with the social security department. Those expats who will be moving to the country on the micro investor or immigrant investor programme will undertake to employ a minimum of 3 Panamanians so you need to ensure that they are registered with the social security department. You must also have the facilities in place to deduct contributions from their salary and making the payments to the government.

You will then need to register the details and employment contracts of your staff with the Ministry of Labour. Labour contracts can be bi-lingual if you require. If your business is based in Panama City then you will need to register with the city council as there is a tax to be paid in this district.

It may be that you are already a self employed person and do not want to establish a company but simply work on your own. It is possible now to get a visa as a self employed person. This type of visa will apply to artists of all disciplines, designers, chefs, electricians, plumbers and several other trades. The visa will be given if the discipline is considered to be of benefit to the country but the number of people practising this profession may be restricted if it is considered that they would be taking work away from a Panamanian person.

Alternatively you could purchase an existing business in Panama. There will always be businesses for sale and you would be able to do this as an investor. You would still have the requirement to employ a number of locals and you would have to follow the same steps to ensure that the company is registered with the local authorities and the social security department in order to obtain the relevant permits. A sale and purchase of a business would need to be overseen by a lawyer.

Finding an accountant in Panama is easy as there are many qualified and experienced professionals operating as accountants in all areas. The Accounting Technical Board is in operation in the country to monitor the working practices of accountants and now has legal authority to set the standards for accountancy firms.