Breakdown of how self-employment works for expats in Panama
Self-employment is a viable option for expats in Panama, especially those who want to work in industries that are not heavily regulated. To become self-employed in Panama, expats need to follow a few steps.
As a self-employed person in Panama, you are responsible for your own income, taxes, and insurance. You will need to register with the Ministry of Commerce and Industries (MICI) to operate legally.
Detailed step-by-step guide on how an expat can register as self-employed in Panama
Here is a detailed step-by-step guide on how an expat can register as self-employed in Panama:
Check if you are eligible: Before registering, make sure you are eligible to work as a self-employed person in Panama. You need to have a valid work visa and a residency permit.
Choose your legal structure: As a self-employed person, you have two legal structures to choose from: a sole proprietorship or a limited liability company (LLC).
Register with the Ministry of Commerce and Industries (MICI): You must register your business with the MICI before you can start operating. You can register online or in person at the MICI. You will need to provide your personal details, business name, legal structure, and a description of your business activities.
Obtain necessary licenses: Depending on the nature of your business, you may need to obtain additional licenses and permits from various government authorities. These may include a commercial registration certificate, an industrial registration certificate, or a municipal license.
Open a Panamanian bank account: To receive payments and pay taxes, you will need to open a Panamanian bank account. You can do this online or in person at a bank branch. You will need to provide identification and proof of address.
Register for tax: You must register your business for tax with the Panamanian Tax Authority. You can do this online or by completing a paper form. You will need to provide personal and business details, including the name of the company, the legal structure, and an estimate of your annual income.
Get business insurance: Consider taking out insurance to protect your business and yourself in case of accidents, illnesses, or other unforeseen circumstances. The most common insurances for self-employed people are public liability insurance, professional indemnity insurance, and personal insurance.
Can you work as a digital nomad in Panama?
Yes, you can work as a digital nomad in Panama. However, you will need to have a valid work visa and a residency permit. Additionally, you may need to meet certain requirements to obtain a Panamanian work visa, such as having a job offer or starting a business.
Breakdown of how an expat can start a company in Panama
Starting a company in Panama is a relatively straightforward process that requires a few steps. The most common legal structure for businesses in Panama is a limited liability company (LLC).
Detailed step-by-step guide on how an expat can set up a company in Panama
Here is a detailed step-by-step guide on how an expat can set up a company in Panama:
Choose your legal structure: The first step in setting up a company in Panama is to choose your legal structure. The most common structure for small and medium-sized businesses is a limited liability company (LLC). An LLC offers limited liability protection to the shareholders and requires a minimum share capital of $10,000.
Reserve a company name: Before registering your company, you must reserve a name with the Public Registry of Panama. You can check the availability of the name on their website and reserve it for up to six months.
Draft and sign the Articles of Incorporation: The Articles of Incorporation is a legal document that outlines the structure and rules of your company. It must be drafted in Spanish and signed by all shareholders.
Obtain necessary licenses: Depending on the nature of your business, you may need to obtain additional licenses and permits from various government authorities. These may include a commercial registration certificate, an industrial registration certificate, or a municipal license.
Register your company: Once you have obtained the necessary licenses and drafted the Articles of Incorporation, you can register your company with the Public Registry of Panama. You can do this online or in person at the registry. You will need to provide personal and business details, including the name of the company, the legal structure, and a description of your business activities.
Open a Panamanian bank account: You must open a Panamanian bank account for your company to receive payments and pay taxes. You can do this online or in person at a bank branch. You will need to provide identification and proof of address.
Register for tax: You must register your company for tax with the Panamanian Tax Authority. You can do this online or by completing a paper form. You will need to provide personal and business details, including the name of the company, the legal structure, and an estimate of your annual income.
Get business insurance: Consider taking out insurance to protect your business and yourself in case of accidents, illnesses, or other unforeseen circumstances. The most common insurances for businesses are public liability insurance, professional indemnity insurance, and personal insurance.
Incentives or Programs for Expats in Panama
There are several incentives and programs available to encourage expats to become self-employed or set up a company in Panama. Here are some examples:
Panama Pacifico: Panama Pacifico is a special economic zone that offers tax incentives and other benefits to businesses. The zone is located near Panama City and offers a range of amenities and infrastructure for businesses.
City of Knowledge: City of Knowledge is a technology park and innovation hub that offers support and resources to businesses in various sectors, including technology, research, and development.
Start-Up Panama: Start-Up Panama is a government-funded initiative that offers support and funding to start-ups and entrepreneurs. The program offers mentorship, training, and networking opportunities to help businesses grow and succeed.
Investment Incentives Law: The Investment Incentives Law offers tax incentives and other benefits to businesses that invest in certain sectors, such as tourism, renewable energy, and manufacturing.
In conclusion, self-employment and business start-ups in Panama are accessible to expats with a relatively simple process. The Panamanian government provides ample support and incentives to encourage entrepreneurs to start their own businesses in the country. With the right legal and financial advice, expats can take advantage of these opportunities and build successful businesses in Panama.