Licensing your Corporation to Do Business in Panama
If you are going to operate a business from Panama, then this should be properly licensed with the Ministry of Commerce (MICI). Unfortunately, while this is a simple process, Panamanian law does require that this be prepared by a lawyer. Therefore, the corporation should give a Special Power of Attorney to the lawyer, in order for them to submit the business license application.
Types of Business Licenses:
There are three (3) principal types of licenses which a business can have:
Among these 3 types of licenses, you have a myriad of business types, such as:
For the full list of business types and the type of license required, please see http://www.panamatramita.gob.pa/InfoExtra/XTRAiybVeX.pdf (This is a website provided by the Panamanian Government to assist in processing applications.)
The Application Process
In order to apply for a business license, you will already need to have an "office" or place of business leased or ready to be leased. In the business license application, it is necessary to indicate the place of business.
Some clients choose to list their home as their initial place of business, while they get set up, and then file a change of place of business once they have the lease. Obviously, if the application will be linked to the client's immigration process (Micro or Macro Investor Visa), then we recommend that you first find the place of business and file the application with the actual place where the business will be. Otherwise, it is possible that the Immigration Department will deny the immigration application, indicating that it is not a "real" business.
The Documentary Requirements
Presenting the application:
The license application is a simple, one-page form, in which the lawyer will indicate the name of the business, the trading name (DBA) if different from the corporation name, the address, the principals (officers & directors), the business purposes (what kind of business will be undertaken), the actual capital invested in the business, date of start of business, and the type of license being applied for.
The application form must be accompanied by certain documents, which are dealt with in the previous section.
Interim and Definitive Business License:
While the Ministry of Commerce is reviewing the application, they will issue an interim business license. With this document, it is possible to open the business to the public and begin operating. It is also possible to continue with further business steps.
Usually the MICI takes about 2 weeks to finish their review of the application and issue the definitive business license. Once the business has the license, they should frame it and it should be displayed in the "store front" of the business, where any person that walks in can easily see it.
What's the next step?
After the company has obtained the business license from MICI, it may still be necessary to register with other government entities or local authorities. For example, most businesses should be registered with the Social Security Board, Ministry of Labour, and the local city council (Alcaldía) and pay a municipal tax (payable monthly) for operating in that district. It is therefore necessary to notify the city council that the business has opened, and the city council will send an inspector to the business, and pass (by resolution) the amount of city council taxes to be paid (this is pretty standard, but various from town to town).
It may also be necessary to have health inspectors or the such-like inspect and give operation permits, depending on the type of business which is to be run.
Return to: Doing Business in Panama.
Go to: Fees & Costs.
For legal advice specific to your particular business, please contact us.
Last modified 08-May-2009 12:07 -0400
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