Companies that do business in Panamá vs. Companies that DO NOT DO business in Panamá
Many of our clients request from us the incorporation of a company that will not necessarily operate/do business in Panamá or from Panamá, for which we advise the formation of a Panamá Company (S.A., INC, Corp. or S de RL). This is where the doubt arises for may clients, on regards of if there is a special kind of entity which is use to operate in Panamá, an another kind of entity which is use to operate outside of Panamá, which is not the casein Panamá jurisdiction.
In Panama, unlike other countries, the same legal figure mention above can be use , to carry out commercial activities either in Panamá a or outside of Panamá; the nature of offshore or not, will be given, by the way in which the companies RUC (Unique Taxpayer Registry) , is register before the fiscal authorities. This last phase of the process of incorporation of the company, should be the responsibility of the law firm who registered such company.
Differences between the use of company which carry out activities outside of Panamá VS. Inside of Panamá:
A Panamá company is considered as its activities is done Panamá if any of the following conditions are met:
The Panamá company has commercial offices in Panamá.
The Panamá company has an aviso de operaciones.
The Panamá company offers services of any kind, in Panama or from Panamá
The Panamá company sells products in Panamá or from Panama either wholesale or retail.
The Panamá company distributes products in Panamá or from Panamá
The Panamá company issues invoice to natural or legal persons who are going to use those invoices as a deductible from their income tax declaration.
A Panamá company that meet any of the characteristics described above, is obligated to:
To pay its annual maintenance fee (US $ 300.00).
To pay income tax on net earnings (20%).
To pay IVA (If generate more of US $ 35,000.00 incomes per year).
To pay municipal taxes.
To pay other types of taxes depending on the activity.
A Panamá company is considered to carry out activities OUTSIDE of Panama if any of the following conditions are met:
The Panamá company does not offer services (of any kind) in Panamá or from Panamá, regardless of whether the payments are received in a bank account in Panamá.
The Panamá company issues invoices related to the sale of products / merchandise, whose destination is not Panamá, regardless of whether the payments are received in a bank account in Panamá.
The Panamá company issues invoices to natural or legal persons outside of Panamá.
A Panamá company that do not operate in Panamá, are obligated to:
To pay its annual maintenance fee (US $ 300.00).
To maintain accounting records privately, made by an authorized public accountant. Original accounting records can be kept in Panamá or outside of Panamá.
