About Corporate & Commercial Law in Panama
Corporate & Commercial law in Panama covers the legal framework that governs businesses, corporations, and commercial transactions within the country. Panama is internationally recognized as a hub for international business, trade, and shipping, thanks to its strategic geographic location, the Panama Canal, and its business-friendly legislation. The legal system is based on civil law and provides a flexible environment for both local and foreign investors to establish and operate businesses. A wide range of entities, such as corporations, limited liability companies, and foundations, can be incorporated, and there are specific laws regulating contracts, commercial transactions, mergers and acquisitions, competition, and intellectual property.
Why You May Need a Lawyer
Navigating Corporate & Commercial law in Panama can be complex, especially for those unfamiliar with the local legislative landscape or for non-resident investors. You may require legal help in the following situations:
- Starting a business or incorporating a company
- Drafting, reviewing, or negotiating contracts
- Mergers, acquisitions, or corporate restructuring
- Resolving shareholder or partnership disputes
- Compliance with Panamanian regulations, such as tax, employment, or anti-money laundering laws
- Protecting intellectual property rights
- Commercial litigation or dispute resolution
- Navigating cross-border transactions
- Closing or liquidating companies
- Franchising or licensing agreements
Local Laws Overview
Corporate & Commercial laws in Panama have several distinctive features:
- Company Formation: The process is straightforward and fast, allowing both residents and non-residents to establish corporations, known as Sociedad Anónima, or other legal structures such as LLCs or Private Interest Foundations.
- Foreign Investment: There are minimal restrictions on foreigners owning and operating businesses in Panama.
- Taxation: Panama operates a territorial tax system, meaning only income generated within Panama is subject to local taxation.
- Commercial Codes: The Commercial Code and Civil Code form the basis for commercial activities, contracts, and company operations.
- Employment Law: Businesses must comply with labor laws regarding employment contracts, minimum wage, severance, and social security.
- Intellectual Property: Panama has specific regulations for trademarks, patents, and copyrights that offer robust protection for intangible assets.
- Anti-Money Laundering (AML): Companies must comply with AML regulations, particularly if engaging in activities considered higher risk.
- Banking and Financial Services: The banking sector is strictly regulated to uphold international standards on transparency and financial integrity.
Frequently Asked Questions
What types of business entities can be formed in Panama?
Panama allows the formation of several business entities, including corporations (Sociedad Anónima), limited liability companies (LLCs), partnerships, and Private Interest Foundations. Each type has its own legal and tax implications.
Can foreigners own 100 percent of a Panama company?
Yes, foreigners can own and control Panamanian companies with no restriction on ownership. Directors and shareholders do not need to reside in Panama.
How long does it take to incorporate a company in Panama?
The incorporation process is efficient and can often be completed within a few days, provided all required documentation is in order.
What are the ongoing compliance requirements for companies?
Companies must maintain updated records, file annual returns, pay renewal fees, and comply with tax and labor regulations. Certain business activities may require additional licenses or permits.
Is it necessary to have a local address or representative?
All corporations must have a registered agent and a registered office in Panama. The registered agent must be a Panamanian lawyer or law firm.
Are there requirements for financial reporting or audits?
Most private companies are not required to file audited financial statements unless they are regulated entities or engage in specific business activities. However, proper accounting and record-keeping are mandatory.
How does the territorial tax system work?
Under the territorial tax system, only income generated from business activities within Panama is taxed locally. Overseas income is generally not subject to Panamanian taxes.
What protection is available for intellectual property?
Intellectual property, including trademarks, patents, and copyrights, can be registered and protected under Panamanian law. Enforcement is generally robust, including legal remedies and court actions.
What is the process for resolving commercial disputes?
Commercial disputes are usually resolved through negotiation, mediation, or arbitration. If these fail, parties may seek judicial resolution in Panamanian courts.
Are there any restrictions on certain business activities?
Yes, certain sectors such as banking, insurance, mining, and telecommunications are regulated and may require special licenses, permits, or be subject to foreign ownership restrictions.
Additional Resources
If you need further information or assistance, the following resources may be useful:
- Public Registry of Panama - For company incorporation and corporate searches
- Superintendency of Banks - Regulation of the banking and finance sector
- Ministry of Commerce and Industries - Business permits, foreign investment, and intellectual property
- National Directorate of Intellectual Property
- Panama Bar Association - Professional body for legal practitioners
- Panama Chamber of Commerce, Industry and Agriculture
- Superintendency of Securities Market - Regulation of securities and investments
- General Directorate of Revenue - Tax administration and compliance
Next Steps
If you think you require legal advice in the field of Corporate & Commercial in Panama, consider the following steps:
- Identify your needs clearly - whether it’s business incorporation, contract review, licensing, dispute resolution, or another area.
- Gather all relevant documents such as identification, company records, and details of the transaction or issue.
- Contact a licensed Panamanian lawyer or a reputable law firm with experience in corporate and commercial law.
- Request an initial consultation to understand your options, timelines, and potential costs.
- Follow your lawyer’s advice meticulously and maintain proper records of communications and agreements.
Acting with promptness and transparency can help safeguard your interests and ensure compliance with Panamanian law. Legal professionals can provide tailored guidance to effectively structure, protect, and grow your business in Panama.
Lawzana helps you find the best lawyers and law firms in Panama through a curated and pre-screened list of qualified legal professionals. Our platform offers rankings and detailed profiles of attorneys and law firms, allowing you to compare based on practice areas, including Corporate & Commercial, experience, and client feedback.
Each profile includes a description of the firm's areas of practice, client reviews, team members and partners, year of establishment, spoken languages, office locations, contact information, social media presence, and any published articles or resources. Most firms on our platform speak English and are experienced in both local and international legal matters.
Get a quote from top-rated law firms in Panama - quickly, securely, and without unnecessary hassle.
Disclaimer:
The information provided on this page is for general informational purposes only and does not constitute legal advice. While we strive to ensure the accuracy and relevance of the content, legal information may change over time, and interpretations of the law can vary. You should always consult with a qualified legal professional for advice specific to your situation.
We disclaim all liability for actions taken or not taken based on the content of this page. If you believe any information is incorrect or outdated, please
contact us, and we will review and update it where appropriate.
