Starting a Business in Panama – Procedure, Time and Cost

Takes place simultaneously with previous procedure.
No. Procedures Time to Complete Associated Costs
1 Hire a registered agent to prepare the articles of association
Agency : Law firm
It is necessary to hire a lawyer or law firm to serve as Registered Agent of the corporation and
prepare its Articles of Association.
1 day USD 250
2 Notarize the articles of incorporation
Agency : Public Notary
The articles of incorporation to be notarized must include:
(a) the name and domicile of each subscriber to the articles of incorporation;
(b) the domicile of the company and of the resident agent, who must be a lawyer or law firm in
(c) the names and addresses of the directors and the officers;
(d) the name of the corporation, set out in such a way to distinguish it from other registered names
already registered with the Public Register;
(e) the company purpose or general objectives;
(f) the name of at least the president, the secretary, and the treasurer, who may or may not be the
same as the directors and need not to be shareholders and who may hold more than one office or
(g) details about the capital and the type and number of shares into which it is divided;
(h) the company duration, which may be perpetual;
(i) any other provision the subscribers may wish to include;
(j) the amount of share that each shareholder will acquire.
1 day USD 75
3 Register at the Mercantile Division of the Public Registry and pay the Annual Franchise Tax
Agency : Mercantile Division of the Public Registry
The entry fees are the following (since July 2013):
- USD 50.00 for the first USD 10,000.00 in capital stock
- 0.75 cents for each additional 1,000.00 or fraction.
The Annual Registration Tax of USD 300 must also be paid. Payments can be made at the
National Bank of Panama or at any cashier of the Ministry of Economy and Finance. The National
Bank of Panama has a booth at the Public Registry. This payment also can be done online.
2 days see comments
4 Obtain a notice of operations (“aviso de operación”) through the “Panama Emprende”
Agency : Ministry of Trade & Industry
A notice of operations must be obtained. Law 5 of January 11, 2007 established a new on-line
system called “Panama Emprende” (www.panamaemprende.gob.pa) which facilitates the creation
of companies. The new system replaces the obtainment of commercial licenses for the obtainment
of a notice of operation.
In addition, since April 24th 2012, the Ministry of Trade and Industry and the municipality of
Panama are interconnected through the online platform Panama Emprende. As a result, it is no
longer required to visit the municipality to obtain a taxpayer number. Now entrepreneurs receive
automatically the municipal taxpayer number together with the operation permit through Panama
1 day USD 55 for legal entities
5 Request an employers’ inscription number and register employees at the Social Security
Agency : Social Security Institute
Employers and employees must be registered with Social Security. The Social Security Institute
takes care of the registration of employees in order to report salaries and make the payments
related to welfare programs and educational taxes as well as income taxes. It manages as well
insurance programs for pension, health, unemployment and and occupational accident and injury.
1 day no charge
Doing Business 2020 Panama
Page 8
Dealing with Construction Permits
This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required notifications,
requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building
quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional
certification requirements. The most recent round of data collection was completed in May 2019. See the methodology for more information
What the indicators measure
Procedures to legally build a warehouse (number)
Submitting all relevant documents and obtaining all necessary
clearances, licenses, permits and certificates

Submitting all required notifications and receiving all necessary

• Obtaining utility connections for water and sewerage
• Registering and selling the warehouse after its completion
Time required to complete each procedure (calendar days)
• Does not include time spent gathering information
Each procedure starts on a separate day—though procedures
that can be fully completed online are an exception to this rule

Procedure is considered completed once final document is

• No prior contact with officials
Cost required to complete each procedure (% of income per
• Official costs only, no bribes
Building quality control index (0-15)
• Quality of building regulations (0-2)
• Quality control before construction (0-1)
• Quality control during construction (0-3)
• Quality control after construction (0-3)
• Liability and insurance regimes (0-2)
• Professional certifications (0-4)
Case study assumptions
To make the data comparable across economies, several assumptions about the construction
company, the warehouse project and the utility connections are used.
The construction company (BuildCo):
- Is a limited liability company (or its legal equivalent) and operates in the economy’s largest
business city. For 11 economies the data are also collected for the second largest business city.
- Is 100% domestically and privately owned; has five owners, none of whom is a legal entity. Has a
licensed architect and a licensed engineer, both registered with the local association of architects
or engineers. BuildCo is not assumed to have any other employees who are technical or licensed
experts, such as geological or topographical experts.
- Owns the land on which the warehouse will be built and will sell the warehouse upon its
The warehouse:
- Will be used for general storage activities, such as storage of books or stationery.
- Will have two stories, both above ground, with a total constructed area of approximately 1,300.6
square meters (14,000 square feet). Each floor will be 3 meters (9 feet, 10 inches) high and will be
located on a land plot of approximately 929 square meters (10,000 square feet) that is 100%
owned by BuildCo, and the warehouse is valued at 50 times income per capita.
- Will have complete architectural and technical plans prepared by a licensed architect. If
preparation of the plans requires such steps as obtaining further documentation or getting prior
approvals from external agencies, these are counted as procedures.
- Will take 30 weeks to construct (excluding all delays due to administrative and regulatory
The water and sewerage connections:
- Will be 150 meters (492 feet) from the existing water source and sewer tap. If there is no water
delivery infrastructure in the economy, a borehole will be dug. If there is no sewerage
infrastructure, a septic tank in the smallest size available will be installed or built.
- Will have an average water use of 662 liters (175 gallons) a day and an average wastewater flow
of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and
a peak wastewater flow of 1,136 liters (300 gallons) a day.
- Will have a constant level of water demand and wastewater flow throughout the year; will be 1
inch in diameter for the water connection and 4 inches in diameter for the sewerage connection.

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