At first glance, Panama’s laws may seem hostile to you if you are starting a business. You may have come across lists of dozens of requirements, processes and so on. Today I will explain in a simple way the benefits you can enjoy as an entrepreneur or owner of a small or medium business.
By means of Law 186 of 2020 and Executive Decree 83 of 2021, the Entrepreneurship Companies are created and regulated in the Republic of Panama. This novel figure allows you to undertake in an easy way, giving legitimacy to your business and enjoying certain tax benefits. Unlike a Corporation, the process for the creation of a Business Corporation is very easy. To begin with, a Standard Statute must be drawn up in front of a notary. This document will describe the general information of the people who are part of the company and the commercial purpose of the company, among other things. Once drafted, it is submitted to the Single Window of the Authority of Micro, Small and Medium Enterprises (AMPYME) for registration.
The Entrepreneurship Companies have tax incentives such as exemption from the payment of flat rate and income tax for the first two years. This can be attractive because it allows you to focus on profits when starting the business.
If you opt for a business modality other than the Entrepreneurship Company, you can also enjoy tax incentives. Those who are registered in the AMPYME business registry enjoy an income tax exemption for the first two years.
On the other hand, the AMPYME has training and consulting programs for entrepreneurs on topics such as: beauty, tourism, business start-ups, business culture, among others. Additionally, this entity has a seed capital program in which the state helps the entrepreneur to obtain funds when the entrepreneur’s guarantees are not sufficient. In other words, the state acts as guarantor.
Entrepreneurship in Panama is becoming easier every day thanks to regulations that promote it and technological tools.
If you need personalized advice on your entrepreneurial venture, contact me.
