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Panama legal entity corporate secretarial compliance requirements


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Panama is experiencing unprecedented economic growth, showing consistent increases in GDP year on year. The country offers competitive visa, commercial, and residency incentives for foreign entrepreneurs, as well as special economic zones to spur further business activity.

When setting up a business in Panama, make sure you comply with all corporate regulations, and understand your obligations as a foreign company. This presentation gives a detailed outlook on social security, employment, and tax requirements you must adhere to in order to operate in the country.

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Panama legal entity corporate secretarial compliance requirements

  1. 1. Corporate Compliance For Legal Entities in Panama
  2. 2. Panama’s Compliance Requirements Regardless of their commercial activity, all legal entities located in Panama must comply with a series of obligations managed by various government entities. These obligations fall within the following categories: 1. Corporate obligations 2. Tax Compliance 3. Labor obligations 4. Social security
  3. 3. 1. Corporate Obligations The legal entity has to meet certain corporate obligations to ensure that it is compliant with local legal requirements. a) Annual renewal with the Public Registry. The payment will be done to the DGI (“Dirección General de Impuestos”) Deadline: Depends on when the company was constituted. Depending on that: January to June or July to December of the following year. b) Hold and maintain original company documents.
  4. 4. 2. Taxation Every legal entity in Panama has to meet tax obligations to ensure that it is compliant with the legal tax requirements of the National Tax Authority, DGI (Dirección General de Ingresos). Calculation, preparation and filing of tax declarations with the DGI is required on a monthly and annual basis. ITBMS – “Impuesto de Transferencia de Bienes Muebles y Servicios” (VAT - Value Added Tax) Income Tax – “Impuesto Sobre la Renta” Dividend Tax – 10% Tax on the distributed profits/dividends Municipal Tax – “Impuesto Municipal”
  5. 5. 3. Labor Obligations Every legal entity in Panama has to meet the following labor obligations: a) Vacations: Each worker is entitled to 30 days of paid vacation per year. b) 13th Salary: A bonus equal to 1 month of salary. This bonus is divided in 3 parts distributed on April 15, August 15 and December 15. Government Entity: The Ministry of Labour and Labour Development (Ministerio de Trabajo y Desarollo Laboral) monitors the companies so the labor obligations are met, but no reports are required
  6. 6. 4. Social Security The legal entity is required to meet Social Security obligations: • Health Contribution – To the CSS (Caja de Seguro Social) • Pension Contribution – To the CSS • Occupational Risk Insurance Contribution – To the CSS • Cesantias (Unemployment Contribution) – to the CSS
  7. 7. Schedule of Annual Corporate Requirements Requirement to be presented Frequency Date of Filing Government Agency Renewal with the Public Registry Annual Before the 31st of May DGI Hold & Maintain Original Company Documents Ongoing - - ITBMS Monthly Before the 15th of the following month DGI Income Tax Monthly Before the 31st of March of the following year DGI Dividend Tax Annual When dividends are distributed DGI Municipal Tax Monthly Depending on company’s activities and Local Tax Authority’s Tax Calendar Local Tax Authority Vacations - Depending on employee’s start date MTDL 13th Salary Annual April 15, August 15 and December 15 MTDL Health Contribution Monthly Reports before the 25th and contributions before the 30th of the following month. MTDL Pension Contribution Monthly MTDL Occupational Risk Insurance Contribution Monthly MTDL Unemployment Contriubution Monthly MTDL DGI = Dirección General de Ingresos (National Tax Authority) MTDL = Ministerio de Trabajo y Desarollo Laboral (Ministry of Labour and Labour Development )
  8. 8. Biz Latin Hub is a market leader in helping individuals and companies to successfully do business globally and has multilingual services that are reliable, tailored and responsive. Our group is owned and managed by an experienced team of local and expat professionals, dedicated to assisting our clients to navigate their way through the complexities of the global business environment. We can help!
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