Starting a business in Panama
The prerequisites for conducting business and achieving optimal results often require finding solutions outside the home country.
Therefore, many entrepreneurs decide to launch a company in another country, or even on another continent. Hence, no one is surprised that companies often decide in favor of the relatively distant Central America, particularly Panama. Why is that? The reasons are at least several.
I. WHY PANAMA?
- The most strategic place in the world, both from the political, economic as well as commercial point of view.
- A transparent, robust, and comprehensive banking system which constitutes an international banking center, recognized by experts as the second largest worldwide, following only Switzerland.
- Stable economy, clear law, honest political and security system. Panama has no army – hence no coups. Panama's GDP has been growing by approx. 8% on average throughout the last decade. Forecasts by IMF predict that this growth will likely continue in the upcoming years.
- Free trade zone and economic zones with preferences that are hard to find anywhere else in the world. According to my assessment, Panama is the largest free trade zone worldwide.
- Preferences and tax exemptions for investors guaranteed by the government for a period of several dozens of years in areas such as tourism, energy, ecology, and others.
- Currency: in both banking and market circulation - the US dollar. The official currency of Panama is balboa (1PAB = 1USD), which does not occur in circulation (collector coins can be purchased at the National Bank of Panama)
- Taxes: ITMBS (vat) - food and articles for children 0%. Most products and services 7%. max. 10% on excise articles. Income tax: tax-exempt amount amounts to 11,000 USD. Proceeds obtained by Panama-based entities from outside of Panama are not subject to taxation.
II. MARKET
Although Panama (along with immigrants) accounts only for approx. 4.3 million of people, yet Latin America has 657 million of people of which over 450 million speak Spanish. Since 1960, the population growth in Latin America has been growing exponentially. In 2019, it will amount to more than 6.4 million. This - combined with the central location, the Panama Canal, free trade zones, well-organized logistics and the best airline communication in all of South America (also with Europe - 6 airline companies) proves that in today's economic and commercial reality this is the right place to do business!!! Notes for Polish manufacturers interested in export: Panama’s economy is mainly driven by the canal accompanied by the entire logistics, construction and tourism. Heavy industry is practically non-existent /and let it stay this way/. Strategic goods for construction, interior design, machinery, refrigeration equipment, articles for the food and clothing industry, interior furnishing -including furniture and household appliances - are imported from China at approx. 4 billion USD and the USA at approx. 3.75 billion USD. As for China, we can compete in terms of fast delivery and quality (only in some areas), as for the USA - in terms of prices. The market includes Polish sausages and Polish cucumbers - all made in the USA.
Establishing companies in Panama - what should you know?
For many foreign entrepreneurs, a commercial law company in Panama is a great opportunity to achieve success. In addition to the aforementioned advantages, a company in Panama must draw up simplified reports on its activities as well as board and shareholder meetings. This means that the business owner can manage his or her company from anywhere in the world, and the documents related to such activities are not publicly available. A company in Panama entails full freedom of action for members of the company and a plethora of benefits arising from Panama’s stable banking and tax systems.
What conditions must be met to set up a company in Panama?
Those who want to start a company in Panama should figure out the criteria that must be met in order to set up a company there. To open a company you will need a director, a secretary, a treasurer, adequate capital as well as a proper company name. Those who are interested in starting business in Panama, feel free to contact representatives of Omnibus Panama, who can provide you with accurate information. The case of every customer should be treated individually. Why is that? Procedures and costs associated with moving or setting up operations in Panama may vary, therefore it is important to consult a reliable consulting company.
