{"id":137768,"date":"2026-04-07T12:07:11","date_gmt":"2026-04-07T12:07:11","guid":{"rendered":"https:\/\/my.legal500.com\/guides\/?post_type=comparative_guide&#038;p=137768"},"modified":"2026-04-07T12:07:11","modified_gmt":"2026-04-07T12:07:11","slug":"panama-doing-business-in","status":"publish","type":"comparative_guide","link":"https:\/\/my.legal500.com\/guides\/chapter\/panama-doing-business-in\/","title":{"rendered":"Panama: Doing Business In"},"content":{"rendered":"","protected":false},"template":"","class_list":["post-137768","comparative_guide","type-comparative_guide","status-publish","hentry","guides-doing-business-in","jurisdictions-panama"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Deloitte Legal S.C.<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2021\/08\/Deloitte-Legal-Logo.jpg\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Deloitte Legal S.C.<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2021\/08\/Deloitte-Legal-Logo.jpg\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of Doing Business In laws and regulations applicable in Panama<\/span><div class=\"guide-content\"><div class=\"filter\">\r\n\r\n\t\t\t\t<input type=\"text\" placeholder=\"Search questions and answers...\" class=\"filter-container__search-field\">\r\n\t\t\t<\/div>\r\n\r\n\t\t\t\r\n\r\n\r\n\t\t\t<ol class=\"custom-counter\">\r\n\r\n\t\t\t\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is the system of law in your jurisdiction based on civil law, common law or something else?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The legal system of the Republic of Panama is primarily based on civil law tradition, characterised by its reliance on codified laws, structured legal frameworks, and the application of general principles enshrined in statute law.<\/p>\n<p>Although it is predominantly a civil law jurisdiction, it has incorporated elements of common law practices, particularly in the maritime, banking, and financial sectors.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the different types of vehicle \/ legal forms through which people carry on business in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In the Republic of Panama, individuals and legal entities may engage in business activities through various legal vehicles, each governed by specific legislative provisions. The selection of an appropriate business structure depends on factors such as liability, tax treatment, governance, and regulatory requirements.<\/p>\n<p>The principal forms of entities are as follows:<\/p>\n<ol>\n<li>Corporation (Sociedad Anonima), regulated by Law 32 of 1927.<\/li>\n<li>Limited Liability Company (Sociedad de Responsabilidad Limitada), regulated by Law 4 of 2009.<\/li>\n<li>General Partnership (Sociedad Colectiva), regulated by articles 251-265 of the Commercial Code of Panama.<\/li>\n<li>Private Interest Foundation (Fundacion de Interes Privado), regulated by Law 25 of 1995 on Private Interest Foundations.<\/li>\n<\/ol>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can non-domestic entities carry on business directly in your jurisdiction, i.e., without having to incorporate or register an entity?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>For a non-domestic entity to carry on business activities, it must establish a branch in Panama by registering before the Public Registry of Panama and designate a resident agent (lawyer or law firm). The branch is not a separate legal entity, and the non-domestic entity remains fully liable for its obligations. This vehicle is commonly used by multinational corporations seeking a physical presence in Panama.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any capital requirements to consider when establishing different entity types?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Panamanian law generally does not impose strict minimum capital requirements for most business entities. However, certain legal structures and regulated industries have specific capitalisation requirements that must be considered when incorporating a business.<\/p>\n<p>The standard practice for corporations is to establish a nominal capital of ten thousand American dollars (USD10,000.00), although there is no legal requirement.<\/p>\n<p>In regulated industries (e.g. banking, insurance, securities), corporations must meet specific capitalisation requirements as imposed by regulatory authorities.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How are the different types of vehicle established in your jurisdiction? And which is the most common entity \/ branch for investors to utilise?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><ol>\n<li>Corporation requires at least two (2) incorporators at the time of formation but may later have a single shareholder.<\/li>\n<li>Limited Liability Company requires a minimum of two (2) and a maximum of fifty (50) partners.<\/li>\n<li>Private Interest Foundation requires a Founder and a Council. This vehicle, although not entitled to perform commercial activities, is widely used for estate planning, asset protection, and wealth management.<\/li>\n<\/ol>\n<p>Corporations are the most commonly used structure in Panama, due to its flexibility, limited liability, and confidentiality of ownership. It allows foreign ownership and may be used for commercial, investment, or holding purposes.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How is the entity operated and managed, i.e., directors, officers or others? And how do they make decisions?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The management of a corporation involves the following key corporate bodies:<\/p>\n<p><strong>Shareholders:<\/strong> They are the ultimate owners of the corporation, and exercise control through the General Shareholders\u2019 Meetings. This body approves major corporate decisions, such as amendments to the articles of incorporation, mergers and liquidation, for example.<\/p>\n<p><strong>Board of Directors:<\/strong> The board is the governing body responsible for the management and administration of the corporation, acting through resolutions. Some powers of the board of directors are establishing corporate policies and strategies, appointing and supervising officers, approving financial statements, recommending dividends and managing budget.<\/p>\n<p><strong>Officers:<\/strong> Responsible for the execution and administration of corporate affairs as directed by the Board of Directors. They manage the day-to-day operations of the company, ensuring compliance with government and regulatory requirements.<\/p>\n<p><strong>Legal Representative:<\/strong> The President is typically the legal representative of the corporation, unless another officer is expressly designated in the articles of incorporation or bylaws.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there general requirements or restrictions relating to the appointment of (a) authorised representatives \/ directors or (b) shareholders, such as a requirement for a certain number, or local residency or nationality?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There are no restrictions on residence or nationality imposed on shareholders, directors, officers or legal representatives.<\/p>\n<p>A minimum of three (3) directors are required, but there is no maximum limit. Directors may be individuals or legal entities.<\/p>\n<p>Panamanian law requires the appointment of at least three (3) officers, namely the President, Secretary and Treasurer. The same individual may hold multiple positions, except for the roles of President and Secretary, which must be held by different persons. Officers do not necessarily have to be shareholders or directors.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Apart from the creation of an entity or establishment, what other possibilities are there for expanding business operations in your jurisdiction? Can one work with trade \/commercial agents, resellers and are there any specific rules to be observed?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Apart from registering a corporation in the Panamanian jurisdiction, businesses seeking to expand operations in Panama may utilise alternative commercial arrangements, including trade and commercial agents, distributors, resellers, joint ventures, franchise agreements, foreign branches, employment of independent contractors, e-commerce and digital business expansion, amongst others. Each structure has specific legal and regulatory considerations, particularly under the Commercial Code of the Republic of Panama, and special laws regulating agency and distribution agreements.<\/p>\n<p>Each business model requires careful legal structuring, contractual protections, and regulatory compliance. Panama\u00b4s business-friendly legal framework offers multiple avenues for expansion with minimal restrictions, making it an attractive jurisdiction for foreign and domestic business.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any corporate governance codes or equivalent for privately owned companies or groups of companies? If so, please provide a summary of the main provisions and how they apply.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Unlike publicly traded companies, privately owned companies do not have a specific corporate governance code imposed by law.<\/p>\n<p>However, these companies can establish their own governance frameworks through their articles of incorporation, and bylaws. Many of them choose to adopt corporate governance practices to enhance transparency and accountability, such as establishing support committees (audit, risk management), implementing codes of conduct (guidelines for directors, officers), and enhancing disclosure practices (voluntary providing financial and operational information to shareholders to build trust and facilitate informed decision-making).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the options available when looking to provide the entity with working capital? i.e., capital injection, loans etc.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The selection of a funding option depends on the corporate structure, tax implications, and other financial needs of the entity.<\/p>\n<p>The most common option is equity financing, which can be performed through (a) capital injection by means of additional capital contributions by shareholders, (b) capital increase by means of issuance of new shares, and (c) convertible debt to equity by means of convertible notes, for example.<\/p>\n<p>On the other hand, debt financing is widely implemented by means of shareholder loans, corporate financing from financial institutions, third-party loans (private lenders and investors), credit lines and factoring, amongst others.<\/p>\n<p>Finally, hybrid financial structures are also considered such as the issuance of preferred shares (fixed dividend rights or liquidation preferences), bonds, and corporate notes.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the processes for returning proceeds from entities? i.e., dividends, returns of capital, loans etc.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In Panama, entities can return proceeds to shareholders, investors, or lenders through various legal mechanisms, including dividends, capital returns, loan payments and other distributions. The choice of method depends on corporate structure, tax implications and financial planning considerations. These processes are governed by Law 32 of 1927 on Corporations, the Commercial Code of the Republic of Panama, and tax regulations, namely:<\/p>\n<p><strong>1. Dividends:<\/strong> (a) The board of directors approves dividend distributions based on available profits, (b) shareholders\u2019 approval, if required, (c) payment of tax dividend (withholding tax applies: 10% for local-source income, 5% for foreign-source or export-related income, and no withholding for companies under certain special regimes, for example multinational headquarters SEM), and (d) distribution to shareholders (paid in cash, stock, or other assets as determined by the board of directors).<\/p>\n<p><strong>2. Return of Capital (capital reduction):<\/strong> (a) Shareholders\u2019 meeting approval, (b) amendments to articles of incorporation, (c) payment of shareholders in proportion to their ownership, and (d) tax considerations.<\/p>\n<p><strong>3. Loan Repayment to Shareholders or Investors:<\/strong> (a) Execution of Loan Agreement, (b) board of directors\u2019 approval for repayment, (c) loan repayment (principal and interest), and (d) tax treatment (interest payments may be deductible for tax purposes; if the loan is interest-free, it may be reclassified as a capital contribution).<\/p>\n<p><strong>4. Share Buybacks:<\/strong> (a) Board of directors\u2019 approval, (b) shareholder consent, if required, (c) payment for repurchased shares (either at par value or a premium), and (d) tax treatment (if shares are repurchased at a premium, the difference may be taxed as a capital gain for the selling shareholder).<\/p>\n<p><strong>5. Distribution of Assets In-Kind (non-cash distribution):<\/strong> (a) Board of directors\u2019 approval of which assets are to be distributed, (b) asset valuation (properly valued to avoid disputes and tax issues), and (c) tax considerations (may trigger capital gains taxation if the value has appreciated).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are specific voting requirements \/ percentages required for specific decisions?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>All decisions of the board of directors and the shareholders assembly require at least a simple majority (50% + 1 of voting shares present) unless another percentage is established in the articles of incorporation or the bylaws, as they may set higher voting thresholds than the law requires.<\/p>\n<p>On the other hand, companies listed on the Panama Stock Exchange (BVP) must comply with securities regulations and corporate governance codes, which may impose stricter voting rules.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are shareholders authorised to issue binding instructions to the management? Are these rules the same for all entities? What are the consequences and limitations?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In corporations, shareholders do not have the authority to issue binding day-to-day orders to the directors or officers on how to run the company\u2019s business. These powers lie with the board of directors unless the law or the company\u2019s articles of incorporation or bylaws give a specific decision to the shareholders. Any shareholder directions to management must therefore be channeled through proper corporate governance mechanisms, not by direct order.<\/p>\n<p>On the other hand, members of a limited liability company enjoy a more hands-on role in governance compared to shareholders of a corporation. While corporations\u2019 separate ownership and management to an extent, a limited liability company\u2019s structure is closer to a partnership, giving members greater ability to influence management decisions. They are usually managed by one or more appointed Administrator(s), which have similar functions to a board running the daily business.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the core employment law protection rules in your country (e.g., discrimination, minimum wage, dismissal etc.)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Panama has a structured labour system that provides various protections for employees, including rules on discrimination, minimum wage, dismissal, working hours, annual leave benefits, and social security contributions. Below is a summary of key employment protections, namely:<\/p>\n<p><strong>1. Discrimination Protections:<\/strong> Employers cannot discriminate based on race, sex, age, religion, disability, nationality, political opinion, or social status.<\/p>\n<p><strong>2. Minimum Wage Requirements:<\/strong> Panama does not have a single national minimum wage as they vary by region and economic sector. The same are set by government decree every two (2) years.<\/p>\n<p><strong>3. Dismissal Protections:<\/strong> Panama has strong employee protections against unjust dismissal. Severance pay is required unless termination is justified. The same is based on years of service and employees dismissed without cause receive three-point four (3.4) weeks\u2019 salary per year of service.<\/p>\n<p><strong>4. Working Hours and Overtime:<\/strong> The standard working hours are eight (8) hours per day \/ forty-eight (48) hours per week.<\/p>\n<p>Overtime compensation is as follows:<\/p>\n<p>25% extra for overtime during the day.<br \/>\n50% extra for overtime at night (after 6:00 PM).<br \/>\n75% extra for overtime on Sundays or public holidays.<\/p>\n<p>Maternity and Paternity Leave: Women are entitled to paid maternity leave of fourteen (14) weeks (6 weeks before and 8 weeks after childbirth). Maternity benefits are paid through social security and the employer.<\/p>\n<p>On the other hand, fathers are entitled to three (3) days of paid paternity leave after the birth of a child.<\/p>\n<p>Vacation and Sick Leave: Employees are entitled to thirty (30) calendar days of paid vacation per year. Employers must grant vacation within the first eleven (11) months after earning it.<\/p>\n<p>Employees are also entitled to paid sick leave, which may be paid by the social security fund after the third day. Employers must keep the employee\u00b4s position open during medical leave.<\/p>\n<p>Social Security and Employee Benefits: Employers must contribute 13.25% of an employee\u2019s salary to the Social Security Fund (a rate that will increase to 14.25% on 1 March 2027 and to 15.25% on 1 March 2029), while the employer contribute 9.75% of their salary. These contributions cover (a) healthcare benefits, (b) retirement pension, (c) maternity and disability benefits, and (d) workplace accident insurance.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">On what basis can an employee be dismissed in your country, what process must be followed and what are the associated costs? Does this differ for collective dismissals and if so, how?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The Labour Code of the Republic of Panama establishes specific grounds, procedures, and associated costs for both individual and collective dismissals.<\/p>\n<p>Grounds for individual dismissals can be divided into (a) Justified Causes, such as serious misconduct, repeated negligence, dishonesty, and (b) Unjustified Causes.<\/p>\n<p>The Procedure for individual dismissal is (a) written notification (detailing the specific reasons for termination), (b) documentation (maintain records of any incident or performance issues leading to the dismissal to support the decision if contested), and (c) final payment (settle any owed wages, accrued vacation, and other benefits promptly).<\/p>\n<p>Its associated costs are (a) severance payment (3.4 weeks of salary per year of service for unjustified dismissals), (b) payment in lieu of notice (equivalent to 30 days\u2019 salary if the notice period isn\u2019t provided), and (c) seniority premium (and an additional payment of one week\u2019s salary for each year of service).<\/p>\n<p>On the other hand, collective dismissals, often due to economic reasons, are subject to stricter regulations: (a) authorisations (employers must obtain prior approval from the Ministry of Labour to proceed, which involves demonstrating genuine economic, technological, or structural reasons necessitating the layoffs), (b) criteria for selection which prioritises termination of employees with less seniority, of foreign workers before Panamanian nationals, of non-unionised before unionised employees, and protection of employees with special protections such as maternity.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does your jurisdiction have a system of employee representation \/ participation (e.g., works councils, co-determined supervisory boards, trade unions etc.)? Are there entities which are exempt from the corresponding regulations?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In Panama, employee representation is primarily facilitated through labour unions and company committees. The Labour Code provides the legal framework for these entities, ensuring workers\u2019 rights to organize and participate in labour-related matters.<\/p>\n<p>Panamanian workers have the right to form and join labour unions to protect their collective interest.<\/p>\n<p>In addition to labour unions, the Labour Code mandates the establishment of Company Committees in enterprises with more than 20 employees. These committees serve as a platform for workers to engage with management on workplace issues, promoting cooperative dialogue.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a system governing anti-bribery or anti-corruption or similar? Does this system extend to nondomestic constellations, i.e., have extraterritorial reach?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Panama has established a comprehensive legal framework to combat bribery and corruption, primarily through its Criminal Code and related legislation. However, this framework does not extend to extraterritorial actions; it is confined to offenses committed within the Panama jurisdiction. However, a provision in the Criminal Code asserts jurisdiction over certain crimes committed abroad, such as those against humanity, public health, and the national economy.<\/p>\n<p>Another important regulation is Law 6 of 2022 which promotes transparency in public administration and establishes provisions for public access to information, aiming to prevent corrupt practices, and Law 33 of 2013 which creates the National Authority for Transparency and Access to Information, reinforcing mechanisms to combat corruption and enhance transparency within governmental operations.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What, if any, are the laws relating to economic crime? If such laws exist, is there an obligation to report economic crimes to the relevant authorities?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Panama has established a comprehensive legal framework to combat economic crimes, encompassing offenses such as financial misconduct, tax evasion, and money laundering. These regulations are primarily enshrined in the Criminal Code and supplemented by specific legislative measures, some of which are listed below:<br \/>\nFinancial Crimes: Law 45 of 2003 details some offences such as unlawful possession, use, or transfer of financial resources; destruction or falsification of financial records; unauthorised financial activities; and the disclosure of confidential information.<\/p>\n<p>Tax Evasion: Law 70 of 2019 criminalises tax evasion, stipulating that intentional acts to defraud the National Treasury, including the use of false documentation or failure to issue legal invoices.<\/p>\n<p>In addition, Panamanian law mandates certain entities to report suspicious activities related to economic crimes, such as (a) Financial Institutions (obliged to implement anti-money laundering measures and report suspicious transactions to the Financial Analyst Unit (UAF)), and (b) Non-Financial Reporting Entities (for example, entities like casinos, real estate agencies, and companies in free zones are required to designate a liaison responsible for reporting to the UAF).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How is money laundering and terrorist financing regulated in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Law 23 of 2015 introduces measures for the prevention of money laundering, terrorist financing, and the proliferation of weapons of mass destruction. It mandates due diligence procedures, the identification of beneficial owners, and the reporting of suspicious activities by financial institutions and designated non-financial businesses and professions.<\/p>\n<p>Panama\u00b4s Financial Analysis Unit (UAF), is responsible for receiving, analysing, and disseminating reports of suspicious financial activities to appropriate authorities.<\/p>\n<p>Also, the Superintendence of Banks of Panama, oversees compliance with anti-money laundering and counter-terrorist regulations within the banking sector.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there rules regulating compliance in the supply chain (for example comparable to the UK Modern Slavery Act, the Dutch wet kinderarbeid, the French loi de vigilance)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Panama does not currently have specific legislation akin to the UK\u00b4s Modern Slavery Act, or France\u00b4s Loi de Vigilance, which mandate comprehensive supply chain due diligence to prevent human rights abuses and environmental harm. However, the country enforces strict domestic laws concerning labour rights and environmental protection.<\/p>\n<p>Major construction projects, for instance, are required to conduct environmental assessments, ensure workers protection, and comply with governmental standards for environmental stewardship.<\/p>\n<p>Additionally, Panama encourages adherence to the international guidelines, such as OECD\u00b4s guidelines.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Please describe the requirements to prepare, audit, approve and disclose annual accounts \/ annual financial statements in your jurisdiction.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In Panama, the preparation, approval, and disclosure of annual financial statements depend primarily on corporate law, accounting standards, and sector-specific regulatory requirements.<\/p>\n<p>Preparation of financial statements:<\/p>\n<p>Companies incorporated in Panama are generally required to maintain accounting records that reflect their financial position and business operations. The obligation to keep accounting records is established under the Panamanian Code of Commerce, which requires merchants to maintain proper accounting books and documentation supporting their transactions.<\/p>\n<p>Panamanian companies typically prepare annual financial statements in accordance with internationally recognized accounting standards, most commonly International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board. Certain regulated sectors may apply specific accounting frameworks required by the relevant supervisory authority.<\/p>\n<p>Audit requirements:<\/p>\n<p>There is no universal statutory requirement for all Panamanian companies to have their financial statements audited. However, an external audit may be required in several situations, including:<\/p>\n<p>\u2022 when the company operates in a regulated sector (e.g., banking, insurance, securities, or financial services);<\/p>\n<p>\u2022 when the company is subject to supervision by authorities such as the Superintendence of Banks of Panama or the Superintendence of the Securities Market of Panama;<\/p>\n<p>\u2022 when required by shareholders, lenders, or contractual arrangements; or<\/p>\n<p>\u2022 when the company must provide audited financial statements for regulatory or compliance purposes.<\/p>\n<p>Where required, the audit must generally be performed by an independent Certified Public Accountant (CPA) licensed in Panama.<\/p>\n<p>Approval of financial statements:<\/p>\n<p>Financial statements are typically approved by the company\u2019s governing bodies. In practice:<\/p>\n<p>\u2022 management prepares the financial statements; and<\/p>\n<p>\u2022 shareholders approve them at a shareholders\u2019 meeting, usually the annual general meeting, if required by the company\u2019s corporate governance rules or bylaws.<\/p>\n<p>Disclosure and filing obligations:<\/p>\n<p>Unlike many other jurisdictions, Panama does not generally require private companies to publicly file their financial statements with a public registry.<\/p>\n<p>However, disclosure may be required in certain circumstances, including:<\/p>\n<p>\u2022 when the entity is regulated by a financial supervisory authority,<\/p>\n<p>\u2022 when the company is publicly listed, or<\/p>\n<p>\u2022 when financial statements must be provided to regulators, financial institutions, or counterparties.<\/p>\n<p>In addition, companies must maintain accounting records and supporting documentation that can be made available to the tax authorities if requested by the Panama Tax Authority.<\/p>\n<p>Additionally, to comply with the standards and recommendations of international organisations such as the OECD and the Financial Action Task Force (FATF), Panama has been introducing a series of changes to its legal and regulatory framework to enhance its ability to effectively respond to information requests for tax or regulatory purposes. Changes have been introduced gradually, with the latest being implemented between 2020 and 2022. The type of legislation that has been enacted to fulfil these purposes includes the following:<\/p>\n<p>\u2022 The implementation of a custodial regime for bearer shares, under which authorised custodians are required to keep identity information on the owners of bearer shares issued by Panamanian corporations;<\/p>\n<p>\u2022 Revised anti-money laundering (AML) regulations, under which attorneys acting as registered agents are required to hold detailed records about their clients, including records about final beneficiaries. Based on the relevant regulations, attorneys must corroborate the activities reported by their clients and regularly examine their validity, among other information and verifications that they must conduct;<\/p>\n<p>\u2022 The introduction of new accounting requirements. For safekeeping purposes, accounting records and supporting documentation of companies that do not conduct business operations within Panama, including legal entities that only act as investment vehicles, must be provided to the entity\u2019s Panamanian resident agent within four months following the end of each fiscal year. In the event of the dissolution of a Panama registered entity, accounting records and supporting documentation for the last five years prior to the dissolution must be provided to the agent. No later than 30 April of each year, the resident agent must receive the originals or copies of the accounting records of the immediately preceding fiscal year (for calendar-year companies). Failure to provide accounting records and supporting documentation (either in original and\/or copy) to the attorney acting as registered agent is subject to the following:<\/p>\n<ul>\n<li>The submission of a non-compliance report to the office of the Superintendence of Non-Financial Subjects;<\/li>\n<li>The compulsory resignation of the attorney acting as resident agent of the non-compliant company;<\/li>\n<li>The suspension of the legal entity\u2019s corporate rights;<\/li>\n<li>The inability to register any document in the Public Registry and to obtain certificates issued by the Registry;<\/li>\n<li>The compulsory administrative liquidation of the legal entity; and<\/li>\n<li>The imposition of non-compliance fines ranging from USD 5,000 to USD 1 million, depending on the seriousness of the offense and the number of prior offences;<\/li>\n<\/ul>\n<p>\u2022 The obligation for Panamanian registered agents to keep updated records of the shareholders and\/or beneficial owners of legal entities in which they act as such, with the responsibility of reporting and updating this information on the national system for the registration of beneficial owners adopted by the Superintendence of Non-Financial Subjects. Failure to comply with this obligation is subject to sanctions for both the entity and the resident agent; and<\/p>\n<p>\u2022 The suspension of the legal entity\u2019s corporate rights if it fails to pay the annual incorporation fees for three consecutive years or fails to comply with the obligations to report beneficial owners or send accounting information. The effect of this suspension means that no act, document, and\/or agreement may be registered in the Panama Public Registry, nor may certifications be issued, except those ordered by a competent authority or requested by third parties in order to assert their rights.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Please detail any corporate \/ company secretarial annual compliance requirements?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Kindly refer to the above question (21).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a requirement for annual meetings of shareholders, or other stakeholders, to be held? If so, what matters need to be considered and approved at the annual shareholder meeting?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Panamanian law does not mandate corporations to hold an Annual General Meeting. However, convening this annual meeting is considered a good corporate governance practice.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any reporting \/ notification \/ disclosure requirements on beneficial ownership \/ ultimate beneficial owners (UBO) of entities? If yes, please briefly describe these requirements.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Kindly refer to question 21.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What main taxes are businesses subject to in your jurisdiction, and on what are they levied (usually profits), and at what rate?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In Panama, businesses are subject to several key taxes, primarily levied on income, consumption, and specific financial transactions. Below is a summary of the main taxes applicable to businesses:<\/p>\n<p>Corporate Income Taxation: Businesses are taxed at a flat 25% on their net taxable income.<\/p>\n<p>In addition, corporations with taxable income exceeding USD 1,500,000 are subject to an alternative minimum tax regime known as CAIR, calculated at 4.67% of gross income. Entities must pay the higher amount between the traditional 25% income tax and the CAIR computation. Companies may request the non application of CAIR when operating at a loss or when the CAIR based effective tax rate exceeds the statutory 25%.<\/p>\n<p>Movable Goods and Services Transfer Tax (ITBMS): A value added tax (ITBMS) of 7% applies to the sale of goods and services. Certain items are taxed at increased rates, for example 10% for alcoholic beverages and hotel accommodations, and 15% for tobacco.<\/p>\n<p>Dividend Tax: A 10% withholding tax is applied to dividends distributed from domestic profits. Dividends paid on bearer shares are subject to a 20% withholding tax. A reduced rate of 5% applies to dividends from foreign-source income or export profits.<\/p>\n<p>Capital Gain Tax: Capital gains derived from the transfer of real estate or securities are generally subject to a 10% tax on the net gain. For real estate transactions, the purchaser must withhold 3% of the higher of the sale price or the cadastral value (administrative property value) as an advance payment of income tax. This 3% may be treated by the seller as a definitive tax, without performing any additional gain calculation. Alternatively, the seller may opt to calculate the actual capital gain at the 10% rate and apply it against the advance payment.<br \/>\nFor the transfer of securities, a 5% withholding tax is applied on the gross amount. The seller may either accept this withholding as final or compute the capital gain and apply the 10% rate with the corresponding credit.<\/p>\n<p>In both cases, if the capital gains tax calculated at the 10% rate is lower than the amount withheld, the seller may request a refund of the excess.<\/p>\n<p>Withholding Taxes on Payments to Non Residents: Payments to non resident individuals or entities are generally subject to withholding tax when (1) the payment is related to Panamanian source taxable income, and (2) the expense is deductible for Panamanian income tax purposes.<\/p>\n<p>As a rule, withholding does not apply if the payer treats the expense as non deductible or if the underlying income is exempt or constitutes foreign source income.<\/p>\n<p>However, this exception does not apply to payments made by government entities, companies owned 51% or more by the Panamanian government, non contributing entities (such as non profit organizations), or taxpayers operating at a loss.<\/p>\n<p>The withholding tax rate applicable to payments to non resident legal entities is 25%, applied to 50% of the amount remitted or recorded, whichever occurs first. Reduced withholding rates may apply under Panama\u2019s 16 double tax treaties (e.g., Mexico, Spain, Luxembourg, Singapore, France, South Korea, the Netherlands, Ireland, Israel, Italy, the United Arab Emirates, the United Kingdom, Portugal, the Czech Republic, Qatar, and Barbados).<\/p>\n<p>Notice of Operation Tax (Commercial License Tax): An annual tax of 2% on the company\u2019s gross income, capped at USD 60,000, applies to businesses operating under the general regime.<\/p>\n<p>However, companies established in the Col\u00f3n Free Trade Zone (ZLC) or in any other free zone or special economic area that does not require a Notice of Operation are subject to a reduced rate of 0.5% on their net assets, with a minimum of USD 100 and a maximum of USD 50,000.<\/p>\n<p>Social Security Contributions: Employers must contribute 13.25% of an employee\u00b4s salary to the Social Security Fund (a rate that will increase to 14.25% on 1 March 2027 and to 15.25% on 1 March 2029)<\/p>\n<p>Educational Insurance Tax: Employers must contribute 1.5% of each employee\u00b4s salary to educational tax.<\/p>\n<p>Municipal Tax: Local governments may impose taxes or fees on businesses operating within their jurisdiction.<\/p>\n<p>Stamp Tax: certain legal and commercial documents may be subject to a stamp tax, depending on the nature of the document and transaction.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any particular incentive regimes that make your jurisdiction attractive to businesses from a tax perspective (e.g. tax holidays, incentive regimes, employee schemes, or other?)<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Panama offers a robust ecosystem of special economic regimes designed to attract foreign investment, promote regional headquarters, enable nearshoring and logistics operations, and support high value manufacturing and service activities. These incentive frameworks combine preferential tax treatment, streamlined administrative processes, and flexible labour and immigration rules. The most relevant regimes for foreign investors include the following:<\/p>\n<p><strong>1. Panama Pacifico Special Economic Area<\/strong><\/p>\n<p>The Panama Pacifico Special Economic Area is one of the country\u2019s flagship development zones, offering an integrated legal, tax, labour, immigration, and customs framework tailored to companies operating in logistics, aviation, high tech manufacturing, global services, and export oriented operations.<\/p>\n<p>Key Incentives:<\/p>\n<ul>\n<li>Broad exemptions from direct and indirect taxes for qualifying activities, including import duties, VAT\/ITBMS on export services, stamp tax, real estate tax on industrial\/commercial improvements, and taxes on the transfer of real estate.<\/li>\n<li>Customs and logistics advantages, including simplified procedures, inventory control based customs supervision, and on site government offices (\u201cOne Stop Shop\u201d) covering all required permits.<\/li>\n<li>Flexible immigration and labour rules, allowing companies to hire specialised foreign talent beyond the general labour law percentage caps when paired with skills transfer commitments.<\/li>\n<li>Legal stability guarantees for ten years following registration in the regime.<\/li>\n<\/ul>\n<p>This regime is particularly attractive for companies with regional logistics operations, aircraft service activities, high tech manufacturing, digital service centres, and global operational support hubs.<\/p>\n<p><strong>2. Col\u00f3n Free Trade Zone (ZLC)<\/strong><\/p>\n<p>The Col\u00f3n Free Trade Zone is the largest free zone in the Western Hemisphere and serves as a regional platform for re export, distribution, value added processing, and nearshoring activities.<\/p>\n<p>Key Incentives:<\/p>\n<ul>\n<li>Exemption from income tax on revenues generated from foreign operations (exports or re exports).<\/li>\n<li>Exemptions from ITBMS\/VAT on transfers of goods and on services rendered within the Zone to foreign or local companies.<\/li>\n<li>Exemption from property tax on commercial and industrial improvements and exemption from transfer tax for real estate located in the Zone.<\/li>\n<li>Updated framework expanding permitted activities, such as high tech manufacturing, aviation related services, data\/ICT services, scientific research, film industry services, and nearshoring oriented processes (assembly, repackaging, labelling, transformation).<\/li>\n<li>Temporary exemption from the Notice of Operation Tax for companies meeting eligibility criteria.<\/li>\n<li>Substance requirements for certain activities (e.g., logistics, ICT, supply chain management), ensuring that key functions and employees are genuinely located in the Zone.<\/li>\n<\/ul>\n<p>These features continue to position the ZLC as a strategic location for companies seeking a regional distribution hub with access to major maritime and air routes.<\/p>\n<p><strong>3. Multinational Headquarters Regime (SEM)<\/strong><\/p>\n<p>The SEM regime is designed for multinational groups seeking to centralise corporate, operational, administrative, financial, and technical functions in Panama.<\/p>\n<p>Key Incentives:<\/p>\n<ul>\n<li>5% corporate income tax on net taxable income from qualifying intra group services.<\/li>\n<li>Exemption from dividend tax, complementary tax, and branch tax, regardless of whether the income would otherwise be considered Panamanian, foreign, or exempt.<\/li>\n<li>Exemption from VAT\/ITBMS on export services rendered to non resident related parties.<\/li>\n<li>Fast track immigration categories for executives and technical personnel, with favourable tax treatment when paid from abroad.<\/li>\n<li>Flexibility to outsource activities within Panama, provided the SEM company maintains effective oversight and maintains economic substance in the jurisdiction.<\/li>\n<\/ul>\n<p>This regime is widely used for regional headquarters, shared services, financial management centres, and corporate support functions.<\/p>\n<p><strong>4. EMMA Regime \u2013 Manufacturing Related Services<\/strong><\/p>\n<p>The EMMA regime (Special Regime for Multinational Companies Providing Manufacturing Related Services) complements SEM by targeting light manufacturing, assembly, testing, repair, remanufacturing, logistics of components, R&amp;D support, and other industrial service lines.<\/p>\n<p>Key Incentives:<\/p>\n<ul>\n<li>5% corporate income tax on net taxable income from qualifying services.<\/li>\n<li>Exemption from import duties on machinery, equipment, and materials used in the activity.<\/li>\n<li>Exemption from VAT\/ITBMS on export services.<\/li>\n<li>Exemption from dividend and complementary tax for EMMA licensed entities.<\/li>\n<li>Special immigration categories for executives and specialised technicians.<\/li>\n<\/ul>\n<p>EMMA is tailored to multinationals pursuing nearshoring strategies, supply chain consolidation, or establishing regional industrial service hubs.<\/p>\n<p><strong>5. Petroleum Free Zones<\/strong><\/p>\n<p>Petroleum Free Zones offer incentives for companies engaged in the importation, storage, transformation, distribution, and sale of crude oil and byproducts.<\/p>\n<p>Key Incentives:<\/p>\n<ul>\n<li>Exemption from income tax on foreign source petroleum related activities (e.g., sales to vessels transiting the Panama Canal).<\/li>\n<li>Withholding tax on dividends at 5%, and complementary tax at 2% where applicable.<\/li>\n<\/ul>\n<p>These benefits support Panama\u2019s strategic positioning as a regional fuels and bunkering hub.<\/p>\n<p><strong>6. Other Sector Specific Incentives<\/strong><\/p>\n<p>Panama also provides targeted benefits for industries such as:<\/p>\n<ul>\n<li>Tourism, through special tourism development incentives.<\/li>\n<li>Agriculture and forestry, including exemptions for certain income levels and approved investments.<\/li>\n<li>High technology research, education services, and environmental services, through free zone and special regime frameworks.<\/li>\n<\/ul>\n<p>These regimes create a layered incentive landscape that allows companies to structure their operations across corporate headquarters (SEM), industrial service lines (EMMA), and logistics\/manufacturing hubs (Panama Pacifico, ZLC, and other special zones).<\/p>\n<p>Panama\u2019s combination of tax incentives, strategic location, reliable legal framework, and stable US dollar economy makes it one of the most competitive jurisdictions in the region for multinational groups planning regional hubs, value added operations or nearshoring initiatives.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any impediments \/ tax charges that typically apply to the inflow or outflow of capital to and from your jurisdiction (e.g., withholding taxes, exchange controls, capital controls, etc.)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Kindly refer to question 25.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any significant transfer taxes, stamp duties, etc. to be taken into consideration?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Kindly refer to question 25.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any public takeover rules?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Although Panama does not have a dedicated set of public takeover rules, mergers and acquisitions transactions, specially involving publicly held companies, are regulated through a combination of corporate securities and antitrust laws, which aim to ensure transparency, protect shareholders rights and maintain competitive markets.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a merger control regime and is it mandatory \/ how does it broadly work?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Panama has a merger and acquisition control regime, but it is not mandatory. Instead, it operates under a voluntary notification system governed by Law 45 of 2007 and enforced by the Authority of Consumer Protection and Defense of Competition (ACODECO). If not notified in advance, ACODECO can later investigate and challenge mergers or acquisitions within 3 years if they significantly harm market competition.<\/p>\n<p>ACODECO regulates economic concentrations, which include mergers, acquisitions, and joint ventures.<\/p>\n<p>Companies can voluntarily submit requests to ACODECO to assess whether the above-mentioned transactions would significantly restrict or hinder competition. ACODECO has 60 calendar days to approve or deny or impose conditions on the transaction.<br \/>\nIf ACODECO does not issue a decision within 60 days, the transaction is automatically approved. If ACODECO rejects the transaction, companies may appeal the decision.<\/p>\n<p>On the other hand, if a transaction was not notified, ACODECO can retroactively investigate and challenge the transaction within 3 years if it results in anti-competitive effects.<\/p>\n<p>Certain industries require additional transaction requirements, for example (a) banking sector (requires approval from the Superintendency of Banks), (b) insurance and reinsurance Companies (requires approval from the Superintendency of Insurance), and (c) telecommunication sector (subject to Public Services Authority), amongst others.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there an obligation to negotiate in good faith?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Law 45 of 2007 does not explicitly impose an obligation to negotiate in good faith. However, general principles of Panamanian contract law require parties to act in good faith during contractual negotiations and execution. This principle is fundamental and applies broadly across various legal contexts, ensuring that parties engage honestly and fairly in their dealings.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What protections do employees benefit from when their employer is being acquired, for example, are there employee and \/ or employee representatives\u2019 information and consultation or co-determination obligations, and what process must be followed? Do these obligations differ depending on whether an asset or share deal is undertaken?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Panamanian law mandates that both employees and labour unions be notified of an employer substitution resulting from mergers and acquisitions. However, while they must be informed, they do not have the legal authority to prevent or veto the transaction.<\/p>\n<p>There are no explicit requirements for employers to engage in consultation or co-determination processes with employees or their representatives during mergers and acquisitions.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Please detail any foreign direct investment restrictions, controls or requirements? For example, please detail any limitations, notifications and \/ or approvals required for corporate acquisitions.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Panama actively encourages foreign direct investment and maintains an open and attractive environment for foreign investors, based on principles of \u201copenness to foreign ownership and equal treatment\u201d (foreign investors receive the same rights and obligations as domestic investors).<\/p>\n<p>However, retail trade (foreigners are restricted from engaging in retail trade activities) and media ownership (ownership of media is limited to Panamanian citizens to preserve national, cultural, and informational sovereignty) have specific restrictions.<\/p>\n<p>Generally, there are no prior approval requirements for foreign investments or corporate acquisitions or mergers in Panama. Foreign investors can establish or acquire Panamanian entities without the need of special permissions.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does your jurisdiction have any exchange control requirements?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Panama maintains a highly open financial system characterised by the absence of exchange controls.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the most common ways to wind up \/ liquidate \/ dissolve an entity in your jurisdiction? Please provide a brief explanation of the process.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In Panama, the dissolution and liquidation of a corporation can occur through (a) voluntary dissolution by shareholders agreement, (b) dissolution due to expiration or fulfillment of corporate purposes, and (c) judicial dissolutions.<\/p>\n<p>The general steps in the dissolution and liquidation process, are as follows:<\/p>\n<ol>\n<li>The entity\u2019s compliance with obligations is up to date and it is in compliance with all governmental obligations, including taxes and social security contributions.<\/li>\n<li>Shareholders\u2019 resolution approving the dissolution, and the appointment of a liquidator.<\/li>\n<li>Notarisation and Registration the dissolution agreement before the Public Registry of Panama.<\/li>\n<li>Publish the dissolution notice in a national newspaper.<\/li>\n<li>The liquidator settles debts, collective receivables, and distributes remaining assets.<\/li>\n<li>Notification relevant agencies of the dissolution, such as tax (DG) and social security (CSS) authorities.<\/li>\n<\/ol>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n<div class=\"word-count-hidden\" style=\"display:none;\">Estimated word count: <span class=\"word-count\">6778<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n<script type=\"text\/javascript\" src=\"\/wp-content\/themes\/twentyseventeen\/src\/jquery\/components\/filter-guides.js\" async><\/script><\/div>"}},"_links":{"self":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/137768","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=137768"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}