Visit this link for an up to date information: https://www.bizlatinhub.com/key-requirements-corporate-compliance-panama/ 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.

1. Corporate Compliance
For Legal Entities in
Panama
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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. 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. 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. 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. 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. 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 )

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