Panama is considered a good place to start a business, particularly for entrepreneurs seeking regional access to Latin America with global connectivity.
Many choose to set up a business in Panama because its strategic location, US-dollar economy, business-friendly tax system, and open policies for foreign ownership make it an attractive hub for startups and international companies alike.
While there are some administrative and banking hurdles, Panama’s overall ease of doing business and favorable investment climate continue to draw local and foreign entrepreneurs.
This article covers:
- What are good businesses to start in Panama?
- What is the ease of doing business in Panama?
- How long does it take to open a business in Panama?
- How much does it cost to start a business in Panama?
My contact details are hello@adamfayed.com and WhatsApp +44-7393-450-837 if you have any questions.
The information in this article is for general guidance only. It does not constitute financial, legal, or tax advice, and is not a recommendation or solicitation to invest. Some facts may have changed since the time of writing.
Is it easy to start a business in Panama?
Yes, starting a business in Panama is relatively easy especially when compared to other Latin American countries.
The process typically involves:
- Choosing a legal structure (most commonly a Sociedad Anónima or SA)
- Registering the business with the Public Registry
- Obtaining a commercial license (Aviso de Operación) from the Ministry of Commerce and Industries
- Opening a local bank account (which may require proof of economic activity and local presence)
Incorporation can be completed in a few weeks, especially with the help of a local attorney or service provider.
Digital registration tools and simplified procedures have made it more accessible than ever.
Is Panama business friendly?
Yes. Panama consistently ranks as one of the more business-friendly countries in the region due to:
- Low corporate tax (25% flat rate, with offshore income exempt from local taxation)
- No restrictions on capital repatriation
- Modern infrastructure, including reliable internet and access to global shipping routes via the Panama Canal
- Multilingual workforce, with English widely spoken in the business community
Panama also benefits from strong banking and legal sectors, making it easier for startups to scale operations and access professional services.
Can a foreigner own a business in Panama?
Yes, foreigners can fully own and operate businesses in Panama.
There are no nationality-based restrictions on company ownership.
However, some regulated professions such as law, medicine, or engineering are reserved for Panamanian citizens.
Foreign entrepreneurs may also apply for residency under various visa programs, including:
- The Friendly Nations Visa, which grants residency to citizens from a list of approved countries (including the US, UK, EU countries, and more)
- The Investor Visa, which allows residency through real estate or business investments
Residency is not required to incorporate a business, but it may be helpful for day-to-day operations and banking.
How much does it cost to start a business in Panama?
Startup costs can vary depending on the type and scale of business, but expect the following baseline expenses:
- Company registration: $1,000–$1,500 (including legal and notary fees)
- Commercial license: $55–$70 for most business types
- Resident agent (lawyer): $300–$500 annually
- Office rental (if needed): $400+ per month in Panama City
- Bank deposit requirement: Some banks require a minimum initial deposit ($1,000 or more)
These figures are competitive compared to other regional hubs and attractive for small- to mid-sized ventures.
What are the most popular business sectors in Panama?
- Logistics and trade: With the Panama Canal at its core, the country is a global shipping and logistics hub. Many multinational companies use Panama as a distribution center for Latin America, benefiting from world-class port infrastructure and free trade agreements.
- Tourism and hospitality: Panama’s biodiversity, tropical beaches, and cultural heritage attract visitors from around the world. Areas like Bocas del Toro, Boquete, and Panama City offer strong potential for boutique hotels, eco-resorts, and guided tour services.
- Real estate and construction: A growing expat community and steady urban development continue to drive demand for residential and commercial properties. Foreign investors often target high-rise condos in Panama City, gated communities in beach areas, or rental properties in tourist hubs.
- Fintech and digital services: As Panama expands its internet connectivity and modernizes financial services, opportunities are growing in tech-related sectors such as payment processing, e-commerce support, software development, and digital marketing.
What are the challenges of doing business in Panama?
- Bureaucracy and delays in public administration
- Banking compliance hurdles, particularly for foreigners
- Limited access to financing for startups
- Language barriers outside of Panama City (Spanish is the official language)
However, these issues are often manageable with local partnerships and proper planning.
Conclusion
Panama remains a solid choice for starting a business, especially for those looking to serve international markets from a stable, dollar-based economy.
Foreigners enjoy full ownership rights, a low tax burden on offshore earnings, and relatively affordable startup costs.
While banking and bureaucracy can be challenging, Panama’s overall environment is pro-business and globally connected.
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Adam is an internationally recognised author on financial matters with over 830million answer views on Quora, a widely sold book on Amazon, and a contributor on Forbes.
