About Your Business in Panama…
Wanting to Start a Business in Panama?
Before starting any business, apart from the study and analysis of the market, profitability and competition, you should investigate the legal requirements in order to execute your entrepreneurial idea. Certain economic activities require a special commercial license. Although in Panama there are not as many restrictions as in other countries when it comes to starting your own business, there are certain commercial activities that are exclusively reserved for nationals.
This limitation is based on Article 20 of the Constitution of the Republic of Panama, which establishes that Panamanians and foreigners are equal before the law, but for reasons of labor, national economy, morality, health, public safety and other conditions, the exercise of certain activities may be denied to foreigners in general.
Activities Reserved for Panamanian Nationals Only
Retail in general is reserved for Panamanians. That is to say, the direct sale of products to the Consumer (B2C). But it is possible to sell wholesale products (B2B) to distributors, supermarkets or other stores that sell directly to the customer. It is also possible to import and export products or merchandise. And, there are certain exceptions when it comes to
agricultural products that you produce yourself on your own your farm and then sell them (example farmer's market).
The so-called "liberal professions" in Panama require a special permit and can only be performed by Panamanians by birth or foreigners with a letter of naturalization. These include the following professional branches:
Barbering and cosmetology (there are exceptions for foreigners married to Panamanian nationals),
Engineering (Civil, Chemical and Forestry are not allowed, the rest are)
Architecture (there are exceptions for foreigners married to nationals),
Speech Therapists, Therapists and the like
Education in the following fields: History, Geography and Civics. (The rest of the fields are allowed).
If I studied a career in medicine or nursing, can I practice it directly in Panama as a foreigner?
The answer is no. Unless you are naturalized and your degree is recognized in Panama, you cannot.
But what you can do is to incorporate a company in Panama (for example, a private clinic or an agency offering nursing services) and be the owner of that company and hiring licensed Panamanian employees to perform the service under your supervision. For the activities of engineering, architecture, insurance, real estate companies, certain tourism companies (such as travel agencies or tour operators) among others, there is a special rule that says that the president and legal representative of the company must be the person who holds the license to exercise that economic activity. In that case, it is possible to hire a person with said license, but it is the company that provides the service. The same company of which you are the owner. You would be the one who manages and administrates the company and provides instructions based on your experience and knowledge in that field. But it will be your company together with your collaborators, that will execute the work and carry out the commercial activity. You may not be able to validate your architectural degree in Panama (or it may be a little difficult to do so), but it is possible for you to have your own construction company.
What activities are allowed for foreigners in Panama?
Services and wholesale activities are accessible to foreigners. This means that you can open a hostel or B&B, you can open a restaurant, import and/or export products, work remotely offering (digital) services to customers anywhere in the world, invest in real estate and live on rent and much more.
In fact we have clients all over Panama who operate touristic and/or gastronomic companies, who are owners of hostels, hotels and restaurants, who produce strawberries, tofu or grow gourmet coffee, who are involved in construction, real estate projects or real estate investment, who offer maritime services, who provide IT services to clients in Germany, logistics services, who sell digital products or software, real estate agents and property managers, who work remotely as freelancers for clients in Europe and/or the United States, who buy nails in Taiwan and sell them to European companies, and much more.
As specialists in corporate law we are passionate about entrepreneurship and new business set-ups, and there are endless opportunities and entrepreneurial ideas to discover.
Tell us about your experience. What is your business idea?