Panama Business Information


People around the world are facing all kinds of crises in their home countries. Whether the crisis is caused by political turmoil, communist / socialist governments taking power, war, civil unrest, pandemics, crashing stock or real estate markets, factories or businesses moving to China, India, Brazil or other countries with lower costs of labor, or your employer outsourcing jobs, many feel it is time to consider relocating to another place or country. If you are concerned about what is happening in your country economically or politically or simply want to live the rest of your life in a country which has better weather and half the cost of living to yours, Panama has a lot to offer.

This web page is dedicated to explaining the advantages of relocating and/or doing business in Panama. Deciding which country to relocate to could be the most important decision in your life.

11 reasons why Panama is the best place for living or doing business:

1.  Safety: Panama is considered by many to be a “Safe Haven” because it is highly stable politically and socio-economically, plus, thanks to the importance of the Panama Canal as an international shipping route for international trade & commerce, the country has special treaties between Panama and the United States for protection in the event of war or an attack on Panama. Panama is considered the safest country in Central America, and it is visited often by people from all over the world. There are thousands of expats from Europe, North America, South America and Asia who reside permanently in Panama.

2. Easy to Start a Business: It is also easy to set up a business in Panama. To form a Panama corporation for business it takes just 2-5 business days. Once the company is setup, a business operations permit is processed online and a small setup fee / tax is paid. You can even setup a businesses in your personal name as a sole proprietor, and the business operations permit is only $15 in that case. Municipal taxes are generally very low, depending on what business you are in, and what municipality you operate in.

3. Currency Stability: Ever since Panama became a nation in 1903, the United States allowed Panama to be the first country to adopt the U.S. Dollar along with Panama’s currency called the “Balboa”. The Balboa is pegged to the US Dollar in value. Both work as circulating currencies in Panama, although the Balboa only has coins, no bills. All local banking transactions in Panama are generally quoted in Balboas, however, international transactions are quoted in US Dollars.

4. Tax Benefits: For those doing business in Panama, the tax structure is relatively simple. Panama has a low VAT / sales tax on the sale of products or services of just 7% (versus 17-21% sales tax for most other surrounding countries in the region), and a relatively low corporate income tax of just 25% on net income after expenses. Dividend taxes range from 5-10%. Panama has a territorial tax system so only income generated from within the territory of Panama is taxed by the Panamanian government, while non-Panamanian income is tax free in Panama for Panamanian companies, residents and citizens (IMPORTANT NOTE: US persons who residents in Panama will not benefit from any of these Panamanian tax benefits because US persons are taxed on their world-wide income by the US and must report all world-wide income on their US tax declarations annually). Personal income taxes are also relatively low for Panamanian citizens or residents. Panama also has several “special economic zones” or duty free zones allowing businesses to import, assemble, manufacture, service, and/or export products or services duty free, and usually with reduced & very low income tax rates.

5. Government Stability: Panama has maintained democratically elected governments since 1989 with no political instability since then.

6. Economic Stability: Panama’s GDP has grown annually since 2005 with low inflation.

7. Strong Banks: Panama’s banks are strong, with very conservative lending practices, making them very stable. A very robust banking regulatory body keeps tight tabs on the banks of Panama.

8. Good Communication & Infrastructures: Panama has high speed internet connections throughout the country along with modern telephone equipment for international calling. Panama has good roads with 4 lane highways connecting its capitol with all major provincial capitals into Costa Rica. The highway between the Pacific and Atlantic oceans makes road travel in less than 90 minutes. Most provinces of Panama with major cities have domestic airports allowing fast domestic air travel. The Panama Canal allows large ships to travel between both oceans since 1914, with major ports in Panama for easy transport of goods.

9. Free of Natural Disasters: While Panama occasionally experiences minor earthquakes; it never has hurricanes, tornadoes, or tidal waves.

10. Compatible Language: While Spanish is the main language in Panama, English is very common due to the large English speaking expat community and the fact that the U.S. had been heavily involved in the construction and maintenance of the Panama Canal from 1904 to the end of 1999 when the U.S. turned over the Canal to the Panama government and closed all of its numerous military bases, many US expats stayed living in Panama.

11. Proximity: Panama City’s Tocumen International Airport has direct flight connections to and from over 100 international cities world-wide, with several international airlines servicing the country of Panama. Citizens of Canada, the U.S., Latin America, and Europe will find that Panama’s international airports have direct flights to these regions.


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