The Entrepreneurship Companies

Law 186 of Entrepreneurship Companies (“SE”) offers a new legal vehicle that facilitates the formalization of companies through a simplified registration system and grants tax incentives. Consequently, this provides legal viability for those interested in innovating a product or service. The scope of the benefits included in this Law is also very useful for those commercial agents that are already linked to other types of legal entities, since those existing legal entities that qualify can be transformed into entrepreneurship companies. 


  • It requires 2 to 5 people, domiciled in Panama to constitute an “EC”. 
  • None of them can belong to another “EC”, but they can perfectly be members of any other type of entity and / or associations. 
  • They may carry out any type of legal activity within the national territory, except for those that by law are considered regulated activities or carried out by “obligated non-financial subjects”. 
  • The assembly of partners will designate the partner / s who will hold the administration and legal representation of the “EC”. The administrator must always be a partner and in turn, may execute all acts and contracts included in the corporate objectives and operation of the company. 
  • The “ECs” are limited to the following income: 
  • Up to $ 150,000.00 of gross income or annual billing for micro-businesses. 
  • Up to $ 1,000,000.00 of gross income or annual billing for the small business. 


  • Exempt from annual flat rate during the first 2 years. 
  • Exempt from income tax for the first 2 years. 
  • Not obliged to invoice through fiscal printers during the first 2 years. 
  • Reductions of up to 50% in import duties, subject to regulation by the Executive Branch. 
  • They may receive donations up to the sum of $ 10,000.00, deductible from income tax for the donor. The donor cannot participate in the “EC” that receives the donation. 
  • In contracts/agreements, both with the State and with private companies, payments to the “EC” must be made in a term not exceeding 30 calendar days. In case of late payment, the State or the private company that contracted with the “EC” will incur an interest rate of 1% per month on the amount of the invoice. 


  • Update the information regarding changes in its corporate structure, within a maximum term of 30 days. 
  • Have the records of participations, minutes of meetings and administrators. 
  • Issue electronic invoice for all businesses carried out and keep control of all income and expenses in the virtual window of entrepreneurship of AMPYME (Micro, Small and Medium Enterprise Authority). 
  • Based on the above, upload the financial statements to said system once a year. 

Simplified constitutive procedure. 

The “EC” are constituted by means of a “Standard Statute”, which is nothing more than a simplified articles of incorporation, which will be presented before the Single Window for Entrepreneurship of AMPYME for subsequent registration in the Public Registry. Unlike other types of corporate structures, the subscribers will be the partners and final beneficiaries of the “EC”; and it will not be mandatory to designate a Resident Agent. This will lead to: 

  • Automatic registration in the “DGI” to obtain the “RUC”. 
  • Automatic issuance of the operation notice (“Aviso de Operación”) based on the activity declared in the Standard Statute. 
  • Automatic registration in the Business Registry of the AMPYME. 
  • Automatic registration of final beneficiaries in the Private and Unique Registration System of Final Beneficiaries of Companies. 

Transformation to Entrepreneurship Company. 

Any company may be transformed into an entrepreneurial company and vice versa. Notwithstanding the foregoing, no company that has been operating in the country for more than 3 years may be transformed into an entrepreneurial company. 

** This Law becomes effective as of December 2, 2021. 


Federico Moreno


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