Law 186 of December 2, 2020 and Executive Decree 93 of August 20, 2021 (hereinafter both the “Regulations”) creates the regimen for Entrepreneurial Companies and seek to create a new type of legal entity who: (i) facilitates the formalization of companies through a simple registration system and; (ii) grants tax benefits to entrepreneurs.
The incentives of these Regulations can be applied to all innovative ventures or those representing value creation or social and economic benefits at a national level, whose taxable income is produced within the territory of the Republic of Panama.
Those companies who after their “incorporation” remains within the following income margins will be considered as micro and small businesses:
Some of the most relevant aspects of the Regulations for Entrepreneurial Companies are:
Below several incentives for Entrepreneurial Companies:
The benefits established within the Regulations will only be applicable once and will be counted from the moment the transformation of the company is registered in the Public Registry.
The Entrepreneurial Companies will have a period of six months to start operations and is counted from the issuance of their Notice of Operation (Aviso de Operación). In case of not starting operations within this period, it will be dissolved ex officio.
The Regulations will take effect on December 3, 2021.
Any questions about the implementation of the Regulations, benefits, requirements, limitations and reporting obligations, please do not hesitate to contact us so that we can provide you with a comprehensive advice tailored to your needs.
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