Auxadi Panama
Though Panama is a small country in the middle of the Central American isthmus, it’s one of the most highly competitive nations in the region. It’s most famous for its Canal, providing an essential shipping route linking the Atlantic and Pacific oceans, which it operates as a very successful business – generating revenue of close to US$3 billion in 2021.
While the economy is small, with a population of around 4.5 million, Panama is very much open, stable, and highly diverse. This ‘Hub of the Americas’ has the U.S. dollar as recognised currency, an efficient bilingual workforce, and GDP growth of 21% (US$60.12 billion in 2021).
Panama has a stable and robust economy that has recently improved its banking regulation systems, particularly in transparency and legal/regulatory cooperation. Panama has also adopted a long-term roadmap to diversify its energy sector, with the goal being 70% of its generated energy to be from renewable sources by 2050.
While the main economy of Panama is dependent on mining (copper, gold, iron, manganese), agriculture (mainly bananas, vegetables, and sugar), transport/logistics (the Canal is the government’s chief revenue source) and timber (43% is forest land), sectors with strong future potential include tourism, infrastructure, renewable energies, banking and finance, and ports and logistics.
Panama has increasingly become more popular for foreign investment due to its stable political environment, pro-business government, rising real estate market, geographic position, and steady economic growth.
Panama
Though Panama is a small country in the middle of the Central American isthmus, it’s one of the most highly competitive nations in the region. It’s most famous for its Canal, providing an essential shipping route linking the Atlantic and Pacific oceans, which it operates as a very successful business – generating revenue of close to US$3 billion in 2021.
While the economy is small, with a population of around 4.5 million, Panama is very much open, stable, and highly diverse. This ‘Hub of the Americas’ has the U.S. dollar as recognised currency, an efficient bilingual workforce, and GDP growth of 21% (US$60.12 billion in 2021).
Panama has a stable and robust economy that has recently improved its banking regulation systems, particularly in transparency and legal/regulatory cooperation. Panama has also adopted a long-term roadmap to diversify its energy sector, with the goal being 70% of its generated energy to be from renewable sources by 2050.
While the main economy of Panama is dependent on mining (copper, gold, iron, manganese), agriculture (mainly bananas, vegetables, and sugar), transport/logistics (the Canal is the government’s chief revenue source) and timber (43% is forest land), sectors with strong future potential include tourism, infrastructure, renewable energies, banking and finance, and ports and logistics.
Panama has increasingly become more popular for foreign investment due to its stable political environment, pro-business government, rising real estate market, geographic position, and steady economic growth.
Why Auxadi is trusted as an expert outsourcing provider in Panama
Auxadi is your ideal partner in Panama to support you with your global expansion and investments. We offer the full range of outsourced services, including accounting, tax and payroll, all aligned to help make life easier for our clients.
Business practices and customs in Panama are a unique blend of North American methods and traditional Latin style, and legislation is based on best practices from both the U.S. and EU.
Incorporation takes around two weeks, and can be done from overseas. Directors, shareholders and company officers can be any nationality and there’s no requirement to be resident in Panama, though a Resident Agent must be identified. Every company must appoint a Legal Representative and obtain a Business License.
Panama has 21 free-trade agreements, and the Constitution and Foreign Investment laws provide foreigners with rights equal to Panamanians when it comes to investing in a business, property ownership and investments in general.
Through a single-point-of-contact delivery model and our leading MySPV technology platform, we offer an unrivalled solution that can help you grow your business.
International Accounting, Tax and Payroll in 50 countries
Corporations
We can help you with your international expansion and we serve more than 600 clients across many different sections. We become an extension of your finance departments abroad and you can access the accounting information of all your international subsidiaries through a single portal, customised to meet your needs.
Funds
With nearly $7 billion of assets under management, we can take of the corporate management and SPV administration of your investment structures. Whether you’re creating a holding structure in Luxembourg or setting up a SPV in Europe and Latin America, we offer accounting, reporting, tax compliance and directorship solutions to help make your life easier.
Our services
Accounting Specialists
The tax year in the Republic of Panama coincides with the calendar year, and books must be up to date within three months of the close of the fiscal year. Annual income tax declarations must be submitted on the same timetable. VAT declarations are to be submitted monthly, by the 15th of the following month.
Accounts must comply with IFRS.
We help global corporations and fund managers with all their corporate accounting requirements. Using our bespoke and best-in-class technology platform, MySPV, you can have full and real time access and control of your accounting data, across multiple countries and multiple currencies.
Our accounting experts in Panama can help manage:
- Accounting and bookkeeping
- Management accounting
- Statutory accounting
- Official Books and Annual Accounts
- Cash management (including payments)
- Reporting
- Consolidation of financial statements
- Bank account tracking
- Treasury and cash flow forecasts
- Audit assistance
Tax Specialists
Though Panama has improved its banking regulation systems, particularly in transparency and legal/regulatory cooperation, and made high level commitments to work with the FATF (Financial Action Task Force) and GAFILAT (Financial Action Task Force of Latin America) to further strengthen its AML/CFT regimes.
Panama requires 36 tax payments per year, which will take an average of 400 hours to administer. Municipalities levy taxes at the local level, ranging from US$10 to US$2,000 per month.
Corporation tax is 25% of net taxable income. Standard VAT is 7%, with 10% charged for hotel/accommodation and alcohol, 15% for tobacco.
The government levies an annual fee of US$300 for maintaining an active company, known as the annual franchise tax.
We’re experts in international taxation and can help you to comply with the local tax requirements in Panama, using our purpose built automation technology.
- Tax compliance – covering multinational, federal, state, and municipal taxes
- Official Books and Annual Accounts
- Assistance with tax inspections and audits
- Tax reviews and claims
Payroll Specialists
The Panamanian Labour Code specifies a copy of each signed employment contract be filed with the Ministry of Labour.
Employers are required to pay social security contributions of 12.25% of the total remuneration of the employee, along with an education insurance tax (1.5% of salary). Workplace accident insurance premiums are also due from the employer, rates for which range from 0.98% to 5.67% depending on the risks associated with the role.
Panamanian workers receive a 13th month bonus payment equivalent to one month’s wage, paid over three instalments and due on 15 April, 15 August and 15 December.
Our experienced team of payroll specialists in Panama will use our unique payroll technology platform to seamlessly manage your payroll function.
Monitor and manage your international subsidiaries with our MultiCountry online platform
Access our online platform that provides you with a global and harmonized view of the accounting of your international subsidiaries, with drill down functionality to check support documentation, such as: invoices, outstanding creditors, approve payment orders, manage the payroll processing cycle and so much more. Request a demo to see how our technology can help you.
Get access to Auxadi corporate materials and technical guides to know more about us.
Meet the team
Rima Yousfan
Senior VP, Head of International Corporations
Auxadi in Panama
Edificio Coopaceidaan, RL
Corregimiento de Bella Vista, Via Brasil, oficina 5 piso 2
Ciudad de Panamá
Tel: + 507 310 9654
Count on our professional and extensive experience in the Panamanian market, for your investments in Panama and elsewhere in Europe, the United States and Latin America.