For entrepreneurship supporting, the Republic of Panama through Law 186 of December 2, 2020 creates a new legal entity called Entrepreneurship Company.


This new vehicle is intended for those starting a business under less complex corporate structures. Also, beneficial tax rates are established, and a Resident Agent is not required as it is regarding corporations.


The maximum gross income for the pioneering activity is set at $1,000,000 (one million) dollars; in case of exceeding this limit, the entrepreneur must convert into other type of legal entity within the next 6 months.


The partners for this new legal entity may only be individuals, which mean that entrepreneurship companies may not be formed by legal entities.


Important tax benefits are granted, among these: they will not pay an annual fee, or income tax, and the use of fiscal printers is not required, during the first 2 years from their incorporation.


This law will be into effect next year, as of December 2, 2021.


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