Panama

Business Environment

Business practices

Closed hours and days: The national banks open from Monday to Friday, from 8.00 to 15.00, the foreign banks open from 8.00 to 13.00.

Public holidays

Compensation day

Periods when companies usually close

Standards

National standards organizations

Integration in the international standards network

The body in charge of the standardisation and certification of products in Panama is the Comision Panameña de Normas Industriales y Técnicas (COPANIT).

Panama is a member country of the International Organization of Legal Metrology (OIML).
The import of finished products, requires a preliminary licensing from several governmental institutions depending on their nature; the Department of Control of Food and Veterinarian Vigilance of the Ministry of Health is responsible for the sanitary register of foodstuffs. The Department of Pharmacy and Drugs of the same ministry authorises the recording of pharmaceutical products.
Panama's Institute of Foreign Trade (IPCE) monitors the conformity of the imports with the bilateral agreements.

Classification of standards

Online consultation of standards

Certification organizations

Legal framework

Independence of justice: Though constitution provides for an independent judiciary, but it remains inefficient, politicized and prone to corruption.
Equal treatment of nationals and foreigners: Foreign nationals cannot be guaranteed an impartial trail from the country’s judicial system.
The language of justice: Spanish is the judicial language used in the country.
Having recourse to an interpreter: Having an interpreter is possible.
Sources of the law and legal similarities: Panama is a Republic state based on parliamentary democracy. Panama (official name: Republic of Panama) is of immense commercial importance because of its strategic locational advantage.
President is both the chief of state and the head of the government. President is elected by a popular vote to serve a five-year term, and enjoys the executive powers which include implementation of the law within the country and running the day-to-day affairs. The Cabinet is appointed by the President.
The legislature in Panama is unicameral. The parliament called National Assembly has 78 seats, with its members elected by popular vote to serve five-year terms. The legislature is a power branch which is equal to and independent of the executive. Legislative power is vested in both the government and the National Assembly. President cannot dissolve the parliament directly; needs approval of the latter. The people of Panama have considerable political power.
Though constitution provides for an independent judiciary, but it remains inefficient, politicized and prone to corruption. The main source of the law is the constitution of 1972 (reformed many times, latest in 2004). The legal system is based on civil law system and judicial reviews of the legislative acts. Panama accepts compulsory ICJ jurisdiction but with reservations. Spanish is the judicial language used in the country, having an interpreter is possible.
On the whole, Panama is ruled by law but the country faces the challenge of shaking off its reputation as a major transit point for US-bound drugs and illegal immigrants, as well as a haven for money-laundering. Foreign nationals cannot be guaranteed an impartial trail from the country’s judicial system. Panama is plagued with a high degree of corruption particularly in administration and political system.
Consulting national laws online

Intellectual Property

National organizations: The Panamanian organisation for the protection of intellectual property is the Dirección General del Registro de la Propriedad Industrial , which is part of the Ministry of Trade and Industry.
Panama signed the Interamerican General Agreement for the Trademark manufacture and Commercial Protection of 1929.
The new Law on Industrial Property, approved in April, 1996, meets WTO requirements. The law severely punishes trademarks and patents hacking, and plans fast legal proceedings, in case of a conflict.

National regulation and international agreements

Type of property	Law	Validity	International agreements signed
Patent		Period of validity of 20 years
Trademark			Trademark law treaty Nice agreement concerning the International classification of goods and Services for the Purposes of the registration of Marks Protocol relating to the Madrid Agreement concerning the International Registration of Marks
Design		Period of validity of 10 years
Copyright
Industrial Models

Tax rates

Consumption taxes

Tax rate: 5%
An excise tax at a rate of 5% applies also to cars, motorcycles, cable television, pre-paid cellular phones, insurance premiums and airfares.
Reduced tax rate: Basic foodstuffs, medicine, medical services, agricultural raw materials, fuel and books are VAT exempt, as well as trade and exports.

Corporate taxes

Tax rate

Capital gains taxation

The tax rate on long-term capital gains is 30%.

Other corporate taxes

Double taxation treaties

Countries with whom a double taxation treaty have been signed: See the list of the convention signed on the website of the Ministry of Foreign Affairs.
Whithholding taxes
Bilateral agreement

Sources of fiscal information

Tax Authorities: Department of Customs (in Spanish); Taxes in Panama
Other domestic resources

Accounting rules

Tax year: The fiscal year begins on January 1st and ends on December 31st of the same year.
Accounting regulation bodies
Publication: According to the law, all the companies have to update regularly a stock account, a balance sheet.
Professional accountancy bodies
Certification and auditing: The financials statements of public companies must be controlled by independent accountants.
Accounting news