Article
3 min read
Author
Anja Simic
Published
August 12, 2021
Last Update
June 27, 2024
Table of Contents
Requirements for the Unique Taxation Registration Number (Registro Único de Contribuyentes, RUC)
Business declaration process in Panama
Opening a business bank account in Panama
Taxation process in Panama
Panama's breathtaking nature, a GDP that doubled between 2010 and 2015, and over 500,000 registered company headquarters are just some of the reasons you should consider starting your own business as an independent contractor here.
In Panama, you can start a business with your own name, without the need to establish a company or a business group. You will only need to obtain the Unique Taxation Registration Number (RUC). If you are a resident of Panama, this will be your ID number.
In this sole proprietorship legal form, a lawyer's participation is not essential to give it legal status, but it is recommended. There aren't any restrictions regarding the nationality of a director, and foreign investments have unlimited liability. There isn't any income tax if the company's income is sourced outside of Panama. In the further text, you'll get to know how to get the RUC, how much tax payment to expect, as you'll be introduced to the declaration process of a self-employed person.
Disclaimer: Be aware that this article is not a substitute for legal advice. Please always check official websites or seek legal advice before you take action.
As a natural person, obtaining the taxation registration number in Panama is straightforward. You'll need to get three things before applying for the RUC:
After you obtain the listed documents, you are ready to start the session on the Panamanian government website, e-Tax. It is quite simple to apply for the RUC. You'll need to follow the steps and attach the required documents. Keep in mind the website application is only available in Spanish, so if you are not a Spanish speaker, you'll need someone to help you with that.
Go to the Directorate-General for Income's (DGI) website, and follow steps to complete the online registration process for taxpayers who are acting as natural persons.
Here are the registration steps:
It is recommended to open a dedicated bank account for business purposes. A separate bank account will help you keep the business accounting clean and not mixed with personal transactions.
Panama has a very flexible tax policy. Individuals who receive a net taxable income less than USD 11,000 are exempt from paying taxes. Additionally, if your income is made outside of Panama, you aren't subject to income tax. Individuals who earn an income between USD 11,000 and USD 50,000 are subject to a 15% income tax on their net taxable income. Individuals who make more than the USD 50,000 taxable income are subject to a USD 5,850 income tax payable, plus 25% income tax.
Are you looking to hire independent contractors in Panama? Here's what you need to know to do it compliantly.
Solutions
© Copyright 2024. All Rights Reserved.