# Business Licenses

> Most commercial and industrial activity in Panama requires an Operation Notice (Aviso de Operación) under Law 5 of 2007, obtained online via PanamaEmprende in minutes. Annual tax per the Fiscal Code (as amended 2009-2010): 2% of the company's net worth (minimum $100, maximum $60,000), plus municipal taxes per district and the $300 annual franchise tax for corporations. Regulated activities (banking, securities, insurance, tourism, food, construction) require additional sector licenses. Retail trade has constitutional restrictions for foreigners.

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Most commercial and industrial activity in Panama requires an Aviso de Operación (Operation Notice) under Law 5 of 2007, obtained online through the PanamaEmprende portal (panamaemprende.gob.pa) in a matter of minutes. The annual Operation Notice tax is 2% of the company's net worth, with a $100 minimum and $60,000 maximum, per the Fiscal Code (as amended 2009-2010) (source: DGI). Municipal taxes also apply per district, plus the $300 annual franchise tax (tasa única) for corporations. Certain activities require sector regulators' licenses instead of, or in addition to, the Operation Notice: banking (SBP), securities (SMV), insurance (SSRP), tourism registration (ATP), sanitary permits for food handling (MINSA) and municipal construction permits. Important: retail trade is constitutionally reserved for Panamanian nationals with exceptions; foreign investors should verify retail restrictions with counsel.

## Benefits

### Simplicity and Speed

- **100% Online Process in Minutes** (Minutos) — The Operation Notice is generated on the PanamaEmprende portal without queues or prior approvals for most activities: it is a merchant's declaration, not a discretionary license.
  - _Source: Ley 5 de 2007_
- **A Single Document to Operate** — Law 5 of 2007 replaced the old commercial and industrial licenses with a single Operation Notice for most non-regulated activities.
  - _Source: Ley 5 de 2007_
### Capped Tax Costs

- **2% Annual Tax Capped at $60,000** (2% (mín. $100 / máx. $60,000)) — The annual Operation Notice tax is 2% of the company's net worth, with a $100 minimum and a $60,000 maximum per the Fiscal Code (as amended 2009-2010), declared to the DGI. Special regimes (e.g., free zones) have their own rules.
  - _Source: Ley 5 de 2007 (Aviso de Operación); impuesto y tope de $60,000 según el Código Fiscal, reformado 2009-2010 (Ley 49 de 2009 / Ley 8 de 2010)_
- **Predictable Per-Entity Costs** ($300/año (tasa única)) — In addition to the Operation Notice tax, corporations pay the $300 annual franchise tax (tasa única) and the municipal taxes of the district where they operate, all known in advance.
  - _Source: Código Fiscal (tasa única anual de sociedades)_

## Frequently asked questions

### Does every business need an Operation Notice?

Most commercial and industrial activities within Panama do require it (Law 5 of 2007). Some activities are exempt or governed by special regimes (e.g., certain free zone activities or regulated professions), and regulated financial activities additionally require a superintendency license. Verify your specific activity on PanamaEmprende or with your attorney.

### Can a foreigner open a retail store in Panama?

Retail trade is constitutionally reserved for Panamanian nationals, with limited exceptions. The definition of what constitutes 'retail trade' and the permitted structures are sensitive legal matters: consult a Panamanian attorney before investing in retail. Wholesale trade, industry and services do not carry this general restriction.

### How is the annual Operation Notice tax calculated?

It is 2% of the company's net worth (assets minus liabilities), with a $100 minimum and a $60,000 annual maximum, declared with the income tax return to the DGI. Companies in free zones and special regimes have different rates or caps. Confirm the calculation with your accountant.

_This information is general guidance only and does not constitute legal or tax advice. License requirements, taxes and restrictions (including the constitutional retail reservation) change and their application is case-specific. Consult a licensed attorney in Panama and verify current information at panamaemprende.gob.pa, mici.gob.pa and dgi.mef.gob.pa before operating. Last updated: July 2026._