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Hub You - How to Start a Business in Panama
If you are looking for a career area with broad employment options, look to sales jobs. Companies are always looking for talented marketers and sales people to increase the bottom line. Without good sales people, companies go out of business - it's that simple.Ok, so we know the demand is there, the jobs are there, but are you the right person for this career? There is no area of business that has more opportunities for the right person than sales.Type of sales jobs Financial Sales:The areas that this section covers includes: Investments, Insurance, Real Estate, Loan Brokers and Mortgage Loan Sales. These jobs are plentiful and most will train new employees from scratch. If you are successful in financial sales, you can make an unlimited income and enjoy working in an exciting field. The negatives with these sales jobs are the same as with most sales positions - you sell, you earn - you don't, you won't.Real estate agents rely on the "big hit". It is not a career that will reward you with multiple daily sales. Your job is to work as many prospects as possible, without sacrificing service and availability to your buyers and sellers. Your hope is that some of these prospects buy the home you are showing. Challenges in the real estate sales market include: real estate trends and shrinking real estate commissions. Agents have to work harder and longer to earn the same money they did just 5 years ago. If you have a high interest in real estate and are comfortable traveling and meeting people, it could be your career of choice. If you are not motivated or are willing to do those things, it a job that will frustrate more than it will compensate.Investment, insurance and loan brokers rely on phone work. Cold calling and prospecting is what you will be doing in the beginning and it is ne
2. Companies having less than 10 employees can employ 1 foreigner.
3. Companies can employ foreign Managers and Supervisors when the company does business abroad from Panama with prior approval by the Ministry of Labor.
You must obtain a work permit from the Ministry of Labor for every foreign worker.
Panama’s Labor Laws The Labor Code of 1971 deals with Labor Relations including the rights and duties of employers and employees. "Subordination" is the key concept of the law. Any relationship where one person is subordinate to another falls within the law. It makes no difference whether the relationship is or is not described as "employment".
There are certain basic employee rights which must be followed:
1. Written Employment Contract
2. Minimum Wage
3. Maximum Hours
4. Paid Vacation Time
5. Firing Employees
Employee Contracts You must have your employees sign a written employment contract called an Inscripcion Contratos con trabajadores. You must file two copies of the contract with the Ministerio de Trabajo y Desarrollo Laboral. Employers can easily terminate the employee during the first two years. After that, employees have greater protection under the law. The law lists "just causes" for dismissal. Unlawful dismissals can result in minimal compensation payments. Both parties can contract for "fixed terms". Minimum wage levels vary according to the employee's seniority.
Vacations: There are 11 public holidays per year. In addition, employees are entitled to a 30 day vacation every year. 13th Month: The law also requires a 30 day paid bonus every year which is known as "the 13th month". This bonus is estimated at one-salary day for every 11 days of work. The 13 month bonus is paid in 3 equal installments: April 15th, August 15th, and December 15th every year.
Unions Unions are allowed in Panama. Unions can collectively negotiate on behalf of the employees. Strikes are lawful under defined circumstances after a majority vote of the member employees. Conciliation is
Non-cash incentive programs and fringe benefits can have a powerful influence on attitudes, that should in turn improve results. You can give employees the greatest incentive program, however, by impairing a sense of ownership in the organization. Ultimately, loyal and happy employees tend to work harder, leading to increased overall productivity.1. Share OwnershipUse share schemes as an incentive program to reward people for contributing to team success. An employee who sees his or her efforts rewarded in company shares will, in theory, identify with the company, be committed to its success, and perform more effectively. A company with shares in the company will see that, quite literally, their sucess is the company's sucess, and vice versa. The harder they work, the better chance their shares have of increasing in value. In reality, it may be hard to tell whether the company’s success is due to employees owning shares, or whether the success itself has the led the company to issue shares. It is also difficult to know whether employees would have performed less effectively if no shares had changed hands. Nevertheless, by giving people a stake in the company as an incentive program, you are making a highly positive statement about them, that encourages them to feel positive in return.2. Gifts Aren't Just For ChristmasSurprise people with gifts they do not expect. Expected remuneration has less impact than the unexpected. Even generous pay rises are taken for granted after a while, as salary increases accordingly. Incentive programs are like a far smaller payment, in the form of a gift, and are priceless in the eyes of the recipient. An employee could use a cash award to buy a gift, perhaps a weekend vacation, but that would provide less satisfaction than an incentive program in kind from the managem
LEGAL BUSINESS STRUCTURE Your first consideration is to decide what type of business structure to use.
There are 3 normal business entities here in Panama: Sole Proprietor where you and your spouse & family operate a business as sole owners. Partnership where you team up with one or more persons in running the business. Corporation where you register with the government as a company issuing stocks, having a Board of Directors and corporate officers. While a sole proprietorship can be an oral agreement between close family members, the other two entities need the assistance of a Panamanian lawyer. That's because legal documents need to be prepared forming a Partnership or Corporation. If they are wrongly prepared, they will be legally null and void causing a business legal nightmare for its members.
Let's examine the different legal structures here in Panama:
Corporation (Sociedad Anonima) Corporations are formed under the Law No. 32 of 1927 and the Commercial Code (Decree-Law No. 5 of 1997, Article 5). A Panamanian corporation is formed by two persons (called Subscribers) or Nominees (who act on behalf of absent foreigners) who execute legal documents called the Articles of Incorporation. Those documents are filed with the Panama Public Registry office. After the corporation is formed, only one shareholder will be required. Corporate shares are issued which can be of various classes, can have par value or not, may be officially registered, or can be discreet Bearer shares. The corporation must have a resident Registered Agent (Panamanian lawyer). There must be at least three Directors whose names must be in the Articles of Incorporation. Any changes of Directors must also be filed with the Public Registry. Unless the Articles are changed or the corporation merges or dissolves there will be no other filing requirements.
Foreign Corporation
If you already have a corporation in another country, it can do business in Panama by filing the following documents at the Public Registry Office:
1. A notarized Spanish translation of the Articles of Incorporation;
2. Board of Directors minutes authorizing the Panamanian registration;
3. Copies of the most recent financial statements;
4. A certificate from a Panamanian Consul confirming that the company is organized according to the laws of its place of incorporation;
5. Notification of the transfer of capital to the Panamanian operation.
General Partnership General Partnerships are permitted in Panama. As with most countries, the partners will have unlimited civil liability. That means every partner can be sued even if only one of them commits an error in the course of business.
Limited Partnership Limited Partnerships (called Sociedad de Responsibilidad) are also permitted in Panama. They are governed by the Commercial Code and Law No. 24 of 1966. There may be from 2 to 20 partners with no restrictions as to their nationalities or domicile. Their Capital must be at least $2,000 up to $500,000. The names of the partners must be registered with the Public Registry Office including the amount of Capital each contributed. Each partner's civil liability for the Partnership's debts is limited to the amount subscribed to but unpaid. If the Partnership appoints an independent administrator, his/her name must also be registered. No meetings are required if the Partnership has 5 members or less. Otherwise, a meeting must be held at least once a year. There are no requirements for annual returns or filing of any accountings.
An alternative to a Sole Proprietorship is to create an Individual Limited Proprietorship (Empressa Individual de Responsibilidad Limitada). This is set up in the same manner as a Limited Partnership except having only one member. The individual transfers his/her assets to the business. Business civil liability is limited to the amount of the committed assets.
Civil Partnership A Civil Partnership (Sociedad Civil) is allowed by the Commercial Code and Law No. 24 of 1966. The liability of the partners is unlimited. This type of partnership is often selected by professionals such as lawyers and accountants.
Commandite Company The Commandite Company (Sociedad en Commandita) is a hybrid partnership and corporation also governed by the Commercial Code and Law No. 24 of 1966. At least one partner must have unlimited liability, while the liability of the limited partners is limited to the amount of capital subscribed. This type of legal structure is seldom used in Panama.
GOVERNMENT PERMITS & LICENSES Once you have either formed a Panamanian Corporation, or a Partnership, or are acting as a Sole Proprietor, you will need to register your business with the government before opening for business.
The 6 steps provided below are the requirements for registering your business with the national and local governments:
1. Income Tax Registry This is called "Registro Fiscal" with the Panamanian government. The Panamanian government has a website explaining what is necessary to register in Spanish. Go to the govt. website at: www.dgi.gob.pa This is the government Revenue (Tax) Service where your company receives its income tax id number called the Direccion General de Ingresos. You will need to keep records of income and expenses and file an annual income tax (or corporate tax) return and pay any taxes owed.
2. Commercial License Another Panama government website will give you information regarding getting a commercial license in Spanish at: www.mici.gob.pa This Ministry is called the MINISTERIO de COMERCIO e INDUSTRIAS, translated as the Ministry of Commerce & Industry. This is otherwise known as your Business License. Every business in Panama is required to have one.
3. Municipal Taxes After getting your Panamanian government licenses, you need to register with your local municipality in order to pay your municipal taxes.
4. Social Security Number Then you must go to the Registro Patronal de la Caja de Seguro Social (CSS) to get a Social Security number for your business and for yourself.
5. Sanitary Permit If your business deals with food or beverages, you will need to get Permisos Sanitarios with the Ministerio de Salud. That translates as a Health Certificate from the Ministry of Health for permission to operate a sanitary business. Every employee (including owners & management) who prepare or serve food or beverages (or are in the vicinity of food or beverage preparation or service) must obtain two different Permits. One requires a medical & dental examination at a public hospital. The other is issued after attending a two day health & safety course.
6. Fumigation Certificate Every business which is open to the public must be fumigated. You will need to hire a private fumigation company every four months to fumigate against ants, roaches, and other bugs. You must then present a receipt from the fumigation company and obtain a Fumigation Certificate from your local municipality. This must be publicly displayed at your business entrance.
Hiring Employees Now that you have obtained all of the required government permits and licenses, you are now ready to hire employees. For those of you thinking of hiring your expat buddies, Panama limits a company's work force to a maximum of 10% foreigners (non-Panamanian). Panamanian laws require that 90% of a company's employees be Panamanian citizens, or married to a Panamanian, or foreign persons residing here for at least 10 years.
But, there are exceptions:
1. Required technical or specialized staff unavailable in Panama increases your quota to 15% foreigners. You can also petition the Ministry of Labor for a higher quota.
2. Companies having less than 10 employees can employ 1 foreigner.
3. Companies can employ foreign Managers and Supervisors when the company does business abroad from Panama with prior approval by the Ministry of Labor.
You must obtain a work permit from the Ministry of Labor for every foreign worker.
Panama’s Labor Laws The Labor Code of 1971 deals with Labor Relations including the rights and duties of employers and employees. "Subordination" is the key concept of the law. Any relationship where one person is subordinate to another falls within the law. It makes no difference whether the relationship is or is not described as "employment".
There are certain basic employee rights which must be followed:
1. Written Employment Contract
2. Minimum Wage
3. Maximum Hours
4. Paid Vacation Time
5. Firing Employees
Employee Contracts You must have your employees sign a written employment contract called an Inscripcion Contratos con trabajadores. You must file two copies of the contract with the Ministerio de Trabajo y Desarrollo Laboral. Employers can easily terminate the employee during the first two years. After that, employees have greater protection under the law. The law lists "just causes" for dismissal. Unlawful dismissals can result in minimal compensation payments. Both parties can contract for "fixed terms". Minimum wage levels vary according to the employee's seniority.
Vacations: There are 11 public holidays per year. In addition, employees are entitled to a 30 day vacation every year. 13th Month: The law also requires a 30 day paid bonus every year which is known as "the 13th month". This bonus is estimated at one-salary day for every 11 days of work. The 13 month bonus is paid in 3 equal installments: April 15th, August 15th, and December 15th every year.
Unions Unions are allowed in Panama. Unions can collectively negotiate on behalf of the employees. Strikes are lawful under defined circumstances after a majority vote of the member employees. Conciliation is
Finding employment as a Cessna Caravan "driver" can be a challenge. Plenty of pilots for just a few positions. Fortunately, if you know where to look, you can turn up information right online and save yourself a lot of time and aggravation. The following web sites list opportunities as they become available:Air Serv International – If humanitarian work interests you, then Air Serv International just may be the organization for you. Air Serv places qualified people in developing countries to provide aviation support to humanitarian groups and other non-profit organizations. Visit www.airserv.org for more information.Career Builder – This is the largest job opportunity site on the internet, with over one million jobs listed. Aviation opportunities are listed; the site compares favorably with Monster as far as the number of aviation opportunities available. Registration is free and you can post your resume for free as well. Visit www.careerbuilder.com for more information.Telford Group – As a leader in operating, maintaining, selling and leasing a large number of regional, corporate and private aircraft, including the Cessna Caravan, the Telford Group is worth pursuing exploring for more information. Visit www.telfordaviation.com for details.Aviation Employment Board – From time to time this large aviation job site lists opportunities for Cessna Caravan pilots. Registration is free and the site is updated regularly. Visit www.aviationemploymentboard.net for more information.In addition to the above sites, several companies own Cessna Caravan aircraft including Multi-Aero, Inc.; Candlewood Hotels; Superior Aviation; Tradewind Aviation; Rainbow Jet; and others.
Foreign Corporation
If you already have a corporation in another country, it can do business in Panama by filing the following documents at the Public Registry Office:
1. A notarized Spanish translation of the Articles of Incorporation;
2. Board of Directors minutes authorizing the Panamanian registration;
3. Copies of the most recent financial statements;
4. A certificate from a Panamanian Consul confirming that the company is organized according to the laws of its place of incorporation;
5. Notification of the transfer of capital to the Panamanian operation.
General Partnership General Partnerships are permitted in Panama. As with most countries, the partners will have unlimited civil liability. That means every partner can be sued even if only one of them commits an error in the course of business.
Limited Partnership Limited Partnerships (called Sociedad de Responsibilidad) are also permitted in Panama. They are governed by the Commercial Code and Law No. 24 of 1966. There may be from 2 to 20 partners with no restrictions as to their nationalities or domicile. Their Capital must be at least $2,000 up to $500,000. The names of the partners must be registered with the Public Registry Office including the amount of Capital each contributed. Each partner's civil liability for the Partnership's debts is limited to the amount subscribed to but unpaid. If the Partnership appoints an independent administrator, his/her name must also be registered. No meetings are required if the Partnership has 5 members or less. Otherwise, a meeting must be held at least once a year. There are no requirements for annual returns or filing of any accountings.
An alternative to a Sole Proprietorship is to create an Individual Limited Proprietorship (Empressa Individual de Responsibilidad Limitada). This is set up in the same manner as a Limited Partnership except having only one member. The individual transfers his/her assets to the business. Business civil liability is limited to the amount of the committed assets.
Civil Partnership A Civil Partnership (Sociedad Civil) is allowed by the Commercial Code and Law No. 24 of 1966. The liability of the partners is unlimited. This type of partnership is often selected by professionals such as lawyers and accountants.
Commandite Company The Commandite Company (Sociedad en Commandita) is a hybrid partnership and corporation also governed by the Commercial Code and Law No. 24 of 1966. At least one partner must have unlimited liability, while the liability of the limited partners is limited to the amount of capital subscribed. This type of legal structure is seldom used in Panama.
GOVERNMENT PERMITS & LICENSES Once you have either formed a Panamanian Corporation, or a Partnership, or are acting as a Sole Proprietor, you will need to register your business with the government before opening for business.
The 6 steps provided below are the requirements for registering your business with the national and local governments:
1. Income Tax Registry This is called "Registro Fiscal" with the Panamanian government. The Panamanian government has a website explaining what is necessary to register in Spanish. Go to the govt. website at: www.dgi.gob.pa This is the government Revenue (Tax) Service where your company receives its income tax id number called the Direccion General de Ingresos. You will need to keep records of income and expenses and file an annual income tax (or corporate tax) return and pay any taxes owed.
2. Commercial License Another Panama government website will give you information regarding getting a commercial license in Spanish at: www.mici.gob.pa This Ministry is called the MINISTERIO de COMERCIO e INDUSTRIAS, translated as the Ministry of Commerce & Industry. This is otherwise known as your Business License. Every business in Panama is required to have one.
3. Municipal Taxes After getting your Panamanian government licenses, you need to register with your local municipality in order to pay your municipal taxes.
4. Social Security Number Then you must go to the Registro Patronal de la Caja de Seguro Social (CSS) to get a Social Security number for your business and for yourself.
5. Sanitary Permit If your business deals with food or beverages, you will need to get Permisos Sanitarios with the Ministerio de Salud. That translates as a Health Certificate from the Ministry of Health for permission to operate a sanitary business. Every employee (including owners & management) who prepare or serve food or beverages (or are in the vicinity of food or beverage preparation or service) must obtain two different Permits. One requires a medical & dental examination at a public hospital. The other is issued after attending a two day health & safety course.
6. Fumigation Certificate Every business which is open to the public must be fumigated. You will need to hire a private fumigation company every four months to fumigate against ants, roaches, and other bugs. You must then present a receipt from the fumigation company and obtain a Fumigation Certificate from your local municipality. This must be publicly displayed at your business entrance.
Hiring Employees Now that you have obtained all of the required government permits and licenses, you are now ready to hire employees. For those of you thinking of hiring your expat buddies, Panama limits a company's work force to a maximum of 10% foreigners (non-Panamanian). Panamanian laws require that 90% of a company's employees be Panamanian citizens, or married to a Panamanian, or foreign persons residing here for at least 10 years.
But, there are exceptions:
1. Required technical or specialized staff unavailable in Panama increases your quota to 15% foreigners. You can also petition the Ministry of Labor for a higher quota.
2. Companies having less than 10 employees can employ 1 foreigner.
3. Companies can employ foreign Managers and Supervisors when the company does business abroad from Panama with prior approval by the Ministry of Labor.
You must obtain a work permit from the Ministry of Labor for every foreign worker.
Panama’s Labor Laws The Labor Code of 1971 deals with Labor Relations including the rights and duties of employers and employees. "Subordination" is the key concept of the law. Any relationship where one person is subordinate to another falls within the law. It makes no difference whether the relationship is or is not described as "employment".
There are certain basic employee rights which must be followed:
1. Written Employment Contract
2. Minimum Wage
3. Maximum Hours
4. Paid Vacation Time
5. Firing Employees
Employee Contracts You must have your employees sign a written employment contract called an Inscripcion Contratos con trabajadores. You must file two copies of the contract with the Ministerio de Trabajo y Desarrollo Laboral. Employers can easily terminate the employee during the first two years. After that, employees have greater protection under the law. The law lists "just causes" for dismissal. Unlawful dismissals can result in minimal compensation payments. Both parties can contract for "fixed terms". Minimum wage levels vary according to the employee's seniority.
Vacations: There are 11 public holidays per year. In addition, employees are entitled to a 30 day vacation every year. 13th Month: The law also requires a 30 day paid bonus every year which is known as "the 13th month". This bonus is estimated at one-salary day for every 11 days of work. The 13 month bonus is paid in 3 equal installments: April 15th, August 15th, and December 15th every year.
Unions Unions are allowed in Panama. Unions can collectively negotiate on behalf of the employees. Strikes are lawful under defined circumstances after a majority vote of the member employees. Conciliation is
Medical billing agencies take a lot of things for granted. They purchase a piece of DME software in order to do their daily billing and they expect everything to run perfectly. Well, in the real world, it isn't quite that simple. There is a lot of work that goes into putting out a piece of medical billing software. While we're not going to attempt to dive into this process in great detail, we're going to try to give you a decent idea of what goes into getting your DME software to you. In future installments, we'll cover this in more detail.The first step in the process is actually deciding what is going to go into the software itself. This is usually determined by the owners of the company, but frequently, the programmers have a big say in the final product because they may know what is and what isn't possible. Just because management wants something doesn't mean it's going to be done.The next step is to actually begin the design of the software itself. This involves specifications that are general as well as detailed. The software needs to be given an overall look to go along with the individual bells and whistles that it comes with.After the software is designed, piece by piece, each section is given to a QA person to test. It is their job to make sure that the section of the software that they are testing works the way it is supposed to, whether it be billing, printing forms, updating prices or whatever. Because medical billing software is so complex, a team of QA people are usually assigned to test it.If any bugs are found in the software through testing, the QA people send the software back to the programmers. This process continues until the software is found to be bug free.The software is then given to the support people to learn. The reason for this is because they are th
An alternative to a Sole Proprietorship is to create an Individual Limited Proprietorship (Empressa Individual de Responsibilidad Limitada). This is set up in the same manner as a Limited Partnership except having only one member. The individual transfers his/her assets to the business. Business civil liability is limited to the amount of the committed assets.
Civil Partnership A Civil Partnership (Sociedad Civil) is allowed by the Commercial Code and Law No. 24 of 1966. The liability of the partners is unlimited. This type of partnership is often selected by professionals such as lawyers and accountants.
Commandite Company The Commandite Company (Sociedad en Commandita) is a hybrid partnership and corporation also governed by the Commercial Code and Law No. 24 of 1966. At least one partner must have unlimited liability, while the liability of the limited partners is limited to the amount of capital subscribed. This type of legal structure is seldom used in Panama.
GOVERNMENT PERMITS & LICENSES Once you have either formed a Panamanian Corporation, or a Partnership, or are acting as a Sole Proprietor, you will need to register your business with the government before opening for business.
The 6 steps provided below are the requirements for registering your business with the national and local governments:
1. Income Tax Registry This is called "Registro Fiscal" with the Panamanian government. The Panamanian government has a website explaining what is necessary to register in Spanish. Go to the govt. website at: www.dgi.gob.pa This is the government Revenue (Tax) Service where your company receives its income tax id number called the Direccion General de Ingresos. You will need to keep records of income and expenses and file an annual income tax (or corporate tax) return and pay any taxes owed.
2. Commercial License Another Panama government website will give you information regarding getting a commercial license in Spanish at: www.mici.gob.pa This Ministry is called the MINISTERIO de COMERCIO e INDUSTRIAS, translated as the Ministry of Commerce & Industry. This is otherwise known as your Business License. Every business in Panama is required to have one.
3. Municipal Taxes After getting your Panamanian government licenses, you need to register with your local municipality in order to pay your municipal taxes.
4. Social Security Number Then you must go to the Registro Patronal de la Caja de Seguro Social (CSS) to get a Social Security number for your business and for yourself.
5. Sanitary Permit If your business deals with food or beverages, you will need to get Permisos Sanitarios with the Ministerio de Salud. That translates as a Health Certificate from the Ministry of Health for permission to operate a sanitary business. Every employee (including owners & management) who prepare or serve food or beverages (or are in the vicinity of food or beverage preparation or service) must obtain two different Permits. One requires a medical & dental examination at a public hospital. The other is issued after attending a two day health & safety course.
6. Fumigation Certificate Every business which is open to the public must be fumigated. You will need to hire a private fumigation company every four months to fumigate against ants, roaches, and other bugs. You must then present a receipt from the fumigation company and obtain a Fumigation Certificate from your local municipality. This must be publicly displayed at your business entrance.
Hiring Employees Now that you have obtained all of the required government permits and licenses, you are now ready to hire employees. For those of you thinking of hiring your expat buddies, Panama limits a company's work force to a maximum of 10% foreigners (non-Panamanian). Panamanian laws require that 90% of a company's employees be Panamanian citizens, or married to a Panamanian, or foreign persons residing here for at least 10 years.
But, there are exceptions:
1. Required technical or specialized staff unavailable in Panama increases your quota to 15% foreigners. You can also petition the Ministry of Labor for a higher quota.
2. Companies having less than 10 employees can employ 1 foreigner.
3. Companies can employ foreign Managers and Supervisors when the company does business abroad from Panama with prior approval by the Ministry of Labor.
You must obtain a work permit from the Ministry of Labor for every foreign worker.
Panama’s Labor Laws The Labor Code of 1971 deals with Labor Relations including the rights and duties of employers and employees. "Subordination" is the key concept of the law. Any relationship where one person is subordinate to another falls within the law. It makes no difference whether the relationship is or is not described as "employment".
There are certain basic employee rights which must be followed:
1. Written Employment Contract
2. Minimum Wage
3. Maximum Hours
4. Paid Vacation Time
5. Firing Employees
Employee Contracts You must have your employees sign a written employment contract called an Inscripcion Contratos con trabajadores. You must file two copies of the contract with the Ministerio de Trabajo y Desarrollo Laboral. Employers can easily terminate the employee during the first two years. After that, employees have greater protection under the law. The law lists "just causes" for dismissal. Unlawful dismissals can result in minimal compensation payments. Both parties can contract for "fixed terms". Minimum wage levels vary according to the employee's seniority.
Vacations: There are 11 public holidays per year. In addition, employees are entitled to a 30 day vacation every year. 13th Month: The law also requires a 30 day paid bonus every year which is known as "the 13th month". This bonus is estimated at one-salary day for every 11 days of work. The 13 month bonus is paid in 3 equal installments: April 15th, August 15th, and December 15th every year.
Unions Unions are allowed in Panama. Unions can collectively negotiate on behalf of the employees. Strikes are lawful under defined circumstances after a majority vote of the member employees. Conciliation is
Franchisees need to dismiss the notion that ‘royalty fees’ are an extra payment coming out of their pocket; they are a part of the process of partaking in the franchise system. It should be looked upon as the Franchiser share in profits derived from the consumer. The Franchisee gathers the royalty fee sum from the consumer along with the rest of the funds that keep the whole enterprise going.The royalty fee is another aspect of the business and no business would be in business if they were not making their money from the consumer. The consumer pays for the Franchisee’s overhead, costs of sales, salaries, and of course the profit. It all stems back to satisfying your consumer who ultimately pays for the business to run.The Franchisee should be happy to contribute back into the system that feeds them. A Franchisee should know that a stable, dominant, and flourishing Franchisor will only make the ‘name’ of the franchise stronger, creating more of a stir in the business and thus generating more potential consumers. If the root of your franchise remains strong, the whole system will follow suit including all Franchisees.The whole dynamic of the franchise is founded upon the Franchisor initially providing a desirable product and/or service to the consumer. The appeal of the Franchisee to become a part of the franchise is based on the success of the initial Franchisor. The Franchisee makes a solid business decision to engage into the ‘family’ of the franchise that appealed to them in the first place. The Franchisee carries on the tradition of the Franchisor. It is like an apprenticeship as far as the Franchisee emulating the Franchisor, but though the Franchisee does have some autonomy, their business still is directly effected by the ‘name’ of the initial Franchisor and this is why they collect a fee.<
3. Municipal Taxes After getting your Panamanian government licenses, you need to register with your local municipality in order to pay your municipal taxes.
4. Social Security Number Then you must go to the Registro Patronal de la Caja de Seguro Social (CSS) to get a Social Security number for your business and for yourself.
5. Sanitary Permit If your business deals with food or beverages, you will need to get Permisos Sanitarios with the Ministerio de Salud. That translates as a Health Certificate from the Ministry of Health for permission to operate a sanitary business. Every employee (including owners & management) who prepare or serve food or beverages (or are in the vicinity of food or beverage preparation or service) must obtain two different Permits. One requires a medical & dental examination at a public hospital. The other is issued after attending a two day health & safety course.
6. Fumigation Certificate Every business which is open to the public must be fumigated. You will need to hire a private fumigation company every four months to fumigate against ants, roaches, and other bugs. You must then present a receipt from the fumigation company and obtain a Fumigation Certificate from your local municipality. This must be publicly displayed at your business entrance.
Hiring Employees Now that you have obtained all of the required government permits and licenses, you are now ready to hire employees. For those of you thinking of hiring your expat buddies, Panama limits a company's work force to a maximum of 10% foreigners (non-Panamanian). Panamanian laws require that 90% of a company's employees be Panamanian citizens, or married to a Panamanian, or foreign persons residing here for at least 10 years.
But, there are exceptions:
1. Required technical or specialized staff unavailable in Panama increases your quota to 15% foreigners. You can also petition the Ministry of Labor for a higher quota.
2. Companies having less than 10 employees can employ 1 foreigner.
3. Companies can employ foreign Managers and Supervisors when the company does business abroad from Panama with prior approval by the Ministry of Labor.
You must obtain a work permit from the Ministry of Labor for every foreign worker.
Panama’s Labor Laws The Labor Code of 1971 deals with Labor Relations including the rights and duties of employers and employees. "Subordination" is the key concept of the law. Any relationship where one person is subordinate to another falls within the law. It makes no difference whether the relationship is or is not described as "employment".
There are certain basic employee rights which must be followed:
1. Written Employment Contract
2. Minimum Wage
3. Maximum Hours
4. Paid Vacation Time
5. Firing Employees
Employee Contracts You must have your employees sign a written employment contract called an Inscripcion Contratos con trabajadores. You must file two copies of the contract with the Ministerio de Trabajo y Desarrollo Laboral. Employers can easily terminate the employee during the first two years. After that, employees have greater protection under the law. The law lists "just causes" for dismissal. Unlawful dismissals can result in minimal compensation payments. Both parties can contract for "fixed terms". Minimum wage levels vary according to the employee's seniority.
Vacations: There are 11 public holidays per year. In addition, employees are entitled to a 30 day vacation every year. 13th Month: The law also requires a 30 day paid bonus every year which is known as "the 13th month". This bonus is estimated at one-salary day for every 11 days of work. The 13 month bonus is paid in 3 equal installments: April 15th, August 15th, and December 15th every year.
Unions Unions are allowed in Panama. Unions can collectively negotiate on behalf of the employees. Strikes are lawful under defined circumstances after a majority vote of the member employees. Conciliation is
You became a chiropractor because you have a passion for helping people. If you were like me when I was starting my acupuncture practice, you hoped that this passion would effortlessly magnetize a plethora of perfect patients to you. But then the reality of being a business owner started to sink in. You began to realize that your love for what you do had to be coupled with the right business skills to make your practice a viable business entity. In my experience, chiropractors tend to be much better at marketing their practices than other healthcare professionals. Many of them seem to have an instinct for getting and staying busy and making a lot of money in the process. But there are still many chiropractors out there who are struggling to make it. They can sense the potential for success, but they just can't seem to actualize it. They make less money and see fewer patients than they would like, all the while banging their head against the wall as to why things aren't working out the way they'd like. Over the past several years, I have gained a lot of knowledge on how to build a successful practice, both from doing it personally and from coaching a number of healthcare professionals. I have realized that there are two essential ingredients to practice success for all businesses. There needs to be a healthy balance between these two ingredients at all times; if one is lacking, then the business is sure to suffer. Eight out of ten small businesses fail within five years of start up because one of these ingredients is deficient or altogether missing. I encourage you to make a commitment to mastering both of these essential components to practice growth. By doing so, you should grow a booming practice quickly and easily. You will also attract the right patients, develop a strong word of mouth c
2. Companies having less than 10 employees can employ 1 foreigner.
3. Companies can employ foreign Managers and Supervisors when the company does business abroad from Panama with prior approval by the Ministry of Labor.
You must obtain a work permit from the Ministry of Labor for every foreign worker.
Panama’s Labor Laws The Labor Code of 1971 deals with Labor Relations including the rights and duties of employers and employees. "Subordination" is the key concept of the law. Any relationship where one person is subordinate to another falls within the law. It makes no difference whether the relationship is or is not described as "employment".
There are certain basic employee rights which must be followed:
1. Written Employment Contract
2. Minimum Wage
3. Maximum Hours
4. Paid Vacation Time
5. Firing Employees
Employee Contracts You must have your employees sign a written employment contract called an Inscripcion Contratos con trabajadores. You must file two copies of the contract with the Ministerio de Trabajo y Desarrollo Laboral. Employers can easily terminate the employee during the first two years. After that, employees have greater protection under the law. The law lists "just causes" for dismissal. Unlawful dismissals can result in minimal compensation payments. Both parties can contract for "fixed terms". Minimum wage levels vary according to the employee's seniority.
Vacations: There are 11 public holidays per year. In addition, employees are entitled to a 30 day vacation every year. 13th Month: The law also requires a 30 day paid bonus every year which is known as "the 13th month". This bonus is estimated at one-salary day for every 11 days of work. The 13 month bonus is paid in 3 equal installments: April 15th, August 15th, and December 15th every year.
Unions Unions are allowed in Panama. Unions can collectively negotiate on behalf of the employees. Strikes are lawful under defined circumstances after a majority vote of the member employees. Conciliation is mandatory before a strike can occur. However, only around 11% of the private sector employees are unionized.
Leasing Office or Business Premises Panama's laws regarding leasing commercial space is similar to most English speaking countries.
1. It needs to be in Writing.
2. It needs to properly describe the location of the pre-mises.
3. It needs to address the amount and frequency of the lease payments, length of the lease period, whether there is a Security and/or Damage deposit, who pays for gas, water, electricity, and repairs. It will also contain provisions for late rent payments, tenant property damage, and renewal of the lease term.
4. It must be signed by the property owners (or legally authorized representatives) and the tenants.
5. All signatures must be Notarized before a Notary Public.
There are many more terms and conditions which should be included in a standard commercial lease which is why you should consult with a Panamanian attorney before signing one prepared by your landlord.
Business Bank Account Even if you are a sole proprietor, you should never co-mingle your personal funds with business monies. That is why you'll need to open a bank account for your business. Partnerships and Corporations definitely need to open separate Business or Corporate Bank Accounts.
When you open an account for a corporation, partnership, or a business most banks require the following information and documentation:
1. Most banks require a personal interview, while some banks may allow a telephone interview.
2. A clear copy of the account's Signatory and each corporate Director's Passport (must include the photo & personal information page, and Panama entry stamp page).
3. A clear copy of a second photo id (such as a driver's license or national id card).
4. Two bank references for each Director and account Signatory. These references must entail the satisfactory conduct of the account holder and that the banking relationship had been ongoing for a minimum of 2 years. It would be helpful if the references also confirm the person's residential address. Many Panamanian banks require the references be specifically addressed to that bank's branch. Some banks may accept only one bank reference letter (especially if you have done all of your banking with only one bank).
5. Two professional references for each Director and account Signatory. These references may be written by one's accountant, lawyer, stock broker, insurance broker, real estate broker, or employer. They should be written on their company letterhead. These must include the duration and nature of their business relationship with the applicant. Only an Original letter will be accepted.
6. Proof of Address: You must provide a copy of a utility bill (phone, water, electricity, cable TV, or Internet service) which contains your name and address.
7. A "Company Profile" letter must be submitted which briefly describes the type of business the account holder will engage in. This will include the location of the business, the products or services you are selling, the nature and expected volume of business, the origin of the funds to be deposited, an estimate of the monthly or annual amount of funds to be deposited, and the reason for opening a bank account in Panama.
It will help if your Panamanian lawyer accompanies you to the bank in order to make sure the process goes smoothly.
Once all of these documents have been received, they will be forwarded to the bank's Compliance Officer who reviews the entire application to insure no money laundering will occur. This process will go smoother and may have less required documents if you first go to the Panamanian bank where you already have a personal account as they already know you.
Taxes Now that you are licensed, moved into your commercial space, hired employees and have a bank account; you need to worry about taxes.
Conclusion There are many legal documents, government applications, contracts, and laws one must comply with in order to start a business in Panama. That is why you should consult with a Panamanian lawyer who is knowledgeable with Panama's Business, Labor, Tax, and Real Estate laws before going into business.
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