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Micro, Small and Medium Business Regime - Panamá (AMPYME)
The tax legislation of the Republic of Panama, with respect to Micro, Small and Medium Enterprises (MSMEs), establishes a special regime for this type of company, which we will develop in the following points.
Laws 8 and 33 of 2000, which created the Micro, Small and Medium Enterprise Authority (AMPYME), were amended by Law 72 of November 2009.
The incentives that were established for those companies considered as microenterprises, are:
- Exempt from the payment of Income Tax, during the first two fiscal years after their registration with the Authority. Benefit granted to Micro enterprises.
- Participation in Business Development Programs.
- Exemption from the Special Fund for Compensation of Interest (FECI).
- Access to the Seed Capital Competitive Fund Program.
- Access to the Micro and Small Business Financing Program (PROFIPYME).
- Access to the Microcredit Financing Fund for MSMEs (FIDEMICRO-PANAMA).
- When participating in public events and in the case of a tie, the company that is registered in the Business Register of the institution will be granted the act.
It is important to note that for purposes of AMPYME, the following category ranges are established for those economic units, formal or informal, that generate gross income or annual turnover:
- Microenterprise up to B/.150,000.00
- Small enterprise from B/.150,000.01 and up to B/.1,000,000
- Medium company of B/.1,000,000.01 and up to B/.2,500,000.
If the company in some of these two years, exceeds B/.150,000.00 the income tax exemption incentive would no longer apply.
Additionally, it is necessary to mention that for the purposes of companies that are incorporated as micro-enterprises, they are considered to be those that comply with the following circumstances:
- That it does not result, directly or indirectly, from the division of a company into several legal entities, or that it is not affiliated, subsidiary or controlled by other legal entities.
- That the shares or participation quotas of the legal persons in question are nominative and that their shareholders or partners are natural persons.
- That the shareholders or members are not, in turn, shareholders or members of other micro, small or medium-sized enterprises.
To be eligible for these incentives, microenterprises must be registered in the AMPYME Business Registry, for which the registration requirements are as follows:
- Complete the registration application form.
- Simple copy of the passport and resident visa, in case the legal representative of the applicant company is a foreigner.
- Simple copy of the Certificate of Public Registry of Panama in case of a legal entity (with a validity of no more than three (3) months of having been issued).
- Simple copy of the Notice of Operation, which must describe the commercial activities carried out by the applicant.
- The activities exempted from obtaining a Notice of Operation, according to Law 5 of 2007, must submit for registration a copy of the document issued by the Ministry of Commerce and Industries that accredits the exception.
- A copy of the last Income Tax Return or Letter from an accountant (suitable) certifying the annual turnover (recently incorporated companies that have a Notice of Operation for the current year are excepted).
