Procedure for the Closing of Business Operations

Companies are currently in dire need of closing their operations due to the economic impact that the health crisis has triggered.

To carry out the formal closure of a company and avoid future taxes being generated, the following procedures must be completed at the following institutions:

  1. Public Registry: as it is a legal entity, the company must be dissolved, for which the following must be carried out:
  • Act of dissolution and liquidation of the company;
  • Filing of the Shareholders’ Meeting Minutes, which authorizes the dissolution and liquidation of the company.
  • After its registration, the dissolution of the company must be published in a nationwide coverage media, or in the Official Gazette in accordance with Article 527 of the Commercial Code, in accordance with article 82 of Law 32 of 1927 on Public Limited Companies.

2. General Directorate of Internal Trade of the Ministry of Commerce and Industry:  Through the computer platform “PANAMA EMPRENDE” the operation notice must be canceled.  This process has no cost.

3. Fiscal Surveillance Department of the Municipality of Panama:  To request the definite closing, the following requirements must be completed:

  • Request of the definite closing of the business, addressed to the Municipality Treasurer, in original and two copies, signed by the owner of the company.
  • Copy of ID of the Legal Representative of the Company.
  • Valid original certificate from the Public Registry or authenticated copy (Notary)
  • Copy of the operations notice indicating that it is cancelled.
  • Evidence on which the request is based.
  • Municipality good standing certificate and copy of the last payment receipt for the current month, with the updated account statement.
  • Original and two copies of the sketch of the location of the commercial establishment (must include the township, urbanization, neighborhood, street, street number, local or residence number, building and apartment or commercial plaza number and at least two reference points).

4. Panama Tax Authority of the Ministry of Economy and Finance:  National tax obligations must be canceled. Mainly, business license tax and income tax and submit the declaration of closure or non-operation through the company’s accountants via the online platform Etax2

5. Social Security Fund:  After terminating the employees, the employer must notify the Social Security Fund of the Cessation of Operations of the company no later than thirty calendar days after submitting the accounts of the company with zero balance,  through the cessation request form that can be downloaded at the page, providing the following documentation:

  • Copy of ID of the Legal Representative or his/her Attorney.
  • Income Statement for the last year of the company’s operations and receipt form.
  • Copy of the payroll declaration where termination of the employees was informed.
  • Copy of the breakdown of the termination payment, with a copy of the employee’s ID.
  • Copy of notices of departures and news.
  • In case of previous not-reported suspensions to the Institution, they must prepare a note indicating the dates of these suspensions.
  • Sketch of the company’s location.