Most of a startup’s legal problems do not come from a bad decision: they come from a decision made without information.
Startups and Entrepreneurship
What you will find here
The founder's path
Four stages, four different legal conversations. Scroll through the path, or jump straight to the stage your company is in today.
At this stage the main asset is not the company: it is the brand, the code, the data and the agreements among the people building the project. Almost everything lost at this phase is lost by not documenting in time.
- Check availability and register the trademark with DIGERPI (Industrial Property Registry) before public launch.
- Sign confidentiality agreements with developers, advisors and counterparties.
- Document the assignment of copyright in the code and design to the future company.
- Agree in writing on the split among founders, with vesting and exit rules.
- Determine whether the model touches a regulated activity (financial services, insurance, healthcare, education).
APPLICABLE LEGISLATION
Law 35 of 1996 and Law 61 of 2012 — Industrial property: trademarks, patents and utility models.
Law 64 of 2012 — Copyright and related rights: software protection.
Commercial Code — General regime for commercial acts and commercial obligations.
RED FLAG
Launching a brand before registering it is the most common mistake and the most expensive to fix: Panama follows the attributive system, where the right arises from registration and not from prior use.
Panama offers several corporate forms, and the choice shapes the tax burden, the ability to take investment and the speed of incorporation. There is no single answer: it depends on projected revenue, number of partners and capital plans.
- Compare the corporation (S.A.), the limited liability company (S. de R.L.) and the Entrepreneurship Company (SERL).
- Register the company with the Public Registry and obtain the Operating Notice (Aviso de Operación).
- NRegister with the DGI (tax authority), enable electronic invoicing and define the tax regime.
- Comply with the ultimate beneficial owner registry and the resident agent’s obligations.
- Draft the articles of incorporation and the shareholders’ agreement at the same time, not afterwards.
APPLICABLE LEGISLATION
Law 186 of 2020 — Entrepreneurship companies (SERL), implemented by Executive Decree 093 of 2021.
Law 32 of 1927 — Corporations regime.
Law 4 of 2009 — Limited liability companies.
Law 129 of 2020 — Private and single registry system for ultimate beneficial owners.
RED FLAG
The SERL is capped at US$1,000,000 in annual gross revenue and allows between 1 and 5 partners, all of them natural persons. Once the cap is exceeded, it must convert into another corporate form within six months.
How the first round is documented determines whether the second is possible. Raising funds from the public is also a regulated activity: the line between a private round and a public offering of securities is narrower than most people assume.
- Structure the round: equity contribution, convertible note or equivalent instrument.
- Check whether the raise requires registration with the Superintendency of the Securities Market (SMV).
- Prepare the data room and put the corporate file in order before due diligence.
- Negotiate governance: supermajorities, drag-along and tag-along rights.
- Assess the tax treatment of the investment and of an eventual investor exit.
APPLICABLE LEGISLATION
Consolidated Text of Decree Law 1 of 1999 — Securities market regime and the powers of the SMV.
SMV Agreements — Rules applicable to crowdfunding platforms and exempt offerings.
Tax Code — Treatment of contributions, dividends and capital gains.
RED FLAG
Offering equity to a broad and undetermined group of people may qualify as a public offering of securities and trigger registration obligations. This is worth confirming before opening the round, not after.
Scaling opens three fronts at once: people, data and special regimes. It is also the point at which accumulated non-compliance stops being an observation and becomes a liability priced into the next round.
- Formalize the employment relationship: contracts, payroll, occupational risk insurance and working hours.
- Implement the data protection program: privacy notice, consent and a data protection officer.
- Assess whether special regimes such as SEM or EMMA apply to regional expansion.
- Manage foreign talent immigration under the correct visa category.
- Review terms and conditions, privacy policy and contracts with clients and suppliers.
APPLICABLE LEGISLATION
Law 81 of 2019 — Personal data protection, in force since 29 March 2021 and implemented by Executive Decree 285 of 2021.
Law 41 of 2007 — Multinational Company Headquarters regime (SEM).
Law 159 of 2020 — EMMA regime for manufacturing-related services.
Labor Code — Panamanian labor regime and employer obligations.
RED FLAG
Processing personal data without a lawful basis or a privacy notice exposes the company before ANTAI and, increasingly, is a deal-blocking finding in due diligence.
Regulatory frameworks
The Panamanian regimes every founder should know. Six frameworks that define how an innovative business in Panama is incorporated, financed, protected and scaled. Expand each one to see who it applies to and what it requires.
Law 186 of 2020 · Executive Decree 093 of 2021 — In force
WHAT IT IS
A corporate form created specifically to formalize ventures, with simplified incorporation, a preferential tax regime, and liability limited to each partner’s contribution, whether paid or promised.
WHO IT APPLIES TO AND WHAT IT REQUIRES
- Between 1 and 5 partners, all natural persons.
- Capped at US$1,000,000 in annual gross revenue; once exceeded, it must convert into another corporate form within six months.
- Digital recording of income and expenses on the entrepreneurship platform.
- Electronic invoicing mandatory for all transactions.
- A person may not simultaneously be part of another entrepreneurship company; these companies are not publicly traded.
- References: Law 186 of 2020 · E.D. 093 of 2021 · MICI · Public Registry
Law 81 of 2019 · Executive Decree 285 of 2021 · Authority: ANTAI — In force
WHAT IT IS
Panama’s general personal data protection regime. It was adopted on 26 March 2019, entered into force on 29 March 2021, and was implemented by Executive Decree 285 of 28 May 2021. Supervision rests with ANTAI, through its Personal Data Protection Directorate.
WHO IT APPLIES TO AND WHAT IT REQUIRES
- To any company processing personal data of individuals in Panamanian territory, regardless of its size.
- Principles of lawfulness, purpose, proportionality, quality, security and confidentiality.
- A lawful basis for processing and a privacy notice accessible to the data subject.
- Handling of access, rectification, erasure, objection and portability rights.
- Appointment of a data protection officer and technical security measures.
- References: Law 81 of 2019 · E.D. 285 of 2021 · ANTAI · In force 29/03/2021
Draft Bill 314 of 2026 · Agreement 01-2026 of the SBP — Pending
WHAT IT IS
Draft Bill 314, introduced on 13 January 2026, proposes a comprehensive financial technology framework law: dedicated licensing for virtual asset service providers (VASPs), payment service providers (PSPs) and electronic money issuers (EMIs), together with a regulatory sandbox and anti-money-laundering expectations. In parallel, Agreement 01-2026 of the Superintendency of Banks, dated 16 January 2026, updates the AML framework it supervises.
WHAT IT COVERS
- A controlled testing environment with real users for up to 24 months, extendable by a further 12 months.
- A public registry of fintech companies administered by the Superintendency of Banks of Panama.
- Differentiated licence categories according to the type of service provided.
- Anti-money-laundering and counter-terrorist-financing obligations.
- References: Draft Bill 314 · 13/01/2026 · Agreement 01-2026 SBP · Superintendency of Banks · Subject to change
Law 41 of 24 August 2007, as amended — In force
WHAT IT IS
A special regime created to attract investment, generate employment and promote technology transfer. An SEM is a company that, from Panama, provides the services defined in the law to its parent company, subsidiaries, affiliates or associated companies.
WHY IT MATTERS TO A SCALING STARTUP
- Allows corporate services for the regional group to be centralized from Panama.
- Provides tax, labor and immigration incentives subject to meeting requirements.
- Requires a licence granted by the Multinational Headquarters Licensing Commission.
- Worth considering once the operation already has a presence in several countries.
- References: Law 41 of 2007 · SEM Licensing Commission · MICI
Law 159 of 31 August 2020 · Executive Decree 33 of 2021 — In force
WHAT IT IS
A special regime aimed at attracting and promoting the production or transformation of materials, the creation of products or components, and their logistics, development and research. It was created by Law 159 of 31 August 2020.
MAIN REQUIREMENTS
- The articles of incorporation must state that the main purpose is to operate under Law 159 of 2020; an existing company must amend them.
- Duly audited consolidated financial statements of the corporate group.
- Bank reference letter, shareholder certification and group organizational chart.
- Requirements set by the Licensing Commission through Resolution 039-20 of 23 December 2020, implemented by Executive Decree 33 of 4 February 2021.
- References: Law 159 of 2020 · Resolution 039-20 · E.D. 33 of 2021 · MICI
Consolidated Text of Decree Law 1 of 1999 · SMV Agreements — In force
WHAT IT IS
The body of rules governing the raising of funds from the public in Panama, supervised by the Superintendency of the Securities Market. It covers the general public offering regime and the rules applicable to crowdfunding platforms.
WHAT A STARTUP SHOULD CONFIRM
- Whether the round’s structure constitutes a public offering of securities.
- Whether a registration exemption applies and on what conditions it is maintained.
- Disclosure obligations to investors before and after closing.
- The requirements that apply when raising funds through a crowdfunding platform.
- References: C.T. Decree Law 1 of 1999 · SMV · SMV Agreements
In depth, regulatory sandboxes: innovating within the law, not in spite of it.
A regulatory sandbox is a controlled testing environment where a company can develop and test an innovative business model with real users, under the regulator’s supervision and with rules scaled to the size of the experiment. For a fintech startup, it is the difference between waiting years for a suitable licence to exist and being able to operate while the framework matures.
CURRENT STATUS IN PANAMA
The sandbox is contemplated in Draft Bill 314, introduced on 13 January 2026. As a measure still before the legislature, its final content may change. This section is updated as the debate progresses.
- Application — The company presents its model to the regulator: what innovation it brings, what risks it creates and how it intends to mitigate them.
- Admission and perimeter — The scope of the test is defined: number of users, transaction volume, duration and required safeguards.
- Supervised operation — The model operates with real customers, reporting results and incidents to the supervisor at regular intervals.
- Exit — Once the test concludes, the company moves to a standard licence, adjusts the model, or winds down in an orderly manner.
Proposed testing window — Up to 24 months of operation in the controlled environment, with the possibility of a further 12-month extension.
Bar labels: 24 MONTHS — INITIAL PERIOD · +12 — EXTENSION · Start · Month 24 · Month 36
Preliminary legal assessment
What does your startup need to resolve now? Four questions, under a minute. At the end you will see the frameworks that likely apply to your case and where to start.
These are the legal frameworks that will likely apply to you
This is a preliminary result based on your answers. It is not a substitute for an analysis of the specific case.
01.
Fintech and regulatory sandbox.
Draft Bill 314 of 2026
Your model may require a VASP, PSP or EMI license. It is worth tracking the bill’s progress and preparing for the anti-money-laundering framework.
02.
Personal Data Protection
Law 81 of 2019
You will need a privacy notice, a lawful basis, a procedure for handling data subject rights, and a data protection officer before ANTAI.
03.
Securities market and crowdfunding
You should confirm whether the round’s structure constitutes a public offering of securities and whether a registration exemption applies before the SMV.
04.
Entrepreneurship Company (SERL)
Law 186 of 2020
A simplified vehicle with a preferential tax regime, up to 5 partners who must be natural persons, and a US$1,000,000 annual gross revenue cap.
05.
Incorporation and corporate structure
Choice of vehicle, articles of incorporation, shareholders’ agreement, Operating Notice, tax registration and ultimate beneficial owner.
06.
SEM and EMMA special regimes
If you centralize services for a regional group, the regimes under Law 41 of 2007 and Law 159 of 2020 may offer tax, labor and immigration benefits.
07.
Intellectual property and founder agreements
Trademark registration with DIGERPI, assignment of rights in the development, and a founders’ agreement with vesting and exit rules.
08.
Labor and immigration
Ley 186 de 2020
Formalizing contracts, payroll, occupational risk insurance, and the visa categories that apply when hiring foreign talent.
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