Countries › Panama › Guide › 15. Exiting › Selling the business or its assets: shareholder approval, employer substitution and filings

Selling the business or its assets: shareholder approval, employer substitution and filings

Last verified: 2026-10-29 · Status: Stable

A sociedad anónima may sell all or part of its assets, including goodwill and franchises, on a board resolution authorised by a majority of voting shares. If the buyer takes over the business, existing employment relationships continue and the seller remains jointly liable with the buyer for prior labour obligations for one year from written notice to the workers. The seller must report asset transfers to the tax registry and update its Aviso de Operación, and then distributes or dissolves.

Panama's currency, the balboa (B/.), is at par with the US dollar, which circulates freely as legal tender; the Superintendencia de Bancos states that the balboa's value is on a par with the US dollar (checked 29 October 2026). USD figures therefore equal the balboa figures.

Key facts

Seller's joint liability for prior labour debts after a business transfer	1 yearsCódigo de Trabajo art. 14, as of 2026-10-29 · in force
Deadline to notify workers of an employer substitution	15 daysCódigo de Trabajo art. 14, as of 2026-10-29 · in force
Exchange rate used for USD conversions	1 PAB per USDBalboa at par with the US dollar (Superintendencia de Bancos), as of 2026-10-29 · in force

The rule

1. Any sociedad anónima may, by board resolution, sell, lease, exchange or otherwise dispose of all or part of its assets, including clientele, privileges, franchises and rights, on the terms the board considers convenient, if authorised by the holders of a majority of voting shares in a meeting called for that purpose or by their written consent; the pacto social may require consent of any class of shares. Unless the pacto social provides otherwise, no shareholder vote is needed to place assets in trust or pledge or mortgage them to secure company debts.Ley 32 de 1927, arts. 68 to 70, 1927-02-26 official text · verified 2026-10-29

2. Any change in the legal or economic structure of the business or substitution of the employer does not affect existing employment relationships to the workers' detriment. The former employer is jointly liable with the new employer for obligations arising before the substitution for one year from the written notice to workers and unions, which must be given within 15 days of the substitution; without notice, joint liability continues until it is given.
Example: A shop sold on 1 March and notified to staff on 10 March: the seller remains jointly liable for prior labour debts until 10 March of the following year. / Same rule for any amount.Código de Trabajo, art. 14, 1971-12-30 official text · verified 2026-10-29

3. A worker with a labour credit may claim payment directly from the acquirer of the establishment's assets if the transfer was made through simulated or fraudulent acts; the action lapses one year after physical delivery.Código de Trabajo, art. 15, 1971-12-30 official text · verified 2026-10-29

4. Taxpayers must report to the Registro Único de Contribuyentes any change that may alter their tax liability, including transfer or assignment of assets and cessation of activities.Ley 76 de 2019, Código de Procedimiento Tributario, art. 200, 2019-02-13 official text · verified 2026-10-29

5. Any change in the Aviso de Operación and the cessation of operations must be notified to PANAMAEMPRENDE within 30 days.Ley 5 de 2007, art. 12, 2007-01-11 official text · verified 2026-10-29

6. When the sale proceeds are distributed, dividend tax applies at 10 percent on Panamanian source profits, and capital can be returned only after all retained earnings are distributed and dividend tax paid.
Cost to do it: 10 percent of distributed local profits, including the gain on the asset sale.Código Fiscal art. 733 literal a as worded by Ley 8 de 2016 art. 63 and parágrafo 1 as worded by Ley 27 de 2015 art. 5, art. 733, 2016-04-04 official text · verified 2026-10-29

Worked example

A Panamanian S.A. sells its distribution business to a competitor for B/.2,000,000; the 20 employees move to the buyer.
The board approves, and the sole shareholder consents in writing under Ley 32 art. 68.
Staff and the union receive written notice within 15 days; the seller stays jointly liable for prior labour debts for one year.
The seller reports the transfer to the RUC, updates its Aviso de Operación within 30 days, then distributes the proceeds subject to dividend tax or dissolves.

Step by step

Get board and majority shareholder approval, checking class consent rules in the pacto social.
Agree which employees transfer and give written notice within 15 days of the substitution.
Allocate labour, tax and other pre closing liabilities in the contract, given the one year joint liability.
Report the transfer to the RUC and update or cancel the Aviso de Operación within 30 days.
Distribute proceeds or proceed to dissolution.

Common traps

Without the written notice to workers, the seller's joint liability does not start running out.
Transfers through simulated or fraudulent acts let workers sue the acquirer directly.
The gain on the sale is profit of the company; paying it out bears dividend tax.

Sources

← Selling shares of a Panamanian company: 10 percent capital gains tax, the 5 percent buyer withholding and the transfer formalitiesMergers and moving a company out of Panama: consolidation of S.A.s, SRL mergers and continuation abroad →

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