Commercial Security Deposits in Panama
Rules in Panama regarding corporate mercantile deposits, surety instruments, and bonds that act on leases for offices and local retail.
Legal Disclaimer
This content is for general informational and educational purposes only. It does not constitute legal advice and should not be relied upon as such. Laws change frequently — always verify current regulations and consult a licensed attorney in your jurisdiction for advice specific to your situation. Landager is a property management platform, not a law firm.Information last verified: May 2026.
The legal framework for commercial security deposits in Panama is governed by Law 93 of 1973 (as amended) and Executive Decree No. 7 of 1995. While commercial leases are excluded from rent control and mandatory term extensions under Executive Decree No. 7 of 1995, this exclusion does not apply to security deposit requirements. According to Article 1 of Law 93, the mandate to consign a security deposit is a matter of "public order" and applies to all commercial leases regardless of the rent amount. Every tenant is legally obligated to consign a sum equal to exactly one month's rent to the Ministry of Housing and Territorial Planning (MIVIOT).
Under Law 259 of 2021, these deposits must be held in a separate account at the Banco Nacional de Panamá or the Caja de Ahorros. Furthermore, all commercial lease contracts must be executed on official MIVIOT forms and registered with the General Directorate of Leases within five (5) business days of signing. Failure to comply with these registration and consignment requirements can result in fines up to ten times the monthly rent.
Amounts and Statutory Limits for the Commerce Sector
While Law 93 (Art. 13) strictly limits the official "Security Deposit" to exactly one month's rent, Panamanian law allows for contractual freedom regarding additional financial protections. Because commercial tenancies often involve extensive fit-outs or higher operational risks, landlords frequently negotiate additional "Performance Bonds" (Fianzas de Cumplimiento) or bank guarantees.
These additional instruments are governed by the Civil and Commercial Codes rather than Law 93. They are held privately by the landlord or a financial institution and do not replace the mandatory one-month MIVIOT deposit. It is common for large-scale commercial surfaces or multinational hubs to require these additional guarantees in multiples of 2, 3, or 6 months' rent to cover potential breaches or extraordinary operational costs.
Additional Tools and Performance Bonds
Building owners often prefer to use various credit or documentary instruments to supplement the mandatory MIVIOT deposit and cover broader corporate risks:
- Irrevocable Bank Surety Policies: Issued by local banks to guarantee lease compliance.
- Bills of Exchange or Promissory Notes: Often required from parent companies or empowered guarantors for summary enforceability.
- Performance Bonds: Specifically designed to cover "fit-out" removals or unauthorized structural changes.
The application of these resources is validated by the Panamanian Civil Code for summary enforceability in cases of repeated non-payment or documented breaches of contract. All such requirements must be meticulously drafted in the lease agreement, detailing the specific exceptions and conditions under which deductions or executions of these private guarantees will occur.
Back to Panama Commercial Leases Overview.
Sources & Official References
Frequently Asked Questions
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The rental market in Panama is primarily regulated by Law 93 of October 4, 1973. This foundational law is currently undergoing a modernization process by the Ministry of Housing and Territorial Planning (MIVIOT) to adapt to the 2026 real estate market. This guide covers the essential compliance requirements for property owners and landlords.
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Panama has rules governing how much landlords can charge as a security deposit, how deposits must be held or protected, and the timeline for returning deposits after a tenancy ends. Landlords must provide itemized statements of any deductions and comply with all statutory deadlines to avoid penalties.
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Panama has specific rules regarding late fees and penalties for overdue rent. These may include mandatory grace periods, caps on late fee amounts, and restrictions on interest charges. Late fee provisions should be clearly stated in the lease agreement and must comply with local regulations to be enforceable.
Read the complete guide▶What property disclosures are landlords required to make in Panama?
Landlords in Panama must disclose relevant information about the property to prospective tenants before the lease is signed. Required disclosures typically include known material defects, environmental hazards, previous damage history, and any conditions that could affect the tenant's use and enjoyment of the property.
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