Why Choose Panama for Company Formation?
Panama suits founders who want a low-cost, fast-to-incorporate corporate vehicle with territorial taxation and full foreign ownership, rather than EU market access. The Sociedad Anónima (SA), governed by Law 32 of 1927, is the standard structure, supported by a flat US$300 annual franchise tax and resident-agent incorporation in days.[1][6]
Panama’s value is structural, not promotional. It taxes only Panama-source income, so a non-resident-owned company that earns abroad pays no Panamanian income tax on that income, only the annual franchise tax and a non-operational declaration.[6] Foreign owners hold 100% of shares, directors, and officers may be non-resident, and the founder never needs to travel to Panama.
The trade-off is honest and worth stating early. Panama is a recognised corporate jurisdiction, but it is not an EU or EEA entity, it grants no passporting, and, as of September 2026, crypto activity is unlicensed rather than licensed. The editorial reality is that Panama is strongest as a holding and operating vehicle and as a base for online gaming, and weakest where a counterparty expects an EU footprint.
Territorial Taxation, Not a Zero-Tax Label
Panama does not exempt all income; it taxes Panama-source income at 25% and exempts foreign-source income.[6] Source turns on where the activity is carried out, not on where the client is: a company whose work is done outside Panama owes no Panamanian income tax on that income, while work done in Panama is Panama-source even for a foreign client. Whether the company must register for VAT (ITBMS) depends on its activity and on the turnover threshold. Unlike Costa Rica, which applies the same territorial principle but at a 30% headline rate on local income, Panama’s local rate is 25%.[6][20]
Speed and Full Foreign Ownership
Incorporation runs through a resident agent and completes in 4 to 10 business days once know-your-client checks clear, the sum of the filing steps below.[4] There is no minimum paid-up capital and no nationality or residency restriction on shareholders, directors, or officers.[2] In practice, the binding constraint on timeline is not the registry but the agent’s due-diligence pack, which must be complete before filing.
A Genuinely Low Cost Floor
The headline government cost is a single US$300 annual franchise tax (tasa única) for corporations and SRLs.[6] Unlike the British Virgin Islands, where the equivalent annual government fee is US$550 for a standard company, Panama’s franchise tax is lower. On top of it sits the resident agent that the law requires, whose fee may not fall below US$250 a year, as the Costs section details.[29]
Entity Types Under Panama Law
Panama law defines several vehicles, but two matter for international owners: the Sociedad Anónima (SA), the classic corporation under Law 32 of 1927, and the Sociedad de Responsabilidad Limitada (SRL) under Law 4 of 2009.[1][2] The SA is the standard structure and the only vehicle accepted for an online-gaming licence.
The SA is share-based and the default for almost all international structuring. It requires three directors and three officers (President, Secretary, Treasurer), who may be the same people, of any nationality, resident anywhere.[2] The SRL is member-based and increasingly used by United States owners who want pass-through treatment under US check-the-box rules; its members are filed, so it is less anonymous than an SA.[2]
Definition: Sociedad Anónima (SA)
Panama’s standard corporation, governed by Law 32 of 1927. No minimum paid-up capital (US$10,000 customary authorised). Minimum three directors and three officers, who may be non-resident and may be the same individuals. Corporate directors are permitted. It is the required vehicle for a Junta de Control de Juegos online-gaming licence and the standard vehicle for holding and operating structures.[1][2]
| Entity | Min. Capital | Directors / Members | Online Registration | Used For |
|---|---|---|---|---|
| Sociedad Anónima (SA) | None (US$10,000 customary authorised) | 3 directors + 3 officers; non-resident permitted; corporate directors permitted | Via resident agent | Standard vehicle; required for online gaming; holding and operating structures |
| Sociedad de Responsabilidad Limitada (SRL) | None | 2+ members; managers | Via resident agent | US-facing owners seeking pass-through treatment; members are filed |
| Private Interest Foundation (Fundación de Interés Privado) | US$10,000 patrimony | Council of 3 (or 1 corporate) | Via resident agent | Asset-holding and estate planning, not trading |
| Branch of a foreign company | Declared parent capital | n/a | Via resident agent | Local presence of an existing foreign entity; taxed on Panama-source income |
The common mistake is choosing the SRL for its US tax treatment without accounting for the member-disclosure trade-off; owners who prioritise confidentiality default to the SA and use nominee officers, which is a long-standing Panamanian practice because the three directors appear on the public register.[2]
Formation Process
Forming a Panama company is a resident-agent process: a Panamanian lawyer or law firm drafts and notarises the charter (escritura pública) and registers it at the Registro Público de Panamá. Once due diligence clears, the filing steps below take 4 to 10 business days; apostilles and banking add further time, so the path to an operating company is several weeks.[4]
What You Need to Prepare
| Document / Item | Details | Notes |
|---|---|---|
| Passport (certified copy) | For each director, officer, and beneficial owner | Notarised; apostilled where used abroad |
| Proof of residential address | Utility bill or bank statement, within 3 months | One per individual |
| Professional or bank reference | Standard resident-agent KYC | One per beneficial owner |
| Source-of-funds summary | Origin of capital and business rationale | Increasingly requested at onboarding |
| Company name (pre-checked) | Must carry an SA / Corp / Inc designator | Reservable 30 days, renewable |
| Registered office | The resident agent’s address by default | Mandatory |
| Beneficial-ownership data | For the resident agent’s UBO filing | Filed within 15 business days of incorporation |
| Power of attorney | If the agent signs on the founder’s behalf | Notarised and apostilled |
Panama is a party to the Hague Apostille Convention (effective ), so documents from other member states are apostilled rather than consularised.[18] Certified copies are commonly accepted within 3 months of issue.
Engage the Resident Agent
A Panamanian lawyer or law firm is mandatory and performs KYC on owners, directors, and signatories before anything is filed.[4][7]
Name Check and Charter Drafting
The agent reserves the name and drafts the charter (pacto social). The name must include a corporate designator.[2]
Notarisation
The charter is protocolised as an escritura pública before a Panamanian notary.[4]
Registration at the Registro Público
The entity acquires legal personality on registration. The founder need not be present.[4]
Post-Registration
RUC tax identification, an Operation Notice (Aviso de Operación) if operating in Panama, beneficial-owner filing, and bank or payment-account onboarding. This is where the formation connects to the banking challenge in the Banking section.[4]
Requirements
Panama’s formation requirements are light on capital and ownership but firm on the resident-agent gateway and beneficial-owner reporting. There is no minimum paid-up capital and 100% foreign ownership is permitted, but every company must appoint a Panamanian lawyer or law firm as resident agent, and beneficial-owner data must be filed.[2][8]
| Requirement | Standard SA | For an Online-Gaming Licence |
|---|---|---|
| Min. Directors | 3 | 3 |
| Corporate Directors | Permitted | Permitted |
| Foreign Ownership | 100% | 100% |
| Min. Share Capital | None | None for the SA; gaming-licence financials apply separately |
| Registered Office | Required (resident agent) | Required |
| Resident Agent | Mandatory (Panamanian lawyer or firm) | Mandatory |
| UBO Disclosure | To the private register via the agent | Plus regulator fit-and-proper |
| Nominee Directors / Officers | Permitted (common) | Subject to regulator scrutiny |
| Annual Franchise Tax | US$300 (tasa única) | US$300 plus gaming-licence fees |
Registered Office and Resident Agent
Every Panamanian entity must appoint a resident agent who is a Panamanian lawyer or law firm; this is the mandatory gateway through which incorporation, the beneficial-owner filing, and the annual provision of accounting records all flow.[2][7][8] Losing the agent without appointing a replacement leads to suspension of the company. The agent’s fee may not be less than B/.250 (US$250) a year under the Supreme Court’s minimum tariff for lawyers, and agents may charge more, so it is a recurring cost quoted per case, not a one-off.[29]
Beneficial-Ownership Disclosure and Nominees
Under Law 129 of 2020, the resident agent files beneficial-owner data to a private, restricted-access register at the Superintendence of Non-Financial Subjects within 15 business days of incorporation; the company must report any change to its agent within 15 business days, and the agent updates the register within 5 business days of receiving it.[8] The register is not public, which is why the older claim that a Panama company is fully anonymous is outdated: ownership is recorded and accessible to competent authorities, even though it is not publicly searchable.
Bearer shares still exist in statute but are immobilised under Law 47 of 2013: certificates must be deposited with an authorised custodian, so they no longer confer anonymity.[23]
Costs and Pricing
A Panama company costs US$300 per year in government franchise tax (tasa única), but the franchise tax is not the whole of what the law requires.[6] Every company must also appoint a resident agent, who must be a Panamanian lawyer or law firm, and maintain a registered office, which is the agent’s address by default. Counting both, the known floor is US$550 a year: US$300 of franchise tax and the US$250 minimum that the lawyers’ fee tariff sets for a resident agent, which agents may exceed.[29] In Year 1 the Registro Público also charges B/.10 to qualify and B/.50 to inscribe the charter on the first B/.10,000 of capital, and collects the first franchise tax with them, so the Year-1 floor is US$610.[28][30]
Government Fees
| Fee Item | Amount (USD) | Notes |
|---|---|---|
| Registro Público qualification and inscription of the charter (one-off) | 60 on US$10,000 of capital | B/.10 + B/.50, plus B/.0.75 for each further B/.1,000.[28] |
| Annual franchise tax (tasa única), SA or SRL | 300 / year | First payment at inscription; later payments due 15 July (Jan–Jun inscriptions) or 15 January (Jul–Dec). As of .[25] |
| Late franchise-tax surcharge | 50+ | Escalates with continued non-payment.[6] |
| Reactivation after suspension | 1,000 fine + 25 registry duty | Plus the unpaid franchise tax and provision of accounting records.[25] |
| Operation Notice tax (if operating in Panama) | 2% of equity (min 100 / max 60,000) | Only for Panama-based activity.[6] |
Total Cost Summary
| Line Item | Amount (USD) |
|---|---|
| Registro Público qualification and inscription, one-off (on US$10,000 of capital) | 60 |
| Government franchise tax (tasa única), first collected at inscription, then annual | 300 |
| Resident agent, annual (required by law; tariff minimum, agents may charge more) | 250 minimum |
| Registered office (the agent’s address by default) | No separate statutory charge |
| Defensible Year 1 floor | 610 plus the agent’s quote above the minimum and the notary |
| Annual Ongoing floor (Year 2+) | 550 plus the agent’s quote above the minimum |
Taxation
Panama operates a territorial tax system: only Panama-source income is taxed, at a 25% corporate rate, while foreign-source income is exempt.[6] A non-resident-owned company earning abroad pays no Panamanian income tax on that income.
Panama has not enacted domestic Pillar Two legislation; the OECD Global Minimum Tax (GloBE) applies to multinational groups with consolidated revenue of at least 750 million euros, a threshold unlikely to affect standalone Panama-domiciled companies.
| Tax Type | Rate | Notes |
|---|---|---|
| Corporate income tax | 25% (territorial) | Panama-source income only; 0% on foreign-source income. As of .[6] |
| VAT (ITBMS) | 7% | Registration threshold ~US$36,000 turnover; foreign-facing services generally outside scope.[6] |
| VAT on crypto services | Out of scope where foreign-source | No bespoke crypto VAT rule; Panama-source supplies follow the 7% standard.[6] |
| WHT on dividends | 10% (Panama-source profits); 5% (foreign-source, export, or exempt profits) | Only where the company holds an operations notice (Aviso de Operación), sits in a free zone, or earns Panama-source taxable income; otherwise not due.[6] |
| WHT on interest | 12.5% effective (25% on 50%) | On payments to non-residents.[6] |
| WHT on royalties | 12.5% effective | On payments to non-residents.[6] |
| Social security (CSS) employer | On Panama payroll only | No Panama payroll means no CSS.[6] |
| Capital gains | 10% (general) | Specific mechanisms for real estate.[6] |
CRS and CARF Reporting
Panama is a CRS participant and reports automatically to partner jurisdictions.[6] On , Panama signed the OECD Crypto-Asset Reporting Framework multilateral agreement (CARF-MCAA), and the OECD Global Forum’s commitment list of 14 September 2026 places it among the jurisdictions undertaking first CARF exchanges by 2028.[13] In practice, this means owners remain reportable in their country of tax residence: Panama’s territorial system reduces Panamanian tax, not home-country reporting.
Substance: No General Regime, and a 2027 Rule for Group Entities
Panama does not operate a British Virgin Islands or Cayman-style economic-substance regime for every company. A standalone SA or SRL that is not part of a multinational group files no substance return and faces no core-income-generating-activity test. That changes for group entities: from fiscal periods starting in 2027, Law 526 of 2026 requires a Panama entity that belongs to a multinational group and earns foreign-source passive income (dividends, interest, royalties, capital gains, or rental and other capital income) to show adequately paid qualified staff and premises, strategic decision-making, and operating costs in Panama, or pay a flat 15% on that net income. Under Article 707-E, qualifying equity-holding and real-estate-holding entities need only meet the staff-and-premises condition and the reporting duty; under Article 707-I, income from Panama-registered intangible assets is exempt only to the extent of a separate asset-by-asset ratio of qualifying Panama development costs, uplifted by 30% and capped at total costs, to the asset's total costs; and Article 707-N excludes, on conditions, specified Panama-authorised and supervised financial and insurance entities for passive income derived from their regulated activities.[24] Separately, the opt-in Multinational Headquarters regime (Sede de Empresa Multinacional, SEM, under Law 41 of 2007), grants a 5% service-income rate but requires qualified full-time staff and real operating expenditure in Panama, so it does not suit a plain holding or operating shell.[6][17] Unlike BVI and Belize, both of which impose economic-substance obligations on every in-scope company, Panama imposes none on a standalone company.
Banking
Panama company formation does not come with easy banking. Opening a local account for a non-resident-owned crypto, fintech, or high-risk entity is difficult, and has become harder since the Panama Papers and the 2019 to 2023 FATF grey-listing period drove correspondent-bank de-risking. Plan for a documented, pre-qualified onboarding, not a same-week local account.
Local appetite for non-resident crypto, gaming, and remittance businesses is low, and applicants should expect extensive enhanced due diligence. Where a local account is impractical, the practical stack uses non-resident-friendly institution types elsewhere: European-licensed electronic money institutions offering multi-currency IBANs with 2 to 4 week onboarding for well-documented offshore corporates, and specialist commercial or private banks in non-resident-friendly jurisdictions accustomed to Latin-America-linked structures.
Documentation typically required is apostilled corporate documents, a certificate of good standing, source-of-funds evidence, a business plan, and beneficial-owner KYC. The real constraint is not incorporation; it is securing banking that survives a compliance review, which is why onboarding should begin in parallel with formation, not after it.
Two further frictions are worth stating plainly. First, Panama remains on Annex I of the EU list of non-cooperative jurisdictions for tax purposes at the Council’s latest revision, of ,[19] even though it cleared the FATF grey list in October 2023 and left the EU anti-money-laundering high-risk list with effect from 5 August 2025;[11][12] EU member states coordinate defensive tax measures against Annex I jurisdictions. Second, banking timelines of 4 to 12 weeks are normal for a non-resident crypto or high-risk profile and should be budgeted into any launch plan.
Jagelski & Partners’ banking partner network spans institutions across Europe and other non-resident-friendly jurisdictions, through which businesses placed more than fourteen billion euros in client turnover across banking and electronic-money relationships in 2025. Jagelski & Partners is paid by the institution, not by the client, and does not charge an onboarding fee. Banking is the critical next step after a Panama incorporation: see the banking service for how onboarding is pre-qualified across the network.
Annual Compliance
Every Panama company has ongoing obligations regardless of activity: the US$300 annual franchise tax, accounting-records maintenance, and annual provision to the resident agent, and beneficial-owner reporting. Non-payment and non-compliance carry penalties, suspension of corporate rights, and eventual strike-off. Dormant companies are not exempt from the franchise tax.[6][9]
Annual Franchise Tax (Tasa Única)
The franchise tax is US$300 per year for every SA and SRL, due 15 July for January-to-June incorporations and 15 January for July-to-December incorporations.[6] Late payment triggers a US$50 surcharge and escalating penalties; this applies to dormant companies too, since the tax is a flat franchise charge, not an income tax.[6][9]
Accounting Records (Law 254 of 2021)
Companies must keep accounting records and supporting documents for 5 years and, under the 2021 reform of Law 52 of 2016, must provide those records to the resident agent annually by 30 April for the prior fiscal year.[7] Penalties for non-compliance range from US$5,000 to US$1,000,000 and can include suspension of corporate rights.
Beneficial-Ownership Updates (Law 129 of 2020)
The resident agent keeps beneficial-owner data current on the private register: the company must report a change within 15 business days, and the agent updates the register within 5 business days of receiving it.[8] Agent-level fines run from US$1,000 to US$50,000 per entity, plus daily fines of US$500 for up to six months until the default is cured, and the company itself may be suspended.
Tax Filing
Companies with Panama-source income file an annual return by 31 March; companies with only foreign-source income file a non-operational declaration, typically around US$150.[6] There is no Panamanian income tax on foreign-source income, but the declaration and the franchise tax are still due.
Penalties and Strike-Off
Three consecutive years of unpaid franchise tax leads to suspension of corporate rights: the company cannot litigate, transact, dispose of assets, or obtain a certificate of good standing.[9] Reactivation requires paying the arrears, a US$1,000 rehabilitation fine and a US$25 registry duty, and providing the accounting records.[25]
Licensing Pathways from a Panama Company
A Panama company should be formed with its intended activity in mind, because licensing pathways differ sharply. As of September 2026, Panama has no comprehensive crypto or VASP framework: crypto activity is unlicensed rather than licensed. Its one notable licensed pathway is online gaming, regulated by the Junta de Control de Juegos (JCJ),[16] for which an SA is required.
Panama’s Supreme Court declared the 2022 crypto bill inexequible (unconstitutional) in a ruling of ,[26] and as of no bespoke crypto-asset licensing regime is in force: a fintech bill that would add a digital-asset and crypto-asset licence under the banking superintendency (Bill 487 of 2026) is still pending first debate.[27] Securities activity is regulated by the Superintendencia del Mercado de Valores (SMV) and banking by the Superintendencia de Bancos de Panamá (SBP), but these are full financial licences, not formation by-products.[14][15] A Panama SA or SRL is a corporate vehicle; it does not by itself authorise regulated activity.
Crypto Licensing Pathways
Panama has no bespoke VASP regime; crypto activity is unlicensed. Where a licensed base is needed, compare licensing jurisdictions and pathways.
Online Gaming Licence
Panama’s JCJ runs an established online-gaming regime. The licensee must be a Law 32 SA. See the gambling licensing guide for fees and process.
A Panama entity confers no EU passporting rights, and MiCA contains no third-country equivalence regime. MiCA Article 61 permits third-country firms to serve EU clients only when the client initiates the service at its own exclusive initiative. ESMA’s guidelines (ESMA35-1872330276-2030, dated , applicable from ) list signs that a firm is likely to be regarded as soliciting, such as EU-targeted marketing, geo-targeted advertising, or EU-based influencers, and judge each case on all the facts; a website in an EU language counts only where that language is not customary in international finance, and a firm that solicits EU clients cannot rely on the exemption.[22] For full detail on what constitutes solicitation and the documentation requirements, see Reverse Solicitation Under MiCA →
Advantages and Limitations
Panama trades EU access and a licensed crypto framework for low cost, speed, territorial taxation, and no substance test for standalone companies. It is a strong corporate and holding vehicle and a credible online-gaming base, but banking is difficult and it remains on Annex I of the EU tax list.
- Territorial taxation. Foreign-source income is exempt; only Panama-source income is taxed, at 25%.
- Low, flat government cost. A single US$300 annual franchise tax, lower than the British Virgin Islands’ US$550 annual fee.
- Fast, fully remote formation. Incorporation in 4 to 10 business days once due diligence is complete, with 100% foreign ownership and no founder presence required.
- No substance test for standalone companies. Unlike BVI and Belize, a Panama company outside a multinational group files no substance return and faces no local-activity test; group entities earning foreign-source passive income face one from 2027 (Law 526 of 2026).
- FATF-clear. Removed from the FATF grey list in October 2023 and from the EU anti-money-laundering high-risk list with effect from 5 August 2025.
- No EU passporting. A Panama entity is not an EU or EEA company and cannot serve EU clients on a passport. Mitigation: operators targeting EU clients can obtain a separate CASP authorisation in an EU member state for full passporting, or serve only clients who approach it at their own exclusive initiative under the reverse-solicitation exemption in MiCA Article 61, which ESMA tests on all the facts.
- Difficult banking. Local accounts for non-resident crypto and high-risk owners are hard to open. Mitigation: route fiat through European EMIs and specialist non-resident-friendly institutions, and begin onboarding in parallel with formation.
- On the EU tax list (Annex I). At the Council’s latest revision, of , Panama remains on Annex I of the EU list of non-cooperative jurisdictions for tax purposes, against which EU member states coordinate defensive tax measures. Mitigation: document tax residency and substance carefully, and confirm counterparty exposure to EU defensive measures before structuring.
- No licensed crypto framework. Crypto activity is unregulated rather than licensed; the 2022 crypto bill was struck down. Mitigation: use Panama as a corporate or holding layer and pair it with a licensed entity in a regulated jurisdiction where market access is required.
- Ongoing compliance is real. Accounting records must be kept and delivered to the agent, and beneficial owners reported. Mitigation: bundle accounting-records provision and UBO filing into the annual resident-agent engagement so deadlines are not missed.
How Panama Compares
Within its cluster, Panama sits alongside Costa Rica, the British Virgin Islands, and Belize. Costa Rica is the closest peer: a LatAm territorial-tax neighbour. The BVI is the common-law Caribbean offshore with a general substance regime. Belize is the budget offshore. The decisive differences are economic substance, government cost, and FATF status.
| Factor | Panama | Costa Rica | BVI | Belize |
|---|---|---|---|---|
| Entity Type | Sociedad Anónima (SA) | SA / SRL | Business Company (BC) | IBC / LLC |
| Timeline | 4 to 10 business days | 1 to 4 weeks | 1 to 5 business days | 1 to 3 business days |
| State Fee | US$300 / yr (tasa única) | ~US$150 at registration; ~US$150–510 / yr entity tax | US$550 / yr | US$150; US$250 / yr renewal |
| Min. Capital | None | None | None | None |
| Corporate Tax | 0% foreign / 25% local (territorial) | 0% foreign / 30% local (territorial) | 0% | 0% CIT; business tax on receipts |
| EU Passporting | No | No | No | No |
| FATF Status | Clear (Oct 2023) | Clear | Grey-listed (Jun 2025) | Clear |
| Remote Management | Yes (resident agent) | Yes (power of attorney; no resident agent since Ley 10.597) | Yes (registered agent) | Yes (registered agent) |
| Crypto Banking | Difficult | Difficult | Difficult | Difficult |
| Economic-Substance Regime | Group passive income only, from 2027 (Law 526 of 2026) | Targeted only (Ley 10381, multinational groups) | Yes (ES Act 2018) | Yes (ES Act 2019) |
| Best For | Holding, gaming, LatAm-facing corporates | LatAm territorial holding and operating | Recognised offshore holding structures | Lowest-cost holding and asset protection |
Compare every formation jurisdiction side by side →
The key difference is: Panama and Costa Rica are territorial-tax jurisdictions whose substance rules reach only multinational-group entities’ foreign-source passive income (Panama’s from 2027), while the BVI and Belize, which levy no corporate income tax, adopted general substance regimes to satisfy the EU and OECD.[6][24] For an owner who wants minimal ongoing substance obligations, Panama and Costa Rica are structurally simpler.
On reputation, the picture is mixed. The BVI has been FATF grey-listed since June 2025, has been on the EU anti-money-laundering high-risk list since 29 January 2026, and sits on Annex II of the EU tax list, while Panama is FATF-clear and off the EU anti-money-laundering list yet remains on Annex I of the EU tax list. None of the four grants EU market access.
When Panama Is the Right Choice
Choose Panama if you need a low-cost corporate or holding vehicle taxed only on local income, fast and fully remote incorporation with full foreign ownership, an online-gaming operation that requires a Law 32 SA, or, for a company outside a multinational group, to avoid an economic-substance test. Consider an alternative where the deciding factor points elsewhere: an EU member state for market access, the BVI for a common-law business company, or Belize where cost alone decides.
Not sure which column is you? Ask Emma. She compares these jurisdictions in seconds, in your language.
Frequently Asked Questions
Incorporation completes in 4 to 10 business days once the resident agent’s due-diligence checks are clear. The realistic timeline to a fully operating company is longer, usually several weeks, because apostilling documents and opening a bank or payment account add time. The binding constraint is rarely the Registro Público itself; it is assembling a complete know-your-client pack for the resident agent before filing. The founder does not need to travel to Panama, and the agent can act under a notarised power of attorney.
Yes. Foreign owners may hold 100% of either vehicle, but the member count differs: a Sociedad Anónima may have a single shareholder, while an SRL requires at least two members under Law 4 of 2009, Article 4. The SRL members may be individuals or legal entities. The three directors and three officers a Sociedad Anónima requires may all be non-resident and may be the same individuals.
A resident agent, who must be a Panamanian lawyer or law firm, is mandatory, but that is a service relationship, not an ownership requirement. The founder need not visit Panama to incorporate or to maintain the company.
No. Panama uses a territorial tax system, so only Panama-source income is taxed, at a 25% corporate rate, and foreign-source income is exempt. Source depends on where the work is done, not on where the client is: a non-resident-owned company whose activity is carried out outside Panama pays no Panamanian income tax on that income; it pays the US$300 annual franchise tax and files a non-operational declaration. This is not a zero-tax regime: income from activity carried out in Panama is taxable even when the client is abroad, and VAT (ITBMS) registration depends on the activity and the turnover threshold. Owners also remain reportable in their own country of tax residence under CRS. From 2027, a company that belongs to a multinational group must also show substance in Panama for foreign-source passive income, or pay 15% on it.
The government cost is a US$300 annual franchise tax (tasa única), plus one-off Registro Público charges of about US$60 on the customary US$10,000 of capital when the charter is inscribed, when the first franchise tax is also collected. The mandatory cost is at least US$610 in Year 1 and US$550 a year after, because Panamanian law also requires a resident agent, who must be a Panamanian lawyer or law firm and may not charge less than US$250 a year under the lawyers’ minimum fee tariff; the registered office is the agent’s address by default. The notarial protocolisation of the charter is quoted by the agent, as are the beneficial-owner filing and the annual provision of accounting records, and those figures differ case by case. The recurring floor is therefore US$550; the agent quotes the rest.
Not easily. Local Panama banks are reluctant to onboard non-resident-owned crypto, fintech, and high-risk companies, and de-risking since the Panama Papers and the FATF grey-listing period has tightened access further. In practice, owners often bank through European electronic money institutions offering multi-currency IBANs, or through specialist non-resident-friendly institutions in other jurisdictions.
Expect to provide apostilled corporate documents, a certificate of good standing, source-of-funds evidence, and a business plan, and budget a 4 to 12 week onboarding. A fully crypto-only operation may not need a Panama account at all.
A Panama company does not grant EU market access or passporting rights, and MiCA contains no third-country equivalence regime. MiCA Article 61 permits a third-country firm to serve EU clients only when the client initiates the service at its own exclusive initiative; the ESMA guidelines treat EU-targeted marketing or advertising as signs of solicitation and judge each case on all the facts, and a firm that solicits EU clients cannot rely on the exemption.
Operators seeking systematic EU market access should obtain a separate CASP authorisation in an EU member state. See the reverse-solicitation guide for the documentation requirements and the boundaries of the exemption.
It depends which list. Panama was removed from the FATF grey list in October 2023 and from the EU anti-money-laundering high-risk list in August 2025. However, at the Council’s latest revision, of , it remains on the EU list of non-cooperative tax jurisdictions (Annex I), which is a separate, tax-focused list with its own consequences, including defensive tax measures coordinated by EU member states. So Panama is clear on the two anti-money-laundering lists but still on the EU tax list.
No, not in the way older marketing suggests. Beneficial owners are recorded, through the resident agent, on a private register administered by the Superintendence of Non-Financial Subjects under Law 129 of 2020, accessible to competent authorities, and the three directors of a Sociedad Anónima appear on the public register. Bearer shares are immobilised and held by an authorised custodian.
Nominee officers are a long-standing practice that keeps the beneficial owner off the public director list, but the company is not anonymous to authorities. Treating a Panama company as untraceable is both inaccurate and a compliance risk.
Yes. The US$300 annual franchise tax is a flat charge that applies regardless of activity, so a dormant company still owes it and faces a US$50 surcharge plus escalating penalties for late payment. Dormant companies must also keep accounting records and provide them to the resident agent annually under Law 254 of 2021, and keep beneficial-owner data current.
Three consecutive years of unpaid franchise tax leads to suspension of corporate rights, after which reactivation requires the arrears, a US$1,000 rehabilitation fine, a US$25 registry duty, and provision of records.
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References
Show all references
- Republic of Panama, Law 32 of 1927 on Corporations (Sociedades Anónimas), panama.justia.com, accessed .
- Republic of Panama, Law 4 of 2009 on Limited Liability Companies (SRL), Articles 4 (at least two members) and 44(8) (reduction below two and the cure period), gacetaoficial.gob.pa, accessed .
- Republic of Panama, Law 25 of 1995 on Private Interest Foundations, panama.justia.com, accessed .
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