Company Formation in Panama

Last updated: April 2026.

Panama runs one of the oldest and most recognised offshore corporate regimes in the Americas — a territorial tax system in which foreign-source income is fully exempt and only Panama-source profits are taxed at the headline 25% corporate rate. The Sociedad Anónima, governed by Law 32 of 1927, has incorporated more non-resident companies than any other Latin American vehicle over the past century. Formation takes 2 to 5 business days at the Public Registry. There is no statutory minimum paid-up capital. Panama was removed from the FATF grey list in October 2023 and from the EU list of non-cooperative jurisdictions for AML purposes in July 2025 — a meaningful shift in banking access.

We form Panama S.A.s and S.R.L.s end to end: licensed Resident Agent, notarised Pacto Social, Public Registry filing, beneficial-owner registration under Law 129 of 2020, Aviso de Operación, and introductions to Banco General, Banistmo, Multibank, or regional fintech alternatives. Fixed price. No hourly billing.

Quick facts	Value
Corporate income tax (Panama-source)	25% flat
Foreign-source income	0% — territorial regime
Alternative CAIR rate (revenue > USD 1.5m)	4.67% of gross taxable income — higher of the two applies
ITBMS (VAT) standard	7% — registration threshold USD 36,000/year
Withholding tax on domestic-source dividends	10% (5% on foreign-source / export profits)
Withholding tax on interest and royalties to non-residents	12.5% effective
Capital gains on Panama share sales	10% on net gain
Minimum share capital (S.A.)	USD 10,000 authorised, no paid-up requirement
Minimum directors / shareholders	3 directors, 1 shareholder
Residency requirement	None — directors and shareholders of any nationality
Standard formation time	2–5 business days (1 day express)
Government fees	Included in our packages
Language of filings	Spanish (official); Pacto Social accepted in any language with certified Spanish translation
Currency	US Dollar (USD) — Panama uses the dollar as legal tender alongside the Balboa (pegged 1:1)

Why Form a Company in Panama

Panama has three structural advantages that are hard to replicate.

The territorial tax regime is real and long-standing. Income earned outside Panama — from trading with foreign counterparties, holding foreign subsidiaries, licensing IP to foreign licensees, or investing in foreign securities — is outside the scope of Panamanian income tax. This is not a treaty carve-out and not an incentive that sunsets. It is the foundational principle of the Panama tax code, unchanged since the 1940s.

The US dollar is the currency. Panama has used the USD as legal tender since 1904. There is no central bank printing a local currency, no FX controls, and no parallel exchange rate. Dollars in, dollars out. Corporate accounts denominated in USD settle through the US banking system directly.

The S.A. is globally recognised. A Panama Sociedad Anónima is accepted by counterparties, banks, and regulators across Latin America, the Caribbean, Europe, and Asia as a tested and familiar vehicle. Most of Central and South America's shipping industry, commodity trading desks, and family holding structures use Panama S.A.s as their apex entity.

Two trade-offs matter. Panama is not an EU member — there is no access to the Parent-Subsidiary Directive or the Interest-and-Royalties Directive, and Panama companies cannot passport financial services into the EU. And Panama remains on certain discretionary national "monitoring" lists (for example, some EU member states apply their own domestic substance tests to payments into Panama even though the EU-level AML listing was cleared in 2025). For most non-financial, non-EU-facing structures this is manageable; for active trading with EU counterparties a Cyprus or Ireland entity may be a better fit.

Company Types Available in Panama

Panama corporate law offers four working forms. The S.A. handles the vast majority of international structures.

Sociedad Anónima ("S.A.")

The flagship vehicle. Governed by Law 32 of 1927 — a statute that has been continuously in force for nearly 100 years and is the oldest offshore corporate law still on the books. Used for holding companies, trading businesses, real estate vehicles, shipping companies, and asset-protection structures. Minimum three directors, who may be of any nationality and resident in any country. Minimum one shareholder, who may be a natural or legal person of any nationality. Authorised capital typically USD 10,000 with no paid-up requirement — shares can be issued as capital is contributed. Bearer shares are permitted but must be immobilised with a licensed custodian under the 2013 reform.

Sociedad de Responsabilidad Limitada ("S.R.L.")

Introduced in its modern form by Law 4 of 2009. Closer to a US LLC or a German GmbH than to a full corporation. Used by closely held businesses, joint ventures, and family structures that want quota-based ownership instead of freely transferable shares. Minimum two partners, maximum 20. Capital between USD 2,000 and USD 500,000. Quotas (not shares) represent ownership and are transferred by amendment to the Pacto Social rather than by endorsement of a certificate — this slows share transfers but tightens control.

Fundación de Interés Privado (Private Interest Foundation)

A civil-law analogue of the common-law trust, created by Law 25 of 1995. A separate patrimony with no owners — a founder endows assets irrevocably, a foundation council administers them, and beneficiaries receive distributions under the bylaws. Used almost exclusively for succession planning, asset protection, and cross-border estate structures. Minimum capital USD 10,000. Not a trading vehicle.

Sociedad Civil

An unlimited-liability partnership for professionals — doctors, lawyers, architects, consultants. Members remain personally liable for partnership debts. Rarely used by non-residents.

Form	Min capital	Liability	Tax treatment	Common use
S.A.	USD 10,000 authorised (no paid-up)	Limited	25% on Panama-source; 0% on foreign-source	Holdings, trading, shipping, asset protection
S.R.L.	USD 2,000 – 500,000	Limited	Same territorial regime	SMEs, JVs, family companies
Fundación	USD 10,000	Separate patrimony	Exempt on foreign-source	Succession, estate planning
Sociedad Civil	None statutory	Unlimited	Partners taxed personally	Professional practices

If speed is critical and you cannot wait 3–5 business days for Public Registry processing, our sister brand offers ready-made Panama companies — pre-incorporated S.A.s that transfer in 24 to 48 hours once KYC clears.

Step-by-Step Formation Process

The timeline assumes a Panama S.A. with non-resident directors and shareholders.

1. Vehicle and name selection. We confirm whether an S.A. or S.R.L. fits the intended use, and run the proposed company name through the Panama Public Registry database. Corporate names must end in "Corp", "Inc", "S.A.", or "Sociedad Anónima" and may be in any language — Spanish, English, Chinese, Arabic. Two or three alternatives are normal because common English words are often pre-registered.

1. KYC and documentation pack. You provide passport and address proof for each director, officer (President/Secretary/Treasurer), shareholder, and ultimate beneficial owner. Our Resident Agent runs enhanced due diligence under Panama's AML rules — sanctions screening, PEP screening, source-of-funds review. For corporate shareholders we need certificate of incorporation, register of directors, and UBO declaration.

1. Drafting the Pacto Social. We draft the articles of incorporation in Spanish (the filing language) with an English parallel version for client execution. The Pacto Social sets out company name, duration (typically perpetual), objects, share structure, directors, officers, and Resident Agent. Two subscribers (usually the Resident Agent's nominees) sign before a Panamanian Notary Public.

1. Public Registry filing. The notarised Pacto Social is filed with the Registro Público de Panamá. Standard processing is 2 to 5 business days. Express processing (1 business day) is available for an additional government premium that we include in expedited packages. Upon approval, the company receives its Folio digital identifier and the Certificate of Registration.

1. Beneficial-ownership registration. Under Law 129 of 2020, the Resident Agent must file ultimate beneficial owner data with the Registro Único de Beneficiarios Finales (RUBF), administered by the Superintendencia de Sujetos No Financieros. This register is not public — it is accessible only to competent authorities. Filing is due within 30 days of incorporation.

1. Commercial licence and tax ID. If the company will operate in Panama (have employees, issue local invoices, or sell to Panama-resident customers), we obtain the Aviso de Operación through the PanamáEmprende portal of the Ministerio de Comercio e Industrias. Pure offshore S.A.s — those with no Panama-source activity — do not need an Aviso. All companies register with the Dirección General de Ingresos (DGI) for tax purposes and receive a RUC number.

1. Banking and post-incorporation. Bank account opening runs in parallel once the Certificate of Registration is issued. Expect 2 to 4 weeks with a domestic bank, faster with a fintech EMI.

Realistic end-to-end lead time from KYC clearance to an operating S.A. with a corporate bank account is 3 to 6 weeks, with the registered company itself in hand within the first week.

Required Documents

For each director, officer, shareholder, and beneficial owner we need:

• Valid passport (entire photo page, clear scan)
• Government-issued second ID — national ID card, driving licence, or residence permit
• Proof of address dated within the last three months — utility bill, bank statement, credit card statement, or government correspondence
• Bank or professional reference letter (two letters for bank account applications; one is usually sufficient for incorporation alone)
• Brief CV or business résumé, plus a short description of the intended business and sources of funds
• For corporate shareholders: certificate of incorporation, certificate of good standing, register of directors, and UBO declaration — apostilled or legalised, with certified Spanish translation where the original is not in Spanish or English

The Panama Public Registry accepts documents in Spanish or English directly. Documents in other languages require certified translation into Spanish. Apostille (Panama is a Hague Convention member since 1991) is required for foreign public documents used in evidence.

Costs and Timeline

Panama formation pricing covers the notarised Pacto Social, Resident Agent for year one, Public Registry filing, all government fees, beneficial-owner registration with the RUBF, corporate kit (share certificates, minute book, seal), Apostille of the Certificate of Registration, and a courier delivery of originals to your address of choice. Banking introduction is included in the standard package.

Renewal costs — Resident Agent retainer, annual franchise tax (tasa única) of USD 300 for S.A.s, and registered address — are invoiced annually from year two.

Contact us for a fixed-price quote. No hourly billing. No government surcharges added after the work is done.

Typical timeline from KYC clearance:

Day / Week	Milestone
Day 0	Engagement, KYC submitted
Day 1–3	KYC cleared, Pacto Social drafted, client signs
Day 4–8	Public Registry filing and approval
Day 9–14	Beneficial-owner registration, corporate kit couriered
Week 3–6	Corporate bank account opened

Tax Overview for Panama Companies

Panama's tax system is built on a single principle: only Panama-source income is taxable.

Corporate income tax: 25% flat on Panama-source net income for all corporate forms. Small businesses (revenue below USD 500,000) can elect to be taxed on a sliding scale starting at 7.5%. Companies with gross annual revenue above USD 1.5 million are subject to the Cálculo Alterno del Impuesto sobre la Renta (CAIR) — an alternative minimum calculated as 4.67% of taxable gross income, with the company paying whichever method produces the higher liability.

Foreign-source income: 0%. Trading with foreign counterparties, holding shares in foreign subsidiaries, licensing IP to foreign licensees, earning interest on foreign deposits, and receiving foreign-sourced dividends are all outside the Panamanian tax net. This is codified in Article 694 of the Fiscal Code and has been repeatedly confirmed by the DGI.

ITBMS (VAT): 7% on taxable supplies of goods and services within Panama, with a registration threshold of USD 3,000 per month or USD 36,000 annually. Elevated rates apply to alcoholic beverages and hotel accommodation (10%) and tobacco (15%). Export sales are zero-rated.

Withholding tax on dividends: 10% on dividends paid from Panama-source (domestic) profits, 5% on dividends paid from foreign-source or export profits. A further 10% "complementary tax" applies to undistributed profits above a retention threshold — effectively an advance dividend tax credited on eventual distribution.

Withholding tax on interest and royalties paid to non-residents is calculated as 25% (the corporate rate) applied to 50% of the gross payment — an effective rate of 12.5%. Treaty relief is available under Panama's 17 double-tax treaties, including those with the UK, Spain, Italy, Ireland, the Netherlands, Luxembourg, the UAE, Singapore, and Portugal.

Capital gains on sales of Panama-domiciled shares are taxed at 10% of the net gain, with the buyer withholding 5% of the purchase price as an advance payment. The seller can elect to treat the 5% withholding as final tax.

No exchange controls. USD is legal tender. Profits, dividends, and capital can be remitted abroad without authorisation.

Panama participates in the OECD Common Reporting Standard (CRS) — tax-residence information on account holders is exchanged automatically with partner jurisdictions. Panama is also on the OECD Inclusive Framework and has committed to the Pillar Two global minimum tax for in-scope multinationals.

Banking for Panama Companies

Panama has one of the largest international banking sectors in Latin America — over 70 licensed banks, including local Panamanian banks, regional Latin American groups, and international subsidiaries. Account opening post-2023 is procedurally stricter than a decade ago but perfectly achievable with complete documentation.

Banco General is the largest domestic bank by assets and the default choice for mid-size corporate accounts. Accepts non-resident-controlled S.A.s with a completed director interview (usually in person in Panama City, occasionally by video for existing clients). Minimum opening deposit typically USD 10,000 for corporate accounts.

Banistmo, owned by Colombia's Bancolombia group, is strong on regional transfers and USD-wire volume. Accepts non-residents and has digital onboarding for some product lines. Good choice for businesses trading across Latin America.

Multibank (part of Grupo Aval from Colombia) serves the SME and mid-market segment. Accepts non-resident directors with two banker references and a business plan.

Scotiabank Panama is the Panama arm of Canada's Scotiabank and offers international cash management, USD wires, and correspondent relationships across the Americas. Preferred by clients who want a global bank brand on their statements.

Mercantil Banco (Venezuelan parent, regionally active) and Mega International Commercial Bank (Taiwanese parent, Asian trade finance) round out the non-resident-friendly list.

BAC Credomatic, the largest Central American retail bank, generally limits corporate account opening to entities with Panamanian-resident directors or a Panama operating presence.

For cross-border-heavy businesses that do not need a local Panama bank, Wise Business, Airwallex, and Mercury (for US-source clients) are viable fintech alternatives. None is a full Panama-resident banking solution, but each provides multi-currency USD wiring capacity and API integration. Mercury in particular is useful for Panama S.A.s whose operations are primarily US-facing.

Nominee Director Services in Panama

Panama permits nominee directors, and nominee appointments have been a feature of Panamanian corporate practice since the S.A. statute was enacted in 1927. Two important frames on current use.

Beneficial ownership is registered, but not public. Since Law 129 of 2020, every Panama company's Resident Agent must file the ultimate beneficial owner's identity, nationality, percentage holding, and source of funds with the Registro Único de Beneficiarios Finales. The register is held by the Superintendencia de Sujetos No Financieros and is accessible only to competent authorities — tax authorities, judicial authorities, and FIUs from jurisdictions with which Panama has information-exchange agreements. It is not publicly searchable. Nominee directors therefore do not obscure ownership from regulators, but they do keep the UBO's name off the public Public Registry record (which does list directors and officers).

The Resident Agent's role is distinct. Every Panama company must have a Resident Agent who is a Panamanian attorney or law firm — this is a statutory requirement, not a nominee service. The Resident Agent handles the filing of corporate documents, maintains the share register, files the beneficial-owner declaration, and acts as the legal point of contact for Panama authorities. The Resident Agent is not a director. Our nominee director service is a separate, optional engagement.

We provide nominee directors where the structure is legitimate, fully KYC-compliant, and appropriately documented. Standard arrangements include a written nominee declaration, an indemnity from the beneficial owner, a pre-signed (undated) resignation letter held in escrow, and a service-level agreement covering board resolutions, document signing, and annual filings. We do not provide nominee services where the intent is to obscure ownership from regulators, avoid CRS reporting, or frustrate a known legal or regulatory obligation.

Frequently Asked Questions

How long does it take to register a company in Panama?

Public Registry processing is 2 to 5 business days under standard service. Express filing in 1 business day is available for a government premium we include in expedited packages. Including KYC, drafting, notarisation, beneficial-owner registration, and courier delivery of originals, the realistic timeline from first contact to a fully operational S.A. is 1 to 2 weeks. Adding a Panama corporate bank account extends total lead time to 3 to 6 weeks.

Does a Panama S.A. pay tax on foreign income?

No. Panama operates a territorial tax regime under Article 694 of the Fiscal Code. Only Panama-source income is taxed at the 25% corporate rate. Income from trading with foreign counterparties, holding foreign subsidiaries, licensing IP abroad, or investing in foreign securities is fully exempt from Panama income tax. This is not a treaty benefit — it is the baseline rule of the Panama tax code.

What is the minimum share capital for a Panama Sociedad Anónima?

Panama law does not require a minimum paid-up share capital for an S.A. The customary authorised capital is USD 10,000, typically divided into 100 or 1,000 shares, but none of it needs to be paid up at incorporation. Shares can be issued progressively as capital is contributed. For an S.R.L. the range is USD 2,000 to USD 500,000.

Can a non-resident open a company in Panama?

Yes. There is no residency requirement for directors, officers, or shareholders of a Panama S.A. or S.R.L. Directors and shareholders can be natural or legal persons of any nationality, resident in any country. The only Panama-resident element is the Resident Agent, who must be a Panamanian attorney or law firm — we appoint a licensed Resident Agent as part of the standard formation package.

Is Panama still on the FATF grey list?

No. Panama was removed from the FATF grey list in October 2023 after completing its action plan on beneficial-ownership transparency and AML supervision. Panama was also removed from the EU list of non-cooperative jurisdictions for tax purposes in late 2024 and from the EU AML high-risk third-country list in July 2025. Banking access has improved materially as a result.

Can I open a Panama bank account without visiting Panama?

For most domestic Panamanian banks — Banco General, Banistmo, Multibank — a director interview is required, and banks typically ask for it in person in Panama City. Some have shifted to video interviews for existing clients and lower-risk profiles since 2024. For a fully remote setup, fintech EMIs (Wise Business, Airwallex, and Mercury for US-source clients) provide multi-currency USD wiring without Panama residency or travel.

What is the difference between a Panama S.A. and an S.R.L.?

An S.A. issues freely transferable shares, is governed by a board of at least three directors, and is the traditional vehicle for international trade, holdings, and asset protection. An S.R.L. issues quotas (not shares), has 2 to 20 partners, requires only one manager, and is used for closely held SME and family structures where restricted transfer is desired. Both benefit from the same territorial tax regime.

Get Started — Form Your Panama Company

A fixed-price quote in 60 seconds. Certificate of Registration within 2 to 5 business days of Public Registry filing. Licensed Resident Agent, Pacto Social drafting, beneficial-owner registration, and bank introduction all included.

Call +48 2222 5 2222 or email [email protected] to start. Most Panama S.A. formations are complete and operating with a corporate bank account within 3 to 6 weeks.

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Content prepared by Piotr Walter, In-house Counsel. Approved by Tomasz Bielski, Managing Director.