Panama Company Formation

Panama gives a non-resident three company vehicles, all registered at the Registro Público (Persona Mercantil section) and all needing a Panamanian resident agent who is a lawyer or a law firm. The Sociedad Anónima (S.A.) is governed by Ley 32 of 26 February 1927. The Sociedad de Responsabilidad Limitada (S. de R.L.) is governed by Ley 4 of 9 January 2009. The Fundación de Interés Privado, the private-interest foundation, is governed by Ley 25 of 12 June 1995. Ley 4 de 2009 is the S.R.L. law, not the foundation law, a mix-up that appears in some provider material.

One reading limit comes first. The official Gaceta Oficial site answers every request with a bot-challenge page, so we could not open the Gaceta copy of Ley 32 de 1927. We read it on a public mirror of the Asamblea Nacional text, which shows the law as published in the 1927 text, without amendment notes. A mirror cannot prove which articles are current, so we confirm the current wording before any filing. A reform is also pending: in April 2026 the Cabinet authorised the Minister of Economy to send the Assembly a bill modifying and repealing articles of Ley 32 to adapt it to international standards of corporate transparency and tax compliance. We found no evidence that it has been filed or passed. As at November 2026, the status is unknown.

What you get is a territorial tax system: Panama charges income tax on income produced in Panama, and foreign-source income stays outside that net. What comes with it is a records and reporting regime that is heavier than the 'tax-free offshore' label suggests: an annual fee, five-year accounting records handed to the agent every year, a private beneficial-owner register filed by the agent, and, from fiscal 2027, a substance test for multinational-group entities with passive foreign income. The sections on tax and annual obligations and economic substance set these out with the statute behind each.

If you are still choosing a jurisdiction, the company formation hub compares them side by side. The pages for Costa Rica, Belize and the British Virgin Islands cover the nearest alternatives. If your business is online gaming, Panama also has its own national licence, covered on our Panama gambling licence page, and a company formed here is a separate step from that licence.

Statute texts were read from Asamblea Nacional LEGISPAN scans, updated texts hosted by the Ministry of Economy and Finance (MEF), and Órgano Judicial copies of the Gaceta pages. Where we could only read a secondary source, such as an adviser note for the 2026 substance law, the page says so.

Panama taxes income produced inside Panama. Under article 695 of the Código Fiscal, as rewritten by Ley 8 de 2010, taxable income is gross income minus foreign-source income, exempt income and deductions, and costs attributable to foreign-source or exempt income are not deductible (article 697). The same Ley sets the general corporate rate at 25%, and names banks, insurers and gaming operators at 25% too. We read the 2010 text. Later amendments to these articles would not show in it.

What counts as foreign-source is a question of facts. We found no single definition sentence in the statute. The working test is the lists in article 694: a company's operations carried out outside Panama, and costs financed, contracted and executed entirely abroad, are not Panama-source. Payments received by a non-resident for services or acts that benefit persons in Panama are Panama-source to the extent they affect Panama-source income, with 50% of the amount as the withholding base. Dividends distributed from non-Panama-source income by a company that needs no Aviso de Operación, or has no taxable Panama income, are not themselves a Panama-source activity (article 694, paragraph 2(c)). A sales or marketing team in Panama, or a Panama bank account used for the business, can bring income into Panama-source, so a Panamanian tax lawyer confirms your model before you rely on the exemption.

Dividends have their own withholding. The DGI page gives 10% on dividends from Panama-source profits and 5% on dividends from exempt, foreign-source or export-related profits. The page does not cite the article and we did not check the Código Fiscal text behind it.

That is the Panama side only. A Panamanian S.A. does not make its owner a Panama tax resident, and it does not shield the owner from the home country's controlled-foreign-company rules or from a place-of-effective-management test there. Those are statements about other countries' law, which this page does not research: take advice where the owners and decision-makers are based before you commit.

The yearly duties are specific and they carry fines.

Not every Panama company, but some will from fiscal 2027. A first correction: Ley 52 de 2016 is sometimes cited as Panama's substance law. It is the accounting-records law (Gaceta Oficial 28149-B, in force 1 January 2017, amended by Ley 254 de 2021) covered in the previous section. Panama's substance regime is Ley 526 of 28 May 2026 (Gaceta Oficial 30534-B), which applies from fiscal 2027 and is regulated by Decreto Ejecutivo 32 of 2 September 2026.

The statute text itself was not openable. The Gaceta site blocks our requests and we found no LEGISPAN or MEF copy, so what follows is as described in advisers' notes, from KPMG Panama, RSM and ECIJA. The Council of the EU independently confirms that the law was signed on 28 May 2026 and the decree adopted on 2 September 2026. The decree's Gaceta number is not given in those sources.

According to those notes, the regime catches entities that are part of a multinational group, meaning two or more entities linked by ownership or control and tax-resident in different jurisdictions, that are incorporated or domiciled in Panama and receive passive foreign-source income: dividends, interest, royalties, capital gains, real-estate rental income and other movable-capital income. It does not test active foreign trading income. Shipping under the Panamanian flag and regulated banks, insurers, securities firms and regulated fund managers, for income from their regulated activity, are excluded.

The test, as described, asks for adequate paid and qualified staff and premises in Panama for the core activities, strategic decisions taken in Panama (the decree requires at least two in-person management meetings a year in Panama, per ECIJA) and adequate operating spend in Panama. Holding-only entities get partial relief on the decision and spend tests, and outsourcing is allowed if the work is done in Panama. An entity that fails loses the territorial exemption for that passive foreign income and pays 15% on its net taxable income, reported through the annual income tax return. The notes also describe an anti-abuse clause that lets the MEF disregard structures. The penalty table for late or false reporting was not found.

The notes do not say that every Panamanian company is caught. The decree does not catch 'automáticamente a toda sociedad o fundación panameña', in ECIJA's words. Our reading of the secondary summaries, which is not a legal opinion, is that a company with no foreign affiliate and no passive foreign income is probably outside the regime, and that companies under common ownership count as a group. Whether a founder who owns a Panama company and a foreign sister company is in scope is a point we confirm with a Panamanian tax lawyer for each structure.

On the EU tax list, Panama moved from Annex I to Annex II on 9 October 2026. The Code of Conduct Group report in Council document 13306/26 concluded that Panama should be delisted from Annex I because of the 2026 reform, and that a reference goes into Annex II because Panama asked the Global Forum for an in-depth exchange-of-information review, planned for the first quarter of 2027. The adoption date comes from a KPMG tax newsflash, which also says the change takes effect on publication in the Official Journal and that the next update is expected in February 2027. We did not open the Official Journal publication. Separately, Panama is removed from the EU high-risk third-country list for money laundering by Delegated Regulation (EU) 2025/1184. We make no statement about Panama's FATF status on this page, because we could not confirm it against the FATF's own publication.

The Registro Público is public. It shows the company's name, type and status, its charter, its domicile, and the list of directors, officers and attorneys-in-fact. Access is free but needs registration on the portal. Depending on the charter, the registry may or may not show shareholders. For a foundation, the founding act is registered and the beneficiaries are not published. A register that does not show shareholders is not a register that nobody sees: the data exists and sits with the agent.

The beneficial-owner register is separate and private. Ley 129 de 17 March 2020 created the 'Sistema Privado y Único de Registro de Beneficiarios Finales', run by the Superintendencia de Sujetos no Financieros (SSNF), described in the law as free, private and of limited access. The resident agent files it, not the company: name, ID or passport number, date of birth, nationality, address and the date the interest was acquired, for every beneficial owner. Entries are due within 15 business days of incorporation or of appointing a new agent. The threshold is 25% ownership for the non-financial sector and 10% for the financial sector, plus control by other means and a senior managing official as the last step. For a foundation, it means any natural person receiving economic benefit and the person exercising ultimate effective control.

Access is limited to the entity's own resident agent and two SSNF officials, who release data to the competent authorities, which include the SSNF, the financial intelligence unit (UAF), the Public Ministry, the MEF and the DGI. Unauthorised access carries a fine of B/.500,000 and a breach of confidentiality B/.200,000. The agent is fined B/.1,000 to B/.50,000 per entity not registered or updated, plus a progressive B/.500 a day for up to six months. The entity's corporate rights can be suspended through the Registro Público and forced liquidation ordered, and false declarations double the maximum penalty.

Bearer shares are not abolished. Ley 47 de 6 August 2013 immobilises them in mandatory custody: every owner names an authorised custodian, which can be a general-licence bank, a trust company, a securities firm or a lawyer on a special register of the Supreme Court. Under article 12 of Ley 52 de 2016, bearer shares not delivered to custody lose their political and economic rights by operation of law. An S.A. may still issue bearer shares only if it adopts the custody regime. In April 2026 the Minister of Economy described bearer shares as practically unused and said further regulation would go to the Assembly. A further reform of Ley 32 de 1927 was announced, and its status is unknown. A bearer certificate is therefore a custody record, not a way to stay off every register.

Nominees. No Panamanian company statute we read prohibits nominee directors. Lawyers and accountants who supply them are non-financial obliged subjects and must file an annual sworn list naming nominator and nominee under SSNF Acuerdo JD-02-2022. Vantegris can arrange nominee directors and nominee shareholders where Panamanian law allows them and the resident agent accepts them. A nominee changes what the public register shows, not what the resident agent, the bank and the authorities are told: the nominator is recorded.

An account is a separate application from forming the company, and formation carries no guarantee of one. We found no primary source that says how readily any Panamanian or foreign bank opens an account for a Panama S.A., and we do not guess. We also found no statutory duty for a non-operating Panama company to hold a Panama bank account.

What the sources do show is what a bank will ask for. Banks are financial obliged subjects under Ley 23 de 2015, and the Panamanian beneficial-owner threshold for the financial sector is 10%, against 25% for the non-financial sector. The Registro Público shows directors and attorneys-in-fact but may not show shareholder names, so a bank will ask for the share register and beneficial-owner documents, which the resident agent also holds. No statute we read makes the Aviso de Operación a condition for opening an account, and a company that does not operate in Panama does not need one, although a bank may ask for it if you do operate.

For gaming and crypto groups our working position is an account with an electronic money institution or neobank rather than a traditional bank, and we do not promise one. Our pages on high-risk merchant accounts, gaming company bank accounts and crypto-friendly banking explain what providers ask for and why applications fail. For any other business, how banking works for your structure is confirmed in the quote.

Online gaming in Panama is licensed by the Junta de Control de Juegos (JCJ). The regulation requires an applicant constituted in Panama or registered there as a foreign company, with offices and a call centre in the country, and it sets no processing deadline, so expect months, not weeks. The fees, bonds and conditions are on our Panama gambling licence page and in the gaming licence guide, and this page does not repeat them. A formed S.A. is only the applicant vehicle: it does not carry a gaming permission of its own.

For crypto, there is no licence regime in force. The Minister of Economy said on 24 August 2026 that no law on crypto assets is in force, and a draft bill exists that we found no evidence has passed. Our article on Panama crypto regulation and the crypto licence page follow the position. Whether a virtual-asset firm counts as an obliged subject under Panamanian AML law, and so must register as one, we did not confirm at the statute, and we confirm it in the quote. A Panama company can be formed now and a licence added later, if and when a regime exists.

Panama is also not our applicant jurisdiction. Our applicant company for Anjouan, Tobique, Tuvalu, Kahnawake and KUNAISA licences is in Costa Rica, and the payment agent for gambling structures is in Cyprus. The article on setting up a company in Costa Rica explains that structure. Use Panama when the facts of your business point to Panama, not as a general gaming-company jurisdiction.

A private-interest foundation has no shareholders. One or more founders, natural or legal persons, create it, directly or through third parties, and it gains legal personality on registration with no other authorisation (Ley 25 de 1995, articles 1 and 9). The charter names the foundation council, which has at least three members unless the member is a legal person, and the resident agent, a lawyer or law firm, countersigns the charter before registration. The minimum initial assets are B/.10,000, and the name must contain the word 'fundación'.

Its main legal feature is separation. The foundation's assets are a separate estate from the founder's, shielded from the founder's personal creditors and from the beneficiaries' creditors (article 11). That shield has a limit: creditors can challenge transfers made in fraud of creditors within three years (article 15). A foundation is irrevocable unless the charter says otherwise, and the founder may reserve the right to amend the charter (article 5.8) and may be a beneficiary and a council member.

It is also a different kind of entity from a trading company. A foundation may not pursue profit, and commercial activity is allowed only 'en forma no habitual' with the proceeds dedicated to the foundation's purposes (article 3). Ley 52 de 2016 and Ley 129 de 2020 treat it as a legal person with the same agent and records duties as a company, and it pays the tasa única at B/.350 in year one and B/.400 afterwards. Its tax treatment in Panama and in the founder's country was not part of what we verified, so take advice in both. We found no later consolidated text of Ley 25 de 1995 and did not find whether the Supreme Court ruled on a constitutional challenge to the three-member council rule, so we confirm the current text before any filing.

It is not a company with no duties. 'Tax-free offshore' is too crude for Panama. Foreign-source income stays outside Panama's income tax, but Panama-source income is taxed at 25%, passive foreign income of group entities is tested for substance from 2027 and taxed at 15% if the test fails, and the company keeps accounting records and gives them to its agent every year. A company that falls behind on the annual fee and records is suspended and eventually dissolved. Press reports say that since 27 February 2026 the MEF has been clearing out suspended, inactive S.A.s, tied to avoiding EU and FATF relisting. That is context from the press, not a rule.