How to Set Up a Company in Panama as a Foreigner (2026)

Panama's territorial tax system

Panama taxes income from Panamanian sources only. Income from activities carried on entirely outside Panama is exempt from Panamanian income tax — regardless of whether the income is received in Panama.

• In practice for international businesses:
• Consulting income from foreign clients: 0% Panama tax
• Trading income from foreign buyers and sellers: 0% Panama tax
• Dividends from foreign subsidiaries: 0% Panama tax
• Capital gains on sale of foreign companies: 0% Panama tax

• What IS taxed in Panama:
• Income from Panamanian sources (sales to Panamanian clients, Panamanian-sourced interest, etc.)
• Panama-based employees' salaries (via payroll tax/ITBMS)

Standard CT on Panama-source income: 25%

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Panama post-Panama Papers

• The 2016 Panama Papers leak revealed widespread misuse of Panamanian structures for tax evasion and concealment. Since then:
• Panama has joined the OECD's Common Reporting Standard (CRS) — automatic exchange of financial information with partner countries
• Panama has implemented Anti-Money Laundering (AML) reforms
• Panama has established beneficial ownership registers accessible to law enforcement

Panama is no longer a secrecy jurisdiction. It remains a territorial tax jurisdiction — which is legitimate and commercially useful.

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Structure: Sociedad Anónima (SA)

Panama's standard company structure for international operations is the Sociedad Anónima (SA) — literally "Anonymous Society" (joint-stock company).

• Requirements:
• Minimum 3 directors (Panamanian law quirk — all three can be nominées provided by the registered agent)
• Minimum 1 shareholder (can be a corporate entity)
• No minimum share capital
• Registered agent: mandatory — must be a Panamanian lawyer registered with the Public Registry
• Registered office: via the registered agent

Shares: Can be bearer shares (abolished — now must be registered) or nominative (registered) shares.

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Formation process

All Panamanian company formations are handled by registered agents — typically law firms registered with the Public Registry of Panama.

1. Contact a Panama registered agent (law firm) 2. Provide: identity documents (passport) for all shareholders, description of business activities 3. Registered agent drafts Articles of Incorporation (Pacto Social) in Spanish 4. Registered agent files with the Public Registry of Panama 5. Company is registered within 3–5 business days 6. You receive a Public Registry Certificate (Certificado de Existencia)

Cost from a typical Panamanian law firm: USD 800–1,500 including first year of registered agent services and nominee directors.

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Banking — the main challenge

Post-Panama Papers, Panamanian banks have significantly tightened KYC for companies incorporated in Panama. The historically easy banking environment (anonymous accounts, minimal due diligence) is gone.

Major Panamanian banks: Banco Nacional de Panamá (state-owned), Banistmo, Multibank, Global Bank, Caja de Ahorros. Plus international banks with Panama branches: HSBC, Citibank, Scotiabank.

Account opening requirements: Comprehensive KYC — passport, proof of address, source of funds explanation, business plan, evidence of legitimate business activity, references from existing bankers. Processing: 4–12 weeks.

Alternative banking: Wise Business (for international receipts), a US Mercury account (linked to the Panama company's USD income), or a bank in a third country where your operating company banks.

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Real cost (Year 1)