🇵🇦 Annual Compliance — Panama

Assuming Panama is a zero-tax jurisdiction

Fix: Panama taxes domestic-source income at 25%. The territorial system only exempts foreign-source income. If your company earns income from Panamanian customers or operations, that income is fully taxable. Structure accordingly and maintain clear records distinguishing domestic and foreign-source income.

Underestimating post-Panama Papers banking difficulty

Fix: Budget 2–8 weeks for banking and expect to provide extensive documentation. Apply to multiple banks. Consider opening a personal account first (if you have Panama residency) and then converting to corporate banking. Some founders open accounts in the US or other jurisdictions and use Panama purely as a holding structure.

Relying on bearer shares for privacy

Fix: Bearer shares in Panama have been immobilised since 2015 — they must be deposited with an authorised custodian who records the beneficial owner. They no longer provide anonymous ownership. Use a standard registered share structure and comply with beneficial ownership reporting requirements.

Forgetting the annual franchise tax

Fix: All Panama corporations must pay a $300 annual franchise tax (Tasa Única) regardless of whether they conduct business in Panama. Failure to pay results in the company being listed as delinquent, which can affect banking and the ability to obtain certificates of good standing.