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The total budget has two parts: fixed amounts payable to the state and professional fees. The state side is predictable: a 10 balboa qualification fee at the Public Registry, a 50 balboa registration fee for the first USD 10,000 of capital and the 300 balboa single fee paid on registration. The full breakdown is in the official fee table.
On the service side you pay the resident agent, notary, drafting of the articles, power of attorney, apostille and banking support. Including those items a turnkey formation budget usually falls between USD 4,000 and 7,000, with capital size, an added foundation layer and the choice of bank driving the range. From the second year the recurring fixed cost is the 300 balboa single fee plus the resident agent renewal.
Panama has been used for international corporate structures since its Sociedad Anónima statute of 1927. Three concrete features shape its appeal: taxation follows the territorial principle, the balboa is pegged to the US dollar at 1:1 and the dollar circulates as legal tender, and incorporation is open to shareholders of any nationality. Income earned outside Panama is not subject to corporate income tax as long as no activity is carried out inside the country.
Tax is not the whole picture. In the Council of the European Union update of 17 February 2026, Panama remained on Annex I of the EU list of non-cooperative jurisdictions for tax purposes. For shareholders resident in an EU member state this can trigger defensive measures such as non-deductibility of costs, controlled foreign company rules, additional withholding tax or a restriction of the participation exemption. On the anti-money-laundering side the position improved: the Financial Action Task Force removed Panama from its increased-monitoring list on 27 October 2023.
In practice Panama suits cross-border goods trading, software and consulting exports, and holding structures that consolidate participations under one roof, provided the owner is willing to run the resident agent and accounting-record obligations properly. Paper-only companies with no genuine commercial activity behind them fail at two points: bank account approval and the shareholder's own reporting obligations at home.
Three structures cover almost every international use case. All three are registered with the Public Registry and all three must appoint a resident agent.
The most common choice. Incorporation requires two or more subscribers, individuals or legal entities, of any nationality or residence, to sign the articles of incorporation. The board consists of at least three members holding the offices of president, secretary and treasurer. There is no statutory minimum paid-in capital; in practice an authorised capital of USD 10,000 divided into 100 shares is used, because the registration fee is calculated on capital bands.
The limited liability form governed by Law 4 of 2009. It can be established by one or more individuals or legal entities, liability is limited to the capital contributed, and management can rest with a single manager. For consulting, design and software firms with few owners it is more practical than an SA because decision-making is simpler.
The foundation under Law 25 of 1995 is not a trading vehicle but an estate and succession planning tool. An initial endowment of at least 10,000 balboas must be allocated on formation. It is frequently placed above an operating company as a holding layer; its annual single fee is 400 balboas rather than 300.
| Criterion | Sociedad Anónima (SA) | SRL | Private foundation |
|---|---|---|---|
| Legal basis | Law 32 of 1927 | Law 4 of 2009 | Law 25 of 1995 |
| Founders | At least two | One or more | One founder is enough |
| Management | Board of at least three | One or more managers | Foundation council |
| Minimum capital or endowment | No statutory paid-in minimum | No statutory minimum | 10,000 balboas endowment |
| Annual single fee (tasa única) | 300 balboas | 300 balboas | 400 balboas |
| Typical use | Trading, holding, investment | Service exports, small ownership | Estate and succession planning |
No residence permit, citizenship or visit to Panama is required. The following points, however, are mandatory by law:
The whole procedure can be handled under power of attorney, so travelling to Panama is not necessary. With complete documents the registration typically takes one to two weeks.
The items below are amounts payable to the state. Professional fees for the resident agent, notary and consulting are separate. The registration duty consists of the Public Registry qualification fee plus a registration fee based on capital bands.
| Item | Amount | Note |
|---|---|---|
| Qualification fee | 10.00 balboas | Review of the registration filing |
| Registration fee | 50.00 balboas for the first USD 10,000 of capital | Plus 0.75 balboas for each additional 1,000 balboas or fraction |
| First single fee | 300.00 balboas | Payable on registration |
| Annual single fee (companies) | 300.00 balboas | Repeats every year |
| Annual single fee (foundations) | 400.00 balboas | Private interest foundations |
| Late payment surcharge | 50.00 balboas | If the single fee is paid after the deadline |
| Rehabilitation penalty | 1,000.00 balboas plus 25.00 balboas | After three unpaid years the company is suspended; penalty plus registry duty apply |
| Operation notice tax | 2% of capital | Minimum 100, maximum 60,000 balboas; only for businesses operating inside Panama |
Because the balboa is pegged to the US dollar at 1:1 and the dollar circulates in the country, these figures are also the dollar amounts. Declaring a high capital raises the registration duty directly, which is why authorised capital is usually kept around USD 10,000.
Panama taxes on a territorial basis: only Panamanian-source income is taxed. Services rendered from abroad to clients abroad and trade in goods that never enter Panama do not create corporate income tax while there is no office or staff in the country. Once there are local sales, employees or customers, the rates below apply.
| Tax | Rate | Scope |
|---|---|---|
| Corporate income tax | 25% | Taxable net income of legal entities |
| Corporate income tax (state-owned) | 30% | Companies where the state holds more than 40% |
| Personal income tax | 0% / 15% / 25% | Nil up to 11,000 balboas; 15% between 11,000 and 50,000; above that 5,850 balboas plus 25% |
| ITBMS (value added tax) | 7% | Standard rate on goods and services |
| ITBMS (lodging and alcohol) | 10% | Accommodation services and alcoholic beverages |
| ITBMS (tobacco) | 15% | Import and sale of tobacco products |
| Dividend withholding | 10% | Distributions out of Panamanian-source profits |
| Dividend withholding (exempt income) | 5% | Distributions out of income exempt from income tax |
| Dividend withholding (bearer shares) | 20% | Distributions to holders of bearer shares |
A complementary tax mechanism also applies when profits are retained: if the distribution stays below the statutory share of net profit for the period, 10% of the difference becomes payable. Food, medicines, basic school supplies, agricultural products, electricity, water and medical services are exempt from ITBMS.
Panama's international standing is the part of the decision most often skipped. The FATF removed the country from its increased-monitoring list on 27 October 2023 after confirming completion of its action plan. The Council of the European Union, however, still lists Panama in Annex I of the EU list of non-cooperative jurisdictions for tax purposes as of the 17 February 2026 update.
That distinction has practical consequences. EU member states committed to applying at least one defensive measure against listed jurisdictions: denying deduction of costs incurred there, applying controlled foreign company rules, imposing additional withholding tax or limiting the participation exemption on dividends. For an owner resident in Germany or the Netherlands, the treatment of payments from a Panamanian company may therefore differ. Where EU-internal substance is preferred, options such as company formation in Delaware or an EU jurisdiction are worth comparing.
Panama has no separate economic substance statute. Its obligations are built around record keeping, transparency and the resident agent. Three points matter:
Incorporation and banking are two separate projects. Panamanian banks are licensed, supervised institutions and apply know-your-customer rules strictly; account opening often takes longer than the company registration itself.
Banks ask for the articles, a good standing certificate, a board resolution, a beneficial owner declaration, a business plan, expected transaction volumes and a list of counterparty countries. The owners' income sources and existing banking history are examined as well. Consistency between the stated activity and the expected money flow is what decides approval.
Some banks request a meeting with the owner while others accept a video call. Approval usually takes two to six weeks, and banks expect a minimum balance depending on the account type. Running two applications in parallel avoids losing weeks after a rejection.
Relying on a single bank is a payment-infrastructure risk. Many owners keep a second account elsewhere; see offshore bank account opening in Dubai and our general personal and corporate bank account service for the alternatives.
The single annual fee is what keeps a Panamanian company alive, and its due date depends on the half-year in which the company was registered.
| Obligation | Timing | Who is covered |
|---|---|---|
| Annual single fee | Registered in the first half of the year: 15 July | All legal entities |
| Annual single fee | Registered in the second half of the year: 15 January | All legal entities |
| Resident agent fee | Contract anniversary | All legal entities |
| Accounting records and supporting documents | Provided to the resident agent annually, kept at least five years | Including companies with no local activity |
| Beneficial owner registry update | Whenever ownership changes | All legal entities |
| ITBMS return | Within the first 15 days of the month | Businesses making taxable local supplies |
| Corporate income tax return | Within the period following the financial year end | Entities with Panamanian-source income |
| Operation notice tax | Annual | Businesses trading inside Panama |
Panama was long described purely in terms of confidentiality because shareholder names do not appear in the public register. The current picture is more balanced: the articles, directors and resident agent are visible in the Public Registry, shareholder details are not published, yet beneficial owner information is filed through the resident agent into the national registry and is accessible to competent authorities.
Bearer shares are no longer freely held either. They sit under a custody regime with an authorised custodian, and distributions to bearer shareholders carry 20% withholding. Under automatic exchange of information, bank account data can be shared with the country where the account holder is tax resident. Panama therefore offers a structure closed to the public but open to institutions; claims of absolute anonymity are not accurate.
Buying and selling where goods never enter Panama, or move through the Colón Free Zone in transit, benefits from the country's logistics position. Canal traffic and free-zone warehousing simplify distribution into Latin America.
Owners who want to consolidate participations, property companies or intellectual property in one place often combine an SA with a foundation. For comparable purposes, Cayman Islands company registration is frequently evaluated alongside Panama.
Consulting, design, software development and training delivered remotely to clients abroad are not Panamanian-source income and create no corporate income tax. What matters in this model is where the service is actually produced and where the owner is tax resident.
The decision is rarely made on one country alone. The table sets the four centres side by side on the points that actually differ.
| Criterion | Panama | Belize | Cayman Islands | Delaware |
|---|---|---|---|---|
| Common vehicle | Sociedad Anónima | Belize IBC or LLC | Exempted company | Delaware LLC or Corp |
| Taxation logic | Territorial | Territorial | No direct taxes | US federal and state rules |
| Fixed annual state payment | 300 balboa single fee | Renewal fee | Annual government fee | Franchise tax and registered agent |
| Local presence requirement | Resident agent (lawyer) | Registered agent | Registered office | Registered agent |
| EU list status | Currently listed | Removed in 2024 | Not listed | Not listed |
| Main use case | Trading, holding, foundations | Fast, low-cost formation | Funds and investment vehicles | US market and payment rails |
A further alternative is company formation in the Bahamas, and the criteria that drive the choice of jurisdiction are set out in our overview of ideal countries for an offshore company.
Forming a company in Panama does not cancel obligations where the owner lives. Most countries require foreign shareholdings, bank accounts and income to be declared, and controlled foreign company rules can tax profits accumulated in low-tax jurisdictions in the owner's hands. Since account data is exchanged automatically, undeclared structures are identified.
Tax residence, the profit distribution plan and the annual filing calendar should therefore be designed together before the structure is set up. For a plan built around your own situation you can request a quote and consulting or contact our team directly.
Fees, rates and deadlines on this page are based on the tariff and qualification manual of the Panama Public Registry, the single fee, tariff and ITBMS publications of the Panamanian tax authority, the operation notice framework of Panamá Emprende, beneficial owner registry documentation of the Superintendency of Non-Financial Subjects, the FATF statement of 27 October 2023 and the Council of the European Union list update of 17 February 2026. Legislation changes, so verify current official sources before acting.
Minimum balances for corporate accounts differ by bank and account type, and transaction commissions plus monthly maintenance charges follow each bank's tariff. Banking cost should therefore be budgeted separately from formation cost.
What shortens the process is document quality: a coherent business plan, a list of counterparty countries, expected transaction volumes and source-of-funds evidence submitted together. For owners who want a second account in parallel we also arrange personal and corporate bank accounts and offshore accounts in Dubai.
The offshore and US alternatives usually assessed in the same file as Panama differ in taxation logic, fixed annual cost and banking access.
With complete documents the registration is usually finished within one to two weeks. The pace depends on the name availability result, whether the know-your-client file is ready and the workload at the notary and the Public Registry. Bank account opening is a separate process that can take a further two to six weeks.
The state portion is predictable: a 10 balboa qualification fee, a 50 balboa registration fee for the first USD 10,000 of capital and a 300 balboa single fee on registration. Including the resident agent, notary, apostille and banking support, a turnkey budget generally falls between USD 4,000 and 7,000. Raising the declared capital increases the registration duty.
Yes. Incorporation is handled remotely under a power of attorney granted to the resident agent, and there is no nationality or residence requirement. Banking varies: some banks accept a video call, others ask to meet the beneficial owner in person.
There is no statutory minimum paid-in capital and capital does not have to be deposited in a bank. In practice authorised capital is set around USD 10,000, because the registration fee rises by 0.75 balboas for every additional 1,000 balboas or fraction above the first USD 10,000.
The general corporate income tax rate is 25% of taxable net income. Companies in which the state holds more than 40% pay 30%. Because Panama applies territorial taxation, only Panamanian-source income falls under the rate; foreign-source income remains outside corporate tax where there is no activity in the country.
The FATF removed Panama from its increased-monitoring list on 27 October 2023. The country nevertheless remains in Annex I of the EU list of non-cooperative jurisdictions for tax purposes as of the 17 February 2026 update. For EU-resident owners this can mean denied cost deductions, controlled foreign company rules or additional withholding tax.
Yes. Formation by non-residents is fully lawful under Law 32 of 1927 and related legislation. Two conditions keep the structure clean: meeting the Panamanian duties of resident agent, single fee and accounting records, and completing the reporting obligations in the owner's country of residence.
The annual single fee is 300 balboas for companies and 400 balboas for private interest foundations. Entities registered in the first half of the year pay by 15 July each year; those registered in the second half pay by 15 January. Late payment adds a 50 balboa surcharge, and after three unpaid years the entity is suspended with a 1,000 balboa rehabilitation penalty plus a 25 balboa registry duty.
ITBMS is Panama's value added tax and the standard rate is 7%. Only entities making taxable supplies inside Panama register, and returns are filed within the first 15 days of the month. Accommodation services and alcoholic beverages carry 10%, tobacco products 15%. Food, medicines, basic school supplies, electricity, water and medical services are exempt.
Yes. Every legal entity must appoint a lawyer or law firm admitted in Panama as resident agent, and the articles cannot be registered without that acceptance. The resident agent also records beneficial owner data and keeps copies of the accounting records at its office.
Yes. Under Law 52 of 2016 as amended by Law 254 of 2021, all legal entities, including those with no activity in Panama, must keep accounting records and supporting documentation, hold them available for at least five years and provide copies to the resident agent. Ignoring this duty creates administrative penalty exposure.
Corporate account opening usually takes two to six weeks. Banks review the articles, a good standing certificate, a board resolution, a beneficial owner declaration, the business plan, expected transaction volumes and source-of-funds evidence. File consistency is the decisive factor, and applying to two banks in parallel reduces lost time.
A Sociedad Anónima needs at least two subscribers and a board of at least three members; it suits trading, holding and investment structures. An SRL under Law 4 of 2009 can be formed by one or more owners and run by a single manager, which is more practical for small service and software export businesses.
Bearer shares cannot be held freely. They are subject to a custody regime with an authorised custodian, and dividends paid to bearer shareholders are taxed at 20% instead of the standard rates. Registered shares create less friction in both banking and tax processes and are usually preferred.
Ease is a combination of timing, document load, fixed annual cost and banking access. Panama is practical for remote formation and a flat annual fee, Belize for speed and low cost, Delaware for access to US payment rails and Cayman for fund structures. The right answer depends on the target market and the owner's tax residence.
The foundation under Law 25 of 1995 is an estate and succession planning vehicle rather than a trading company. An endowment of at least 10,000 balboas must be allocated on formation and the annual single fee is 400 balboas. Because it can hold the shares of an operating company, it is often used as the top layer in family transfer plans.
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