Panama company formation for non-residents

Why founders choose Panama

Panama has had a corporation law since 1927 and a long history as a base for regional holding and trading companies. Its Sociedad Anónima is flexible: shares can be issued in several classes, and the company can hold assets and do business anywhere.

The main attraction is territorial tax. Panama taxes only income from Panama sources, so a company that trades or invests entirely outside Panama pays no Panamanian income tax on that income.

The main drawback today is the EU tax list. Before choosing Panama, check whether you will deal with EU banks, customers or group companies.

Panama also uses the US dollar as legal tender alongside the balboa, which keeps pricing and accounting simple for dollar-based businesses. Its company law is civil law, written in Spanish, so the articles are drafted in Spanish with an English translation for you.

The EU list and what it means for banking

Panama is on the EU list of non-cooperative jurisdictions for tax purposes, confirmed in the Council's February 2026 update. The list covers countries that the EU considers have not met its tax good-governance standards.

Being on the list does not make a Panama company illegal or unusable. It does mean EU member states apply defensive measures to payments involving Panama. These can include refusing tax deductions, extra withholding tax, stricter controlled-company rules and extra reporting for advisers.

For banking, EU-based banks and payment providers often apply enhanced checks or decline Panama companies. If your customers or suppliers are in the EU, this can cost more than the tax you save. We tell you which measures apply to your plan before you pay.

Panama's anti-money-laundering standing is better. It left the FATF grey list in October 2023, and the EU removed it from its AML high-risk third country list in 2025.

Directors, officers and the resident agent

A Sociedad Anónima needs at least three directors and three officers: a president, a secretary and a treasurer. Directors can be of any nationality and live anywhere. One person can hold more than one officer role.

Every company must have a resident agent, which must be a Panamanian lawyer or law firm. The resident agent files the articles, keeps the due diligence and holds the beneficial ownership information.

If you do not have three directors, we arrange a professional director service. The director's name is disclosed to the registry, and the beneficial owners are disclosed to authorities.

The articles of incorporation are signed before a Panamanian notary and then registered with the Public Registry. The company exists from the date of registration. We send you the registered articles, the certificate of incorporation and the share certificates through the client portal.

Directors meet and act under the articles, and powers of attorney are common in Panama. If a director or attorney will operate the bank account, we set out who holds which powers so the bank sees a clear picture.

• Directors: at least 3
• Officers: president, secretary, treasurer
• Shareholders: 1 or more, any nationality
• Resident agent: Panamanian lawyer or law firm

Territorial tax and the annual franchise tax

Panama taxes company profits from Panama sources at 25%. Income from business done outside Panama, and from customers outside Panama, is generally not taxed there, subject to residency and source rules (confirm with your specialist).

Every company pays an annual franchise tax, the tasa única, of US$300 (B/.300) to the tax authority (DGI) under art. 318-A of the Fiscal Code. Companies registered from January to June pay by 15 July each year; those registered from July to December pay by 15 January. Your quote shows the franchise tax as its own line, for year 1 and for renewal, so the cost is clear from the start.

Your home country may treat the company as resident there, or tax its profits under controlled-company rules, especially if you manage it from home.

A company that earns Panama-source income registers for tax with the DGI and files an annual income tax return. A company with only foreign-source income usually has lighter tax filings in Panama, but the accounting-record rules still apply to it.

If you will manage the company from a country with controlled-company rules, get a short tax opinion there before you incorporate.

Registers, bearer shares and beneficial owners

The Public Registry shows the company's directors, officers and resident agent. Shareholders are not listed there.

Law 129 of 2020 created a private, single register of beneficial owners. The resident agent enters the information, and only the competent authority can consult it. This is privacy within the law.

Bearer shares are only allowed under a custody regime, where an authorised custodian holds the certificates and knows the owner. Most new companies simply issue registered shares.

Panama exchanges financial account information under the Common Reporting Standard. Assume the tax authority where you live can learn about the company and its bank accounts, and plan your own tax position on that basis.

Accounting records and annual upkeep

Law 254 of 2021 requires every Panama company to keep accounting records and supporting documents. Each year the company gives the resident agent a copy of the records, or the name of the person who keeps them and the address where they are held.

Fines for failing to do this are high, and a company can have its corporate rights suspended. We send reminders for the records and for the franchise tax.

Each year you renew the resident agent, pay the franchise tax and keep your records current. For banking, we introduce you to suitable banks or payment institutions and prepare the application. The bank decides.

If you ever stop using the company, close it properly rather than letting it lapse. A company that stops paying the franchise tax builds up surcharges and can be suspended, and that record can follow its owners in later bank checks.