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A Panama company is, in nearly every case, a sociedad anónima (S.A.) under Law 32 of 1927: a share company that persons of any nationality, whether or not they live in Panama, may form for any lawful purpose. Owners use it to hold shares and other assets, to invoice trade that takes place outside Panama and to run businesses inside the country. What draws international owners is the territorial principle: Panama taxes income produced within its territory, from whatever source and wherever it is received, and leaves income produced abroad outside the charge. The US dollar circulates as legal tender at par with the balboa.
Doing business in Panama itself is a separate matter. Commercial or industrial activity in the country needs an aviso de operación before it starts, and retail trade is reserved to Panamanians by birth, certain naturalised citizens and the companies they own. A company whose business is entirely abroad needs neither.
| Vehicle | Law | Who it suits | Owners on the public record |
|---|---|---|---|
| Sociedad anónima (S.A., Inc. or Corp.) | Law 32 of 1927 | Holding, international trading and most local businesses | No: share transfers are written in the company’s own register; directors and officers are registered |
| Sociedad de responsabilidad limitada (S. de R.L.) | Law 4 of 2009 | Two or more partners who prefer quotas to shares | Yes: every change of partners is registered |
| Private interest foundation | Law 25 of 1995 | Not a company, and outside this guide | Registered in the same mercantile section of the Registro Público |
| Branch of a foreign company | Law 32 of 1927, Article 90 | A company incorporated abroad that registers in Panama | Registered in the same mercantile section |
Most owners pick the S.A. because a sale of its shares is recorded only in the company’s books. How one is registered, from the pacto social to the RUC, is on Panama company formation.
| Tax | Rule for an S.A. |
|---|---|
| Income tax | 25% of net taxable income from Panamanian sources; income produced abroad is outside the charge (Código Fiscal, Article 694) |
| Dividend tax | 10% on Panamanian-source profits and 5% on foreign profits, withheld only by a company that needs an aviso de operación or has taxable income in Panama |
| ITBMS (VAT) | Standard rate of 7% on goods and services in Panama, higher on alcohol, lodging and tobacco |
| Tasa única | An annual corporate tax that every S.A. pays from registration onwards |
| Substance rule | From fiscal year 2027, members of a multinational group earning foreign passive income must show substance in Panama or pay 15% on that income (Law 526 of 2026) |
| Treaties | About seventeen double taxation conventions in force, listed by the Dirección General de Ingresos |
Panama’s place on the EU list has also moved. On 9 October 2026 the Council took Panama out of Annex I, the list of non-cooperative jurisdictions for tax purposes, and placed it in Annex II, where it waits for an in-depth review by the Global Forum. The list is revised twice a year, so check the current version before relying on it.
Two or more subscribers of legal age, of any nationality and living anywhere, sign the pacto social, and directors face no nationality or residence condition either. The board needs at least three different directors, and the company needs a President, a Secretary and a Treasurer, offices that one person may combine where the pacto allows. Every S.A. must have a resident agent, which can only be a Panamanian lawyer or law firm: it identifies the beneficial owners, holds a copy of the share register and receives the accounting records each year.
The agent files the beneficial owners in the Sistema Privado y Único de Registro de Beneficiarios Finales created by Law 129 of 2020, which only the agent and two designated officials of the Superintendency can open; who counts as a beneficial owner follows the control test of Law 23 of 2015. Shares are registered, or bearer shares that are fully paid and kept by an authorised custodian under Law 47 of 2013. Where you cannot fill the three board seats yourself, we arrange a nominee director or shareholder only through Panamanian lawyers, for whom acting or arranging for another person to act as director or shareholder is a supervised activity under Law 23 of 2015; the person appointed carries every duty and liability of a director under Law 32 of 1927, appears in the company’s registry entry when sitting on the board, and never takes your place as the beneficial owner that the resident agent files.
A company that leaves the tasa única unpaid for three years in a row loses its corporate rights, and unless it is reactivated within two years the Registro Público cancels it.
Banks in Panama are supervised by the Superintendencia de Bancos, and the country has no deposit insurance scheme, only a preference for small deposits if a bank is liquidated. Each bank sets its own route for companies: some take applications from abroad, while others ask a new foreign client to show a link with Panama. The Superintendency’s rules make every bank identify shareholders with 10% or more and any nominee director or officer supplied by a resident agent, and some banks treat an account as inactive after six months without movement. See bank accounts for Panama companies.
Register a new S.A. when you want to set its name, objects, share classes and board yourself; the steps are on how a Panama company is registered.
Buy a ready-made S.A., the sociedad shelf of Spanish-language searches, when the registration date itself counts with a tender, a supplier or a platform. It brings no tax advantage, and its tasa única history and records decide whether it is worth having. See ready-made shelf companies in Panama and our guide to off the shelf companies.
We register new Panamanian companies and supply ready-made ones, working with a Panamanian lawyer as resident agent. We prepare the pacto social or the transfer papers and the deeds for the Registro Público, help you assemble a bank application and, where we have a working contact at a suitable bank, introduce you, leaving the decision on the account to the bank.
It is Panama’s share company and does the job a corporation does elsewhere. S.A. stands for sociedad anónima, and the name, which may be in any language, must show that form; the Registro Público accepts S.A., Inc. or Corp. for it. The S.A. issues shares, is run by a board of at least three directors and acts through a President, a Secretary and a Treasurer.
Not on Annex I. Panama had been listed there for a foreign-source income exemption regime that the EU considered harmful. The Council’s revision of 9 October 2026 removed it from Annex I and moved it to Annex II, where it is shown as waiting for an in-depth review by the Global Forum. The Council usually revises the list in February and October.
The US dollar. It is legal tender in Panama at par with the balboa, banks in Panama may not refuse dollars for payments or deposits, and the IMF describes Panama as a fully dollarised economy with no central bank. A company’s pacto social may nevertheless state its capital in any currency, and Panamanian company law sets no minimum amount.
No. The aviso de operación is a sworn declaration confirmed through the PanamaEmprende system before a commercial or industrial activity begins in Panama. A company that holds assets or trades only outside Panama does not need one. The difference matters for tax too, because the dividend tax is withheld only by companies that need an aviso or have taxable income in Panama.
From fiscal year 2027 it applies to companies in Panama that belong to a multinational group and earn foreign dividends, interest, royalties, capital gains or rental income. They must report that income and show staff, premises, strategic decisions and operating expenditure in Panama, or pay 15% on it. A pure holding company needs adequate staff and premises in Panama plus the reporting.
Considering Panama for a holding or trading company? Tell us where the income will arise and who will own the company, through our contact page or on Telegram or WhatsApp at +48 663 247 166, and we will explain how the S.A. and the territorial rule would apply.