Panama Company Formation Offshore For Non Residents

What if you could run a global business from a country that does not tax a single dollar you earn abroad? That is the promise of Panama offshore company formation. Since 1927, foreigners have used Panama company registration to protect assets, trade internationally, and bank in US dollars. You do not need to live in Panama or even visit. With a free name check, three days of processing, and one flat annual fee, you can own one of the world's most trusted offshore structures. Panama is one of the oldest and most tested corporate homes on earth.

For expert help with your Panama company incorporation, turn to Offshore Protection. With over 25 years of experience, our team guides you through every step.

Why Panama Works for Foreigners

Can a foreigner start a business in Panama? Yes — and that is the whole point. Starting a business in Panama places no nationality or residency rules on owners or directors. Panama offers you the freedom to set up a company in Panama as a foreigner from your living room in Los Angeles, London, or Lagos, and finish the whole company registration remotely.

Here is why so many international entrepreneurs choose it:

• A strategic location. Panama sits between two continents and two oceans. The Panama Canal makes it a natural hub for trade and logistics, and Panama City is a modern regional banking centre.
• A pro-business climate. Decades of stable, dollar-based policy have built a favorable business environment that foreign investors trust.
• Dollars, not drama. The US dollar is legal tender. No currency risk. No exchange controls.
• A real track record. Panama has registered companies under the same corporate statute since 1927 — longer than almost any rival jurisdiction for offshore structuring.
• More than companies. Panama also offers private interest foundations, residency visas, and strong offshore banking, so your structure can grow with you.

In short: the Republic of Panama gives non-residents a stable, dollar-based home to do business internationally.

Advantages of a Panama Corporation

Why has this one offshore jurisdiction outlasted almost every rival? Because the basics still work.

No Tax on Foreign Income

Panama uses a territorial tax system. Simple version: the tax system only taxes money made inside Panama. Income earned outside of Panama pays no Panamanian income tax and, for a standalone corporation, files no Panamanian tax return. You owe one flat charge — the US$300 annual tasa única, set by Article 318-A of the Fiscal Code. (One narrow exception now applies to companies inside multinational groups — see the 2026 section below.)

Real Privacy, Done Legally

Shareholders never appear in any public registry. Beneficial owners sit in a closed government database that the public, foreign governments, private litigants, and creditors cannot search. Want directors private too? Use our nominee directors — or a nominee shareholder for an extra layer — and stay in control through pre-signed, undated resignation letters.

Flexible Corporate Structure

The corporation is the most popular type of company for foreigners, and its corporate structure is refreshingly flexible. Share capital can be issued in any currency, any class, with or without par value. You need just one shareholder and three directors — and a single person can hold every officer role. Meetings can happen anywhere in the world, and corporate directors are allowed.

A Corporate Veil Courts Respect

Panamanian courts treat your corporation as truly separate from you, making "piercing the corporate veil" exceptionally difficult absent fraud. Your personal assets stay insulated from company liabilities.

Favourable Incorporation Laws

Law 32 of 1927 was so successful it became the model most other offshore centres copied. The incorporation process is quick and the rules have barely changed in a century.

Stable and Bankable Again

Panama was removed from the FATF grey list in October 2023, and the EU deleted it from the high-risk money-laundering list under Commission Delegated Regulation (EU) 2025/1184, in force 5 August 2025. Banks treat Panama structures as reputable again.

Offshore Banking and Currency

Where will your money actually sit? Wherever you want. Your corporation can open a bank account in Panama or bank anywhere else in the world — accounts can be held within Panama or offshore.

• Strong oversight. The Superintendency of Banks supervises dozens of local and international banks aligned with international standards.
• Full service. Multi-currency accounts, online banking, and wealth management.
• US dollars. Official USD use removes exchange-rate risk and exchange controls entirely.
• We introduce you. Every formation includes a bank account introduction, and we support American owners — a group many banks turn away.

What Panama Companies Actually Do

A corporation can be formed for any lawful purpose. Once you have a company in Panama, the most common business operations are:

• Holding company for investments or other companies
• Offshore savings and investment accounts for your offshore business
• Private Interest Foundations paired with a corporation for asset protection
• Forex and stock trading
• E-commerce and internet businesses
• Professional and consulting services in Panama or abroad
• Licensing and intellectual property
• Vessel ownership — Panama runs the world's largest shipping registry

Standard Panama Company Formation Cost

What does company formation in Panama actually cost? Our package is a complete, ready-to-operate business setup — not a bare registration. A standard Panama company formation with us starts from US$1,700, with an annual renewal from US$1,495 covering your registered agent, registered office, and the US$300 government tasa única.

PANAMA COMPANY PACKAGE

From US$1,700

Incorporation in 3 days · Annual renewal from US$1,495

✔ Unlimited name availability check with the Public Registry
✔ Drafting and notarisation of Articles of Incorporation
✔ Government registration fees (first year)
✔ Registered agent and registered office (first year)
✔ Three nominee directors/officers appointed
✔ Full set of company documents with share certificates
✔ Certified English translations of Spanish incorporation documents
✔ Bank account introduction and free lawyer support

Get Started →

Need it faster? Ask about expedited incorporation. Need extra documents for banking — a Certificate of Incumbency or a Certificate of Good Standing? We retrieve those on request.

Panama's Legal Framework in Plain English

Six laws matter. Read these and you know more than most providers will tell you.

1. Law 32 of 1927 — the foundation. Created the Panamanian corporation and became the model others copied.
2. Law 47 of 2013, as amended by Law 18 of 2015 — bearer shares survive only under custody. The articles must expressly adopt the custody regime and the certificates must sit with an authorised custodian. Articles that never opted in were amended by operation of law on 31 December 2015 to bar bearer shares entirely.
3. Law 52 of 2016 — private accounting records, retained five years.
4. Law 129 of 2020 — beneficial owners are filed in a closed, non-public registry.
5. Law 254 of 2021 — a copy of your records goes to your resident agent each year by 30 April. Regulated by Executive Decree 177 of 30 December 2024, which replaced Decrees 258 of 2018 and 168 of 2024.
6. Law 526 of 28 May 2026 — new economic-substance rules for a narrow slice of companies. See the 2026 section below.

The Panama Company Registration Process, Step by Step

How long does it really take? About three days once we have your documents. Here is the full registration process to form a company in Panama, start to finish:

1. Pick a name. We run a free company name availability check against the Public Registry. The name may be in any language but must end in Corporation, Corp., Incorporated, Inc., Sociedad Anónima, or S.A.
2. Send your documents. See the checklist below.
3. We draft and file. Two subscribers from our law firm sign the Articles of Incorporation, which are notarised and submitted to the Public Registry. Each subscriber holds a right to one share by law and signs that right over to you the moment the corporation exists.
4. You are registered. We obtain your Taxpayer Identification Number (RUC) from the Dirección General de Ingresos and deliver scans within 3 to 5 business days. Apostilled hard copies follow by courier.
5. Open your bank account. We provide a corporate bank account introduction and walk you through each bank's KYC.

Documents We Need From You

For every director, shareholder, and beneficial owner:

• Certified copy of a valid passport or government ID
• Certified proof of address, less than 3 months old
• Completed KYC form from your Offshore Protection consultant
• A brief description of the intended business activities and source of funds

That is it. Clean paperwork is what turns a slow file into a smooth incorporation process. No visit to Panama. No minimum deposit. No local residency.

Types of Business Entities in Panama

Panama recognises several business entities, but most foreigners pick the Corporation.

Sociedad Anónima (S.A.)

The classic choice for trading, holding, and investing. Governed by Law 32 of 1927, it offers limited liability, no minimum capital, flexible share classes, and no requirement for resident shareholders or directors.

Private Interest Foundation

A Private Interest Foundation works like a trust: it owns assets for the benefit of named beneficiaries. Governed by Law 25 of 1995, it is the go-to estate-planning tool and pairs perfectly with an S.A. Note that a foundation pays a higher government charge than a corporation: US$350 on registration and US$400 every year after.

Limited Liability Company (S.R.L.)

A Limited Liability Company, locally a Sociedad de Responsabilidad Limitada, is governed by Law 4 of 2009. It gives members limited liability with a more rigid management structure than an S.A., and defines ownership by member contribution — often useful in US tax planning.

Limited Partnership

Used mainly for funds and joint ventures. Less common than the S.A. — ask us whether it fits your case.

Key Corporate Features

Taxes: What You Pay and What You Do Not

Here is the part that makes people book a call. If your company conducts its business outside of Panama, neither the corporation nor its shareholder owes Panamanian tax on that income. A non-resident Panamanian corporation pays:

• No income tax · No capital gains tax · No withholding tax
• No VAT or sales tax · No tax on dividends, shares, or transfers
• No estate, gift, stamp, inventory, or succession tax · No tax return to file

One qualifier, new since May 2026: a Panama entity that belongs to a multinational group and earns foreign-source passive income must file an annual return from fiscal period 2027 whether or not tax is due. Standalone companies are unaffected. The 2026 section below explains exactly who is caught.

You pay exactly one thing: the US$300 annual tasa única. Miss it and a US$50 surcharge applies per year or part-year; miss two consecutive years and a US$300 fine is added; miss three and your corporate rights are suspended until you pay a US$1,000 reactivation fine plus the arrears and registry duty.

Income earned inside Panama is taxed at 25%. Panama has 17 double taxation agreements in force — Mexico, Barbados, Qatar, Spain, Luxembourg, the Netherlands, Singapore, France, South Korea, Portugal, Ireland, the Czech Republic, the UAE, the United Kingdom, Israel, Italy, and Vietnam. Panama has no double tax treaty with the United States; the two countries exchange information under a TIEA and a FATCA agreement instead.

Annual Compliance: The Part Most Websites Get Wrong

Here is a myth worth killing: "Panama companies have zero paperwork." Not true since 2017 — and believing it can cost you up to US$1,000,000 in fines plus suspension of corporate rights, under Law 254 of 2021.

Your Real Annual Compliance Is Three Things

1. Keep books. Private accounting records and supporting documents — contracts, invoices, receipts — retained at least five years.
2. Send a copy to your resident agent by 30 April each year. Pure holding companies can file a simple statement of assets, values, and income. Your agent then reports non-compliant entities to the DGI.
3. Pay the US$300 tasa única.

What Is Still Not Required

• No tax return in Panama on foreign income — unless Law 526 catches you
• No audit
• No public filing of accounts
• No annual return

Miss the records obligation and the penalties are real: fines of US$5,000 to US$1,000,000 on the entity, US$5,000 to US$100,000 on the resident agent, suspension of corporate rights, and — at the far end — forced administrative liquidation. As your formation provider we handle the calendar, send reminders, and prepare the records statement, so your company never falls out of good standing and can always produce a Certificate of Good Standing when a bank asks.

Privacy in 2026: What Is Public, What Is Private

Panama remains one of the strongest jurisdictions for lawful financial privacy — but any provider still advertising "total anonymity" is describing a Panama that no longer exists. Here is where the lines actually sit.

What Is Public

The Public Registry of Panama is an open registry. The Articles of Incorporation — including directors, officers, and the registered agent — are searchable. This is why most clients use nominee directors while retaining control through pre-signed resignation letters and a general power of attorney.

What Is Private

• Shareholders. The share register is kept privately at the registered office and filed nowhere.
• Beneficial owners. Under Law 129 of 2020, resident agents file beneficial ownership data in a closed database run by the Superintendency of Non-Financial Subjects. Only authorised Panamanian authorities may query it.
• Accounting records. Held privately by the company and resident agent — never filed publicly.

Bearer Shares: Still Legal, No Longer Anonymous

Law 47 of 2013, accelerated by Law 18 of 2015, immobilised bearer shares. A corporation may still issue them, but only if its articles or a registered board resolution expressly adopt the custody regime, and every certificate must be delivered to an authorised custodian — a Panamanian lawyer, bank, trust company, or brokerage — within 20 days, together with a sworn declaration naming the true owner. Companies that never opted in had their articles amended by law on 31 December 2015 to prohibit them outright. In practice bearer shares offer no privacy advantage today and make banking considerably harder, so we recommend registered shares plus nominee services for every new formation.

International Information Exchange

Panama participates in the OECD Common Reporting Standard and has a FATCA agreement with the United States. Panamanian banks report account information on foreign tax residents to their home countries — the same standard as virtually every banking jurisdiction. A Panama structure gives you asset protection, commercial confidentiality, and tax efficiency inside a compliant framework, not concealment from your home tax authority. US persons still file Form 5471 and FBAR. Getting this right is exactly where experience matters: book a consultation.

How Is Panama Company Formation Changing in 2026?

The development most providers have not updated for: on 28 May 2026 Panama promulgated Law 526 of 2026, published the same day in Gaceta Oficial Digital No. 30534-B after passing third debate 70–0. It adds a new chapter — articles 707-A to 707-Ñ — to the Fiscal Code, introducing Panama's first general economic substance test. Entities that fail it are taxed at a flat, definitive 15% on net foreign-source passive income. The rules bite from fiscal period 2027.

Read the scope carefully, because most owners are not caught. Law 526 applies only where two conditions hold at once: the company is part of a multinational group — two or more entities linked by ownership or control and tax-resident in different jurisdictions — and it earns one of six listed categories of foreign-source passive income: dividends, interest, royalties, capital gains, real-estate income, or other movable-capital income. A standalone Panama corporation owned by one individual, trading actively, is outside the regime entirely.

The trap worth knowing about: there is no size threshold. Unlike transfer-pricing rules or the OECD's Pillar Two, Law 526 does not wait for €750 million of revenue — two related entities in two countries is enough. A Panama holding company over a single foreign subsidiary counts. That is the part small owners misread.

The relief worth knowing about: pure holding companies and real-estate holding entities get a reduced test. They are excused from the strategic-decision and local-operating-cost conditions, and need only adequate personnel and premises in Panama plus annual reporting. A reduced test is not an exemption — a private interest foundation holding a foreign property still needs minimum local presence and still files.

Who is carved out completely: Panama-flagged shipping entities under article 707-M, and regulated banks, securities firms, insurers, reinsurers, and fund managers under article 707-N — though captive insurers inside multinational groups do not get the exclusion, and article 707-Ñ requires the carve-out to be evidenced before the Ministry of Economy and Finance.

Our insight from 25 years of formations: the clients who will feel this are not the small e-commerce or consulting owners — they are the group holding structures where a Panama entity sits between an operating company in one country and a parent in another, collecting dividends or royalties with no staff and no office. We spent two decades building exactly those structures on the assumption that territoriality alone was enough. It no longer is for that narrow band. The good news is that article 707-G expressly lets human and physical resources be outsourced to a provider operating in Panama — outsourcing abroad does not count — which makes substance a solvable, priceable problem rather than a reason to redomicile. There is also a foreign tax credit under article 707-H, capped at the local liability, and an anti-abuse clause under article 707-K that lets the Ministry disregard arrangements built purely for tax advantage.

Our prediction, hedged: Panama stayed on the EU's Annex I tax list at the 17 February 2026 review — President Mulino said publicly the government had expected that and was preparing for the next round. The stated purpose of Law 526 is to secure removal at the October 2026 revision. Costa Rica and Uruguay kept territorial taxation and were delisted after similar reforms, so the path exists — but the decision rests with EU member states, not Panama, so treat the timing as a target rather than a schedule.

Business Expansion and Foreign Investment

Panama does not just host your company — it can host you. Foreign investors gain a pathway to permanent residency through real estate investment.

The country also hosts multiple Free Trade Zones, including the Colón Free Zone — the largest in the Americas. Businesses there often enjoy exemptions from local taxes and direct access to global shipping via the canal. It is one more reason Panama offshore companies keep winning over rival jurisdictions, and why Panama incorporation still leads the region.

Frequently Asked Questions

• Can a foreigner start a business in Panama?

  Yes. Foreigners can own 100% of a Panama corporation. Directors and shareholders may be of any nationality and never need to set foot in Panama. The entire company registration is handled remotely in about three days. Note that a small number of retail and professional occupations are reserved for Panamanian nationals under local law, but these restrictions do not affect offshore or international trading companies.

• How much does it cost to form and renew a Panama company?

  Formation starts from US$1,700 all-in, including government fees, registered agent and office, three nominee directors, the full document set with English translations, and a bank account introduction. Annual renewal starts from US$1,495 and covers your registered agent, registered office, and the US$300 government tasa única. No hidden charges and no annual return to file.

• Does Panama's new economic substance law affect my company?

  Probably not. Law 526 of 28 May 2026 applies only where two things are true at once: your company belongs to a multinational group — two or more entities linked by ownership or control and tax-resident in different countries — and it earns foreign-source passive income such as dividends, interest, royalties, capital gains or rental income. A standalone corporation owned by an individual and trading actively is outside the regime. Be aware there is no size threshold: a Panama holding company over a single foreign subsidiary is enough to be caught. Companies in scope must show adequate people and premises in Panama from fiscal period 2027 or pay a flat 15% on the net passive income, and pure holding entities qualify for a lighter test. Talk to us if your Panama entity sits inside a wider group structure.

• Is a Panamanian corporation legal?

  Yes. Forming and owning a corporation in Panama is fully legal. Panama exited the FATF grey list in October 2023 and the EU high-risk money-laundering list in August 2025. What matters is using the structure compliantly — you must still meet your home country's tax reporting obligations, which we help you plan for.

• Is Panama still on the EU blacklist?

  Two different lists get confused here. Panama was removed from the EU's high-risk money-laundering list in 2025 and from the FATF grey list in 2023. It does remain on the EU's separate list of non-cooperative jurisdictions for tax purposes, where it was retained at the 17 February 2026 review. Panama passed Law 526 of 2026 specifically to secure removal, and the next revision is scheduled for October 2026. In practice the tax listing affects certain EU-facing reporting and withholding rules rather than your ability to form or bank a Panama company.

• Do I need to visit or live in Panama to form a company?

  No. The entire formation is handled remotely. There are no nationality or residency requirements for directors or shareholders, and meetings can be held anywhere in the world.

• How long does Panama company formation take?

  Approximately three working days from receipt of your completed due diligence documents. Scanned incorporation documents are delivered first, with apostilled hard copies following by courier.

• What taxes does a Panama offshore corporation pay?

  Panama taxes on a territorial basis: income earned outside Panama is not taxed in Panama. A non-resident corporation pays no Panamanian income tax, capital gains tax, withholding tax, or VAT on foreign-source income — only the flat US$300 annual tasa única set by Article 318-A of the Fiscal Code. Panamanian-source income is taxed at 25%. From fiscal period 2027, entities inside multinational groups earning foreign-source passive income must also file an annual return under Law 526 of 2026.

• Does a Panama company have to keep accounting records?

  Yes. Under Law 52 of 2016 as amended by Law 254 of 2021 and regulated by Executive Decree 177 of 2024, every Panama entity must keep accounting records and supporting documents for five years and provide a copy to its resident agent annually by 30 April. There is no audit, no tax return for foreign income, and no public filing — the records remain private. Penalties run from US$5,000 to US$1,000,000 for the entity, plus suspension of corporate rights.

• Are the owners of a Panama company public?

  No. Shareholders are recorded only in the company's private share register, and beneficial owners are filed in a closed government database accessible solely to authorised Panamanian authorities. Directors and officers do appear in the Public Registry, which is why nominee director services are commonly used.

• Are bearer shares still available in Panama?

  Technically yes, but not in the form people imagine. Under Law 47 of 2013 as amended by Law 18 of 2015, a corporation may issue bearer shares only if its articles or a registered board resolution expressly adopt the custody regime, and each certificate must be delivered to an authorised custodian within 20 days along with a sworn declaration identifying the true owner. Companies that never opted in had their articles amended by operation of law on 31 December 2015 to prohibit them. Because the custodian records the owner anyway and banks treat bearer structures as high risk, we recommend registered shares with nominee services instead.

• Can I open a bank account for my corporation?

  Yes. Panamanian and international banks accept Panama corporations, including those with American owners, subject to standard KYC: company documents, identification of directors, shareholders and beneficial owners, and proof of source of funds. We provide bank introductions as part of every formation.

• What is the minimum capital requirement?

  There is no minimum paid-in capital and no requirement to deposit capital before incorporation. The standard authorised capital is US$10,000 divided into 100 shares of US$100, which keeps registration duties at the minimum. Any amount and any currency may be used.

Panama Company Registration with Offshore Protection

So, is Panama right for you? You have seen the wins: zero tax on income earned outside Panama, private ownership, and company incorporation in three days, even as a foreigner with no residency. An offshore company in Panama gives you a credible base for international business while keeping your assets protected. You also know the real rules — keep your books, pay the tasa única, and check whether the new substance regime touches you. Our offshore company formation service handles every step. Ready? Book a free consultation and start your name check today.