Blog · 2026-08-06
How to register a company in Panama in 2026
Territorial taxation, SA versus SRL, realistic timelines and an honest look at the risks - including the EU blacklist Panama still has not left
Panama is one of the oldest and most heavily used jurisdictions for international structures: its corporation law has been in force since 1927, the economy runs on the US dollar, and its banking hub is the largest in the region. But the rules have changed substantially in the decade since the Panama Papers: there is now a beneficial ownership registry, an annual obligation to hand accounting records to your resident agent, and, as of 2026, economic substance requirements for certain companies. Here is how it all actually works as of August 2026 - no marketing fairy tales.
Why Panama at all
The headline argument is territorial taxation. The 25% corporate income tax applies only to income earned from sources inside Panama. Foreign income is simply outside the tax net: if your company serves clients in Europe, the US or Asia and does no business inside the country, its Panamanian tax base is zero. This is not an incentive or a special regime that could be repealed with one decree - it is the basic architecture of the tax system. We break it down in detail on our Panama taxes page.
The second argument is financial infrastructure. Around 60 banks operate in the country with total assets of roughly 145 billion dollars as of late 2025, the US dollar is legal tender, and there are no currency controls.
The third is lawful confidentiality. The shareholder register is not public, and beneficial owners are reported to a closed government registry (Law 129 of 2020) accessible only to competent authorities. Nominee directors are legal and widely used.
One honest caveat up front: Panama is still on the EU tax blacklist, and that affects anyone dealing with European counterparties. More on that below - glossing over it would be dishonest.
Company forms: SA or SRL
In practice the choice comes down to two vehicles: the Sociedad Anonima (SA, a corporation) and the Sociedad de Responsabilidad Limitada (SRL, an LLC analogue).
| Criterion | SA (corporation) | SRL (LLC analogue) |
|---|---|---|
| Minimum owners | 1 shareholder | 2 members |
| Directors / management | Minimum 3 directors, any nationality or residence | Flexible structure run by administrators |
| Paid-in capital | Not required | Not required |
| Owner visibility | Shareholders not on the public registry | Members appear on the registry |
| US tax classification | Per se corporation, no pass-through option | Can elect pass-through treatment (check-the-box) |
For 90% of use cases - holding structures, international services, asset ownership - the SA is the default: it is the classic vehicle every bank and lawyer knows. The SRL mainly makes sense for US tax residents who need pass-through treatment, and for anyone unwilling to assemble a three-person board.
Requirements in 2026
- At least 3 directors for an SA - individuals of any nationality, nominees permitted.
- At least 1 shareholder - an individual or a legal entity.
- A resident agent - a licensed Panamanian attorney or law firm. Mandatory for every company, with no way around it.
- A registered address in Panama.
- KYC on beneficial owners: passport, proof of address, description of source of funds. The agent files the beneficial owner's details with the closed government registry.
- Bearer shares formally still exist but must be immobilized with a licensed custodian - they no longer provide anonymity.
There is no minimum paid-in capital requirement: the standard authorized capital of 10,000 dollars never has to be deposited.
Step-by-step process and timeline
Step 1. Name
Check availability at the Public Registry and reserve the name if needed. It must include a corporate suffix (SA, Corp, Inc).
Step 2. KYC and documents
Collect documents on beneficial owners, directors and shareholders. Usually 1-3 days if the paperwork is in order.
Step 3. Articles of incorporation
The resident agent drafts the pacto social (articles), which is executed before a Panamanian notary. No personal visit is required - everything runs on a power of attorney.
Step 4. Public Registry filing
Standard processing takes 2-5 business days; an express fee gets it done in 1 day.
Step 5. Tax number and licenses
The company obtains its RUC (tax ID). The Aviso de Operacion (commercial operations notice) is only needed by companies actually doing business inside Panama - purely offshore structures do not require one.
Step 6. Bank account
The longest and least predictable stage: Panamanian banks have vetted clients aggressively since 2016, and fully remote onboarding is not available everywhere. A realistic timeline starts at several weeks. We work through bank pre-approval before any documents are filed - the mechanics are described on our Panama business accounts page.
Bottom line: the company itself takes 1-3 weeks end to end; company plus account, 4-8 weeks or more.
Taxes and reporting in 2026
| Charge | Rate / amount | Who it applies to |
|---|---|---|
| Corporate income tax | 25% | Panama-source income only |
| Franchise tax (tasa unica) | $300 per year | Every corporation, no exceptions |
| Dividend tax | 10% on Panama-source income, 5% on foreign-source | Only companies holding an Aviso de Operacion |
| ITBMS (VAT equivalent) | 7% | Sales of goods and services inside Panama |
| Operations notice tax | 2% of net worth, $100 minimum, $60,000 cap | Only companies operating inside the country |
The franchise tax is due annually: by July 15 for companies incorporated in the first half of the year, by January 15 for those incorporated in the second half. Late payment triggers penalties and eventually suspension in the registry.
The zero-reporting myth died back in 2021. Under Law 254, offshore companies must keep accounting records and deliver copies to their resident agent by April 30 each year for the previous fiscal year. Records must be retained for at least 5 years. Fines start at 5,000 dollars and reach 1 million in severe cases, on top of suspension of corporate rights. That said, no audit and no tax return are required as long as there is no Panama-source income.
New in 2026: Law 526, published on May 28, 2026, introduces economic substance requirements for Panamanian companies that belong to multinational groups and earn passive income from abroad (dividends, interest, royalties). Without real presence in Panama, that income becomes subject to a 15% tax starting from fiscal year 2027. Note the boundaries: the law targets members of multinational groups. A standalone company running an active business - services, trading, consulting - is not affected.
What it costs
Our Panama fees are flat, with no surprise add-ons at signing:
| Package | Price |
|---|---|
| Company registration, basic package | $5,000 |
| Registration with nominee services | $11,600 |
| Registration with bank account (pre-approval) | $12,900 |
| Name reservation | $100 |
The full contents of each package are listed on our Panama company registration page. If you are not sure Panama is the right fit for your case, compare it with other options in our company registration section covering all jurisdictions.
Reputation: the Panama Papers and the lists
This is usually buried in fine print. We will put it in bold instead.
The Panama Papers case is legally closed: in June 2024 a Panamanian court acquitted all 28 defendants in the Mossack Fonseca trial, including Jurgen Mossack, after finding the evidence had been obtained in breach of chain-of-custody rules. The reputational residue in bank compliance systems remains, though - the word Panama in a counterparty's name still triggers manual review at some European banks.
On the anti-money-laundering front the news is good: Panama left the FATF grey list in October 2023 and was removed from the EU's high-risk AML list on June 10, 2025.
The EU tax list is a different story, and you should know it before incorporating: Panama remains on the EU blacklist (Annex I). At the February 17, 2026 review it was kept on - the list now holds 10 jurisdictions, including Panama, Russia and Vietnam. The next review is scheduled for October 2026, and Law 526 on substance was passed precisely to get Panama off the list. The practical consequence: EU member states apply defensive measures to payments made to Panamanian companies, ranging from denial of expense deductions to elevated withholding, depending on the country. If your key counterparties sit in the EU, model the cost before you incorporate.
Who Panama works for and who it does not
It works for:
- International services and consulting with clients outside the EU - the territorial system delivers its full value here.
- Holding structures for assets in Latin America and the US.
- Shipping and maritime business - the Panamanian flag remains the largest in the world.
- Real businesses operating inside Panama, and anyone pursuing local residency: the country offers one of the most convenient company-plus-residency combinations, detailed on our Panama country page.
It does not work for:
- Businesses with constant settlement flows to and from EU counterparties - the blacklist makes every payment slower and more expensive.
- Anyone expecting zero reporting - bookkeeping is mandatory and skipping it draws real fines.
- Passive asset holdings inside multinational groups with no appetite for building substance - from 2027 that means a 15% tax.
- Anyone who needs a bank account within a week - Panamanian bank compliance is never fast.
Panama in 2026 is not the anonymous offshore haven of the 2010s. It is a functioning territorial jurisdiction with clear rules and one large drawback in the form of the EU list. If your geography does not overlap with the EU, the combination of cost, taxes and infrastructure here is still among the best in the world.
FAQ
How long does it take to register a company in Panama?
Do I need to travel to Panama to incorporate?
Does a Panama company pay tax on foreign income?
Panama is on the EU blacklist - how serious is that?
What reporting is mandatory for a Panama company?
Which should I choose - SA or SRL?
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