Incorporate · Americas

Company Formation in Panama

Territorial-tax hub with a well-known corporation and a USD economy. Review the legal form, tax position, treaty network and indicative cost, then talk to one team that structures it end to end.

Licensed CSP
50+ yrs combined experience
15+ jurisdictions

Corporate tax: 25% on Panama-source income; 0% on foreign-source income
VAT / GST: ITBMS of 7%
Formation: 3-7 days
Foreign ownership: 100% permitted
Tax treaties: 17+
Setup cost: USD 1,500 - 4,000

At a glance

Common entity: Corporation (Sociedad Anonima)
Formation time: 3-7 days
Setup cost: USD 1,500 - 4,000
Annual cost: USD 1,000 - 3,000
Foreign ownership: 100% permitted
Tax treaties: 17+

Holding companyTradingIP and licensingConsulting and servicesE-commerce

Best for

Territorial-tax holding and trading structures
USD-denominated Latin American operations
Foreign-source income structuring

Less ideal for

Founders needing a broad treaty network
Those wanting easy first-time banking

Legal and formation

Legal system	Civil law
Common entity types	Corporation (Sociedad Anonima), Limited Liability Company (SRL)
Formation timeline	3-7 days
Minimum capital	None (nominal authorised capital)
Foreign ownership	100% permitted
Minimum shareholders	1
Minimum directors	3 directors for a corporation
Local presence	Registered agent (a Panamanian lawyer or firm) and registered office required
Public registry	Directors on the public register; shareholders and beneficial owners on non-public records
Audit	No general statutory audit for most companies

Tax profile

Corporate income tax	25% on Panama-source income; 0% on foreign-source income (territorial system)
VAT / GST	ITBMS of 7%
Withholding, dividends	5% to 10% on Panama-source profits; foreign-source generally exempt
Withholding, interest	12.5% effective (treaty reduced)
Withholding, royalties	12.5% effective (treaty reduced)
Capital gains	10% on Panama-source gains (fixed rules for share sales)
Territorial system	Yes
CFC rules	No
Participation exemption	Foreign-source income outside the tax net under the territorial system

Every figure above is indicative. Rates, thresholds, minimum capital, ownership rules and timelines change and vary by activity, licence and structure. They are confirmed with the relevant authority and in a tailored quote before you rely on them. This is general information, not legal or tax advice.

How to set up in Panama

1
Engage a Panamanian registered agent (law firm)
2
Reserve the company name and prepare the articles of incorporation
3
Appoint directors and officers and complete KYC
4
Register the deed with the Public Registry
5
Register for tax where local activity applies and open a bank account

Banking reality

Panama has a substantial banking sector, but onboarding is stringent with detailed KYC and source-of-funds review, often requiring an in-person meeting; approvals can take several weeks, so many owners also use EMIs.