How to register a company in Panama in 2026

Zero tax on foreign income and a USD 300 annual state fee, but Panama sits on the EU blacklist and 290,000 local entities face dissolution. Structures, steps, fees, taxes, banks and residency.

A Panama company pays no income tax on money earned outside Panama, and the mandatory state fee to keep it alive is $300 a year. The country has lived on that formula for almost a century: its corporation law dates from 1927. But 2026 showed that a cheap jurisdiction comes with a price tag of its own. On 17 February the Council of the EU kept Panama on its tax blacklist, and on 27 February the Ministry of Economy and Finance began dissolving delinquent companies: 290,534 legal entities are on the list.

The takeaway for a business owner is simple. Panama still offers zero tax on foreign income and a dollar economy, but it will not be the anonymous haven of the 2000s again: owners go into a closed register, the books go to the registered agent, and from 2027 some companies will pay 15% tax without real presence in the country. Below: how to register a company in Panama in 2026, what it costs, which taxes apply and where people most often stumble.

A technical note: Panama's currency is the balboa (written B/. in the laws), pegged one to one to the US dollar and issued only as coins. So $300 in a statute simply means $300.

Why open a company in Panama, and who should not

The main reason is the territorial tax system. Article 694 of Panama's Tax Code taxes only income earned inside the country. A company that sells services to clients in Asia or the US and does not operate on the Panamanian market pays no income tax in Panama. This is not a temporary incentive or a special regime; it is the foundation of the tax system, covered in more detail on our page on taxes in Panama.

The second reason is banking. Panama's international banking centre ended 2025 with $163 billion in assets and 63 licensed banks, according to the Superintendencia de Bancos, the local bank regulator. The economy runs on dollars, and the country holds an investment-grade credit rating.

The third reason is relocation: property and deposits for an investor residence permit can be held through a Panama company or foundation. More on that in the residency section below and on our page about living in Panama.

Who it suits. Consulting, IT and other international services with clients outside the EU. Trading in goods that never enter Panama: the Tax Code expressly treats such resales as foreign income. Holding companies for property and stakes in Latin America. And people moving to Panama themselves who want to hold assets through a local structure.

Who it does not suit. Businesses that regularly invoice EU companies: because of the blacklist, every such payment attracts extra scrutiny. Anyone who wants anonymity: since 2020, Law 129 requires owners to be entered in a beneficial ownership register. Holding companies inside international groups that are not ready to keep a director and premises in Panama: from 2027 that means 15% tax. And Russian tax residents who are not prepared for extra reporting: Panama is on the Russian Finance Ministry's list of offshore zones (Order 86n of 5 June 2023), so a Russian company cannot apply the zero rate to dividends from Panama (Article 284(3) of the Russian Tax Code), and a Panama company has to be reported under the CFC (controlled foreign company) rules.

Which structure to choose: S.A., S.R.L. or private foundation

The S.A., a sociedad anónima, or corporation, is the near-universal choice. From January to May 2024 the Public Registry recorded 7,697 new corporations and general partnerships, and 7,416 of them, or 96%, were S.A.s, according to INEC (Instituto Nacional de Estadística y Censo, the national statistics and census institute). The other structures serve specific purposes.

The S.A. is the default. The law sets no minimum capital, but the registration fee depends on the stated capital, so $10,000 is usually stated. One drawback for US tax residents: the rules of the IRS, the US tax service (section 301.7701-2), always treat a Panamanian S.A. as a corporation with no option to elect transparency. The S.R.L. has no such restriction.

The S.R.L. is for partnerships. Under the 2009 text of Law 4, income tax on an S.R.L. is paid by the members in proportion to their stakes (Article 28). Primary sources do not show clearly how the rule is applied today, so Murblz specialists check the S.R.L. tax model before registering.

A foundation is not for trading. Article 3 of Law 25 prohibits a foundation from pursuing profit: it may engage in commerce only occasionally. It may, however, own shares, hence the common pairing of a foundation holding an S.A. that runs the business. The annual fee for a foundation is $400. When you need a private foundation in Panama and when a trust fits better is covered in our article trust or foundation.

Nominee directors are legal; anonymity is not. The law does not prohibit nominee services outright, but the agent always identifies the real owner and records them in the beneficial ownership register. If the company or the beneficial owner deceives the agent, they bear the liability themselves (Article 25 of Law 129 of 2020).

Bearer shares are on their way out. Under Law 47 of 2013 (amended in 2015) their certificates must be held by an authorised custodian, and dividends on them are taxed at 20%. On 24 March 2026 the Cabinet, by Resolution 18, authorised the Ministry of Economy and Finance to submit a bill to the National Assembly abolishing them altogether. There is no point building a structure on them in 2026.

How to register a company in Panama: steps and timelines

The official registration time is one to two weeks, according to the government portal Panamá Digital. That covers the entry in the register. Two other stages usually take longer: the document checks before registration and the bank account afterwards.

Everything goes through a registered agent (agente residente): by law only a licensed Panamanian lawyer can act as one, and Murblz specialists perform this function together with locally licensed partners. A company cannot be registered without one, and if it goes more than 90 days without one, its rights are suspended. Under Law 2 of 2011 the agent runs KYC (know your customer) checks, and is itself supervised by the SSNF (Superintendencia de Sujetos No Financieros), the body that oversees lawyers, agents and other non-financial businesses for anti-money-laundering purposes.

You do not have to travel to Panama to register. The law allows non-resident founders, and the process runs remotely, with the finished, apostilled documents sent by courier. An in-person visit is usually needed later, at the bank.

Does an offshore company need an Aviso de Operación? Not if it does not operate inside the country: Article 694 of the Tax Code expressly refers to companies that do not require one. And such a company's dividends paid out of foreign income are not Panamanian-source and are not taxed.

How much does it cost to open and run a company in Panama

The state charges a Panama S.A. $300 a year. Everything else in the budget is the registered agent's fees, accounting and the bank, and those items decide the final figure.

Company registration with Murblz on the basic package starts from $5,000; we quote the exact cost with nominee services and a bank account after reviewing your documents. Accounting and banking come on top.

What happens if you stop paying

A company's rights are suspended in three cases: the Tasa Única is unpaid for three consecutive periods, the company has had no registered agent for more than 90 calendar days, or fines imposed on it are unpaid (Article 318-A of the Tax Code, as amended by Law 52 of 2016 and Law 254 of 2021). If a suspended company is not reinstated within two years, the Public Registry cancels it and it is deemed dissolved. Suspension for unpaid Tasa Única is ordered by the DGI (Dirección General de Ingresos, the tax authority).

This is not a theoretical risk. On 27 February 2026 the MEF (Ministry of Economy and Finance) began dissolving 290,534 entities that the DGI had already flagged in 2016 with a marginal de disolución (a dissolution annotation) for years of unpaid Tasa Única, starting with a first batch of 180,883 companies. A second stage will cover entities with suspended status in the Public Registry, including those suspended for breaching the accounting rules.

Accounting: the myth of zero reporting is dead

Law 52 of 2016, as amended by Law 254 of 2021, requires every company without operations in Panama, and every pure holding company, to keep accounting records and supporting documents for 5 years. They can be kept in any country, but a copy of the previous year's records must reach the registered agent by 30 April. Fines range from $5,000 to $1,000,000, plus suspension of the company's rights. Companies listed on a recognised stock exchange, companies owned by a state or an international organisation, and owners of vessels registered under the Panamanian flag solely for international service are exempt from sending the copy. Companies operating inside Panama keep books under the general rules of the Commercial Code and file tax returns.

Under Decree 177 of 30 December 2024, a company with no operations in Panama that only holds assets gives the agent a sworn statement each year, and the agent files an accounting records declaration with the DGI. From the 2027 financial year, Law 526 adds a tax return for companies whose only income is foreign passive income; its exact scope is still read differently. Our team handles accounting and reporting in Panama, including the annual delivery to the agent.

Panama corporate tax: what a company actually pays

Panama's corporate tax rate is 25%, but only on Panamanian-source income. What matters is where the money is earned, not where the company is registered or where its account sits.

Article 694 of the Tax Code expressly lists what is not Panamanian income:

• resale of goods that physically move only outside Panama, even if the invoice is issued from an office in Panama;
• directing, from a Panamanian office, transactions that are concluded, performed or take effect abroad;
• dividends paid out of foreign income by companies that have no Aviso de Operación or no taxable income in Panama.

The reverse boundary is written down too: if a foreigner provides a service that benefits someone in Panama, the income is Panamanian, and the payer withholds an effective 12.5% (25% on half the amount).

Three worked examples

Worked example 1: consulting for foreign clients. An S.A. without an Aviso de Operación earns $200,000 from clients in the US and Asia for services performed outside Panama. Income tax in Panama is zero, and so is dividend tax when profits go to the owner. But if the owner's country of residence has controlled foreign company rules, the profit lands in the owner's personal tax base. The owner must declare the company and the income under the laws of their own country either way.

Worked example 2: a business inside Panama. A company with an Aviso de Operación earns $100,000 profit on the Panamanian market. Income tax at 25% is $25,000. When the remaining $75,000 is paid out as dividends, 10% is withheld, or $7,500. The total is $32,500, or 32.5% of profit, before municipal tax and ITBMS, Panama's equivalent of VAT.

Worked example 3: a holding company in an international group. A Panama company owns a subsidiary in Mexico and receives $500,000 in dividends from it. In 2026 that income is foreign and untaxed. From 2027, under Law 526, if the holding company has no paid resident director and no premises in Panama, tax will be 15% of net income: with zero expenses that is $75,000.

Law 526: economic substance from 2027

Law 526 of 28 May 2026 is the biggest tax change for Panamanian holding companies in years. It answers the EU's complaint: exempting foreign passive income without any requirement for real activity.

• Who it covers: entities in a multinational group, meaning two or more entities linked by ownership or control and tax resident in different countries.
• Which income: dividends, interest, royalties, capital gains, real estate income and other income from capital.
• What is required: under Executive Decree 32 of 2 September 2026, at least one paid, qualified employee or contractor, premises, two board meetings a year held in person in Panama, and operating costs in proportion to the activity; records are kept at the company's Panamanian address for 5 years and produced in Spanish when the authorities ask. Holding companies face a lighter test: a paid director, officer or manager who is a Panamanian national or resident, plus premises, which may be shared space, and no in-person board meetings.
• Who is excluded: maritime shipping, licensed banks and insurers, securities intermediaries and fund managers.

The most contested point is the threshold. One reading is that there is none: a Panama company with a single foreign subsidiary already forms a group. Whether two companies owned by the same individual form a group does not follow clearly from the text, so Murblz specialists review such structures before the end of 2026.

The remaining rules are shorter. Transfer pricing applies to all transactions with related parties abroad; Form 930 is due within 6 months of year-end, and failing to file costs 1% of the transactions, capped at $1 million. Panama has no controlled foreign company rules of its own and no thin capitalisation rules (limits on interest on related-party loans). Double tax treaties are in force with 17 countries, and Russia is not one of them. For a broader view of tax systems, see our overview of taxes by country.

Is Panama an offshore jurisdiction? The EU blacklist, FATF and data exchange

On paper, Panama is an ordinary territorial tax system with an investment-grade rating. But the EU and the Russian Finance Ministry treat it as offshore, and that matters more than the paperwork if you have European clients or are a Russian tax resident.

What the blacklist means in practice. Since 2021 every EU member state has applied at least one of four measures to Annex I jurisdictions: denying expense deductions, controlled foreign company rules, higher withholding tax, or limiting the dividend exemption. Which measure bites depends on the client's country. Payments to listed jurisdictions also fall under DAC6, the EU directive that requires intermediaries and companies to report cross-border tax arrangements. For a European client, paying a Panama company's invoice means extra reporting, and it is best to agree on that up front.

Why Panama is listed. The EU regards its foreign income exemption as harmful and is waiting for a new Global Forum assessment. Law 526 was passed to get Panama off the list, on 30 April 2026 Panama asked the Global Forum for a new review, and the next revision of the EU list is scheduled for October 2026.

In response, President José Raúl Mulino barred EU companies from public procurement on the same day, except companies from Italy, Greece and Spain. The ban does not apply to the Panama Canal, which is an autonomous state entity.

The Panama Papers. The 2016 leak of 11.5 million documents from the law firm Mossack Fonseca made the word Panama a byword for offshore. On 28 June 2024 Judge Baloisa Marquínez acquitted all 28 defendants because of breaches in the handling of evidence. But bank compliance departments have longer memories than courts.

Data exchange. Panamanian banks collect CRS account data for 91 jurisdictions, and Russia is on that list (Decree 21 of 27 May 2026, covering 2025 reporting). Russia's Federal Tax Service, for its part, added Panama to its automatic exchange list back in 2019 and kept it there in the 2025 version. Public sources do not show whether data actually flows between the two countries, but for a tax resident it changes nothing: the duty to notify your tax office about the company and to declare foreign accounts and income under the laws of your country of tax residence applies either way. How tax residency is determined is covered in our article on the 183-day rule.

How to open a bank account for a Panama company

The account is the bottleneck of the whole set-up. The company is registered in one to two weeks, but a bank checks a client for as long as it sees fit and is entitled to refuse.

Typical bank requirements: an in-person meeting, reference letters, proof of source of funds and a CRS tax self-certification (a declaration of your country of tax residence). Many banks ask foreigners for Panamanian immigration status, a carnet or residence card. The regulator, the Superintendencia de Bancos, publishes its own client due diligence guidance.

A word on Russian citizens. They can enter Panama visa-free for 90 days in any 180, so getting to the bank is easy. But Panamanian banks have no public policy on Russian or Belarusian citizens: each bank's compliance team decides. The clearer the source of funds and the more transparent the structure, the easier the conversation.

If a Panamanian bank does not work out, the company's account can be opened in another country: see the options in our business accounts section. For a Panama company we arrange a corporate account in Panama, and for private money a personal account in Panama.

Special regimes: SEM, EMMA and free zones

For large businesses Panama offers regimes with a 5% rate instead of 25%. They almost never fit a small holding or consulting company: some are designed for international groups, the others for real operations inside a zone.

The scale says it all: according to MICI (Ministerio de Comercio e Industrias, the Ministry of Commerce and Industry), SEM companies provided 8,359 direct jobs in 2024 and about 10,000 over the regime's history. This is a tool for multinationals, not for an entrepreneur with a laptop.

Can a Panama company get you residency

Registering a company does not by itself give you a residence permit. But a company or foundation can legally take part in almost every investment programme, and one programme is built directly on owning a business. Decisions are made by the SNM (Servicio Nacional de Migración, the National Immigration Service).

The main trap for Russian citizens and their neighbours. The most affordable route, Países Amigos with its $200,000 threshold, is open only to citizens of listed countries. Russia, Ukraine, Belarus and Kazakhstan are not named on it, but we could not find the official list in the public domain, so the applicant's nationality should be checked before buying property. For these passports the realistic options are the qualified investor route from $300,000, the retiree visa and the macro-enterprise investor route. All programmes and thresholds are on our page on Panama residence by investment, and property selection is covered under property in Panama.

The retiree visa and your company. Pensionado requires a lifetime pension from a foreign government, an international organisation or a private company, backed by a document from the payer; spouses may combine their pensions to reach $1,000. A company does not help here: even the reduced $750 threshold requires property bought in the applicant's own name. Remote professionals should look at the Panama digital nomad visa.

Naturalisation. Under Article 10 of the Constitution, Panamanian citizenship is granted after 5 consecutive years of residence, in practice counted from permanent residence. Applicants need Spanish, knowledge of the country's history and geography, and an express renunciation of their previous citizenship. With a Panamanian spouse or a child born in Panama, the period drops to 3 years; on giving birth in the country, see childbirth in Panama. That makes Panama more useful as a residency country than as a route to a second passport.

Panama vs BVI, US LLC, UAE, Paraguay and Hong Kong

Panama beats classic offshore centres on dollar banking and simple annual payments, but loses to the UAE and Paraguay on reputation in the eyes of the EU and the Russian Finance Ministry. Here are the key parameters:

Annual state fees: Panama $300; the BVI $550 for up to 50,000 authorised shares and $1,350 above that; in the US, Wyoming from $60 and Delaware $300 for an LLC. More on US taxation on our page on taxes in the USA.

More on the alternatives: UAE residency, taxes and life, doing business in Paraguay in 2026, a business account in Hong Kong and our overview of where to open a company in 2026.

Pitfalls of a Panama company

1. European clients. While Panama is blacklisted, a payment from the EU can cost the client a denied deduction, withholding tax or a DAC6 report. Check each major client's country before you register.
2. There is no zero reporting. The fine for breaking the accounting rules starts at $5,000, more than 16 years of Tasa Única.
3. There is no anonymity. The beneficial owner is recorded in the RUBF register, and the bank reports account data under CRS to 91 jurisdictions. A plan in which your tax office never learns about the company is pointless and illegal.
4. Law 526 can catch a small structure. One foreign subsidiary and no substance in Panama are enough for passive income to face 15% tax from 2027.
5. Home-country taxes do not go away. CFC rules and account reporting apply regardless of Panamanian rates, and Panama has no double tax treaty with Russia.
6. An Aviso de Operación changes your tax status. With one, the company pays dividend tax, including 5% on dividends from foreign income.
7. The retiree visa does not work through a company. Property held by a Panama S.A. does not lower the pension requirement, though it does qualify for the investor programmes.

Our services in Panama

We run the project end to end: from choosing the structure and registering it to the bank account, accounting and residency. Legal representation and registered agent functions are handled by Murblz specialists together with partners holding a Panamanian law licence.

If Panama does not fit your purpose, compare it with other countries in our company registration section. Our guide to the capital is on the Panama City page.

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