Panama Company Formation

Panama is an offshore hub and has long held a reputation as one of the most attractive offshore jurisdictions worldwide. Its flexible corporate framework, territorial taxation, and strong privacy protections make it a preferred choice for entrepreneurs, investors, and professionals seeking international structures. In this article, we’ll walk you through everything you need to know about Panama company formation, from advantages and requirements to the incorporation process and ongoing compliance.

Why Form a Panama Offshore Company? Key Advantages

There  are various advantages of Panama company formation that continue to draw global attention:

• Foreign Income Stays Untaxed: Panama uses a territorial tax system, so as long as your business income is earned outside of Panama, you won’t pay corporate tax on it. For businesses dealing with international clients, that’s a major win.
• Discreet Ownership Structure: The identities of shareholders aren’t published in a public registry of Panama, which keeps things private. And if you’d prefer to stay even more behind the scenes, using nominee directors or shareholders is an option.
• No Minimum Capital, No Heavy Reporting: You’re not required to put in a minimum amount of capital to get started. Plus, if your company operates offshore, there’s no need to file financial statements or go through audits.
• Separate Business from Personal Assets: A Panamanian company gives you a legal buffer between your personal finances and your business. That layer of protection can be particularly useful if legal issues ever arise.
• Trusted Location for International Business: With a dollar-based economy and a solid financial reputation, Panama is seen as a stable and strategic gateway, especially for trade and operations throughout the Americas.
• Strategic location: Panama is a country located in Central America, with access to markets in North and South America, and around the world due to its credibility. The capital, Panama City, is a hub of trade and business, has the Panama Canal, making it suited to global trade, is an offshore financial center, and a popular choice for company formation services. 

Who is a Panama Company Best For? (Top Use Cases)

An offshore company in Panama is ideal for:

• Entrepreneurs running international businesses who want to minimize taxation on foreign earnings.
• Consultants and service providers serving clients globally who require an efficient legal structure.
• Investors holding real estate, intellectual property, or securities who need a protective structure.
• Companies seeking financial licenses (such as brokerage or fintech) under a flexible framework.
• Families and individuals focused on asset protection and succession planning.

Understanding the Panama Corporation (Sociedad Anónima)

The most common corporate form in Panama is the Sociedad Anónima (S.A.), a structure similar to corporations in other jurisdictions. This company type offers flexibility, simplicity, and robust confidentiality features.

Key Features at a Glance

Feature	Detail
Company Type	Sociedad Anónima (S.A.)
Governing Law	Law 32 of 1927
Directors	Minimum three directors (nominees permitted)
Shareholders	Minimum one (corporate or individual)
Share Capital	No minimum paid-in share capital required

Privacy of a Panama Company

Shareholder names are not disclosed in the public registry. Beneficial owners remain private, and nominee directors may be appointed to further enhance confidentiality. For clients who value discretion, this is one of Panama’s strongest features.

Directors and Shareholders Requirements

To set up a corporation in Panama, you’ll need to appoint at least three directors—but they don’t have to live in Panama. One person can wear multiple hats, meaning they can be both a director and a shareholder if needed. As for shares, they can be issued with or without a set value, depending on what suits the company. Bearer shares, however, are no longer allowed under current law, which keeps everything in line with global transparency standards.

Our Panama Company Formation Packages

Offshore Pro Group offers flexible packages tailored to different business needs — from a quick incorporation to full-service solutions with banking and professional management. Here are the options:

Remember: We now offer both free and paid consultations. You can book a complimentary 15-minute call to discuss your options, or choose a full one-hour consultation (€300, discounted from €500) with an expert for tailored advice on Panama company formation and offshore services.

Formation Timescale: How Long Does It Take?

The incorporation process is relatively fast. A company in Panama can be registered within 5–10 business days, depending on document submission and due diligence requirements. Obtaining banking facilities or financial licenses may take longer, depending on the provider.

The Panama Company Registration Process: Step-by-Step

Forming a company in Panama follows a clear, structured process:

Step 1: Due Diligence and Document Collection (KYC)

Required documents typically include:

• Certified passport copy
• Certified proof of address (utility bill, bank statement, dated within 3 months)
• Bank or professional reference letter

Step 2: Company Name Check and Reservation

The registrar of companies verifies that the chosen name is unique and available.

Step 3: Preparation and Filing of the Articles of Incorporation

The articles of incorporation outline the structure, directors, shareholders, and share capital. These are filed with the public registry.

Step 4: Issuance of Corporate Documents

After approval, the company receives its certificate of incorporation, articles of incorporation, and share certificates.

Step 5: Post-Formation (Bank Account, etc.)

Once incorporated, Offshore Pro can assist with account opening at local or international banks, corporate documents (including a certificate of incumbency), and nominee services if required.

Opening a Bank Account for Your Panama Company as a Non-Resident

Getting your company set up in Panama is one thing — but actually opening a business bank account? That’s a whole other story, especially if you’re not living in the country. Banks have gotten pickier, and for non-residents, the process can feel slow, frustrating, and full of random requirements.

It’s not impossible, but it’s rarely straightforward. That’s why working with someone who knows the local scene makes a huge difference. Offshore Pro Group has built strong relationships with banks and some solid fintech options, too — they know how to cut through the usual delays and help you get an account opened without wasting weeks going in circles.

Ongoing Compliance and Maintenance

Even though Panama offers light-touch regulations, some annual obligations must be met:

Annual Franchise Tax

A flat annual franchise tax of USD 300 per year applies to all companies in Panama, payable regardless of business activity.

Registered Agent Renewal

Every company must maintain a registered agent and registered office within Panama. Offshore Pro ensures timely renewal.

Accounting Records & Data Protection

Companies must maintain accounting records, but these do not need to be filed with the public registry unless requested. Financial statements are kept internally and may be required for bank account compliance.

Economic Substance Requirements

While Panama does not impose economic substance rules on companies conducting only foreign-sourced business activities, maintaining minimal corporate records is advised.

Why Choose Offshore Pro Group for Incorporating Your Panama Company?

Offshore Pro Group has over a decade of experience helping international clients set up and maintain companies in Panama. From due diligence and company incorporation to ongoing services such as nominee directors, share certificate issuance, and annual renewals, we provide a seamless process.

We also guide you through complex steps such as bank account opening, obtaining a certificate of incumbency, and ensuring compliance with both local and international standards.

If you’re looking for a place to start or grow an offshore business, Panama still makes a lot of sense. Between the zero tax on foreign income, strong privacy rules, and the fact that you don’t have to jump through endless hoops to stay compliant, it’s easy to see why so many entrepreneurs keep choosing it.

Frequently Asked Questions