H&CO
Panamá

Can a foreigner own 100% of a company in Panama?  

Yes, Panama allows 100% foreign ownership and control across almost all business sectors. Foreign nationals do not need a local partner, citizen shareholder, or a resident director to incorporate.

The Exception: Retail commerce (comercio al por menor) and certain regulated professions (such as law, medicine, and engineering) are constitutionally reserved strictly for Panamanian citizens.

Do I need to reside in Panama or travel there to open a business?  

No, you can complete the entire incorporation process remotely from anywhere in the world. Your local attorney (acting as your mandatory Registered Agent) can file the Articles of Incorporation at the Public Registry via a Power of Attorney (Poder). You only need to provide passport copies and standard Know Your Customer (KYC) documentation.  

What is the minimum capital requirement to start a company?  

There is not legally mandated minimum paid-in capital required to establish a standard corporation (Sociedad Anónima). The standard corporate structure uses a standard authorized capital of USD 10,000 split into shares, but this money does not need to be deposited into a bank or proven at the time of incorporation. It is simply a declared value.

How long does it take to fully incorporate and operate?  

The process is relatively fast but varies by step:

• Company Registration: Getting the entity registered in the Public Registry takes 1 to 3 business days once documentation is submitted.
• Operational Setup: Getting your Tax ID (RUC) and your Notice of Operations (Aviso de Operaciones) takes another 2 to 3 days.
• The Bottleneck: Opening a corporate bank account is the longest phase, typically taking 2 to 6 weeks due to strict international compliance and anti-money laundering (AML) checks.

What are the mandatory ongoing corporate maintenance costs?

To keep a Panamanian corporation in good legal standing, you must cover three fixed annual costs regardless of whether the business is actively trading:

• Annual Corporate Franchise Tax (Tasa Única): USD 300 per year.
• Resident Agent Fee: Paid to your local lawyer/firm to remain your legal representative (usually ranges from USD 250 to USD 450/year).
• Registered Address/Accounting Compliance: Costs for keeping mandatory accounting records and an official address in the country.

How does Panama’s territorial tax system work for offshore business? 

Panama taxes corporate income based strictly on geography, not on source or nationality.

• Foreign-Source Income: If your Panamanian company invoices clients abroad and operations take place outside Panama, corporate income tax, dividend tax, and capital gains tax are 100% exempt.
• Local-Source Income: If your company sells goods or services inside the Panamanian market, it is subject to a flat 25% corporate income tax rate and a standard 7% VAT (ITBMS).

Does setting up a business grant me residency in Panama? 

Yes, it can. Registering a company is a foundational pathway to legal residency, primarily through two popular visa programs:

• The Friendly Nations Visa: Relies on demonstrating professional or economic ties, which is most easily achieved by setting up a corporation and appointing yourself as an executive or employee.
• The Qualified Investor Visa: Offers expedited permanent residency but requires a higher direct investment (starting at USD 300,000 in real estate or securities, or fixed-term deposits).