Panama Company Formation
For Latin American Family Offices and Cross-Border Structuring
The Panama Sociedad Anónima (SA) is the workhorse vehicle for Latin American families structuring wealth across borders. Governed by Law 32 of 1927 — one of the world's first modern corporate statutes — and operating in US Dollars since 1904, the Panama SA offers civil-law familiarity, territorial taxation, and nearly a century of commercial precedent.
Timeline
5–7 business days
Formation Fee
$1,800
Annual Renewal
$1,500
Legal System
Civil Law (Spanish-Roman)
Why Panama Is the Default for Latin American Wealth Structures
Civil-Law Jurisdiction
Panamanian law is based on the Spanish-Roman civil tradition — the same legal family as Mexican, Colombian, Argentinian, and most continental European law. Concepts, vocabulary, and notarial practice are familiar to local advisors across Latin America.
US Dollar Currency
Panama adopted the USD in 1904. For families with USD-denominated investments, Panama removes FX friction entirely. No currency risk, no conversion costs, no capital controls between the company and its banking relationships.
Territorial Taxation
Only income generated within Panamanian territory is taxed. Foreign-source income, capital gains on foreign assets, and dividends from foreign subsidiaries are not subject to Panamanian tax at the entity level.
Full International Compliance
The FATF removed Panama from the grey list in October 2023. CRS, FATCA, the RUBF beneficial ownership registry (Law 129 of 2020), and economic substance requirements are all fully implemented.
Who Uses a Panama SA?
Mexican Families with Multi-Country Assets
Operating businesses in Mexico + investment portfolios in the US + real estate elsewhere. A Panama SA holds the non-Mexican assets under a familiar civil-law framework with USD stability.
Colombian Families
Colombia's wealth tax regime taxes worldwide assets. A Panama SA is a recognized vehicle widely used by Colombian HNW for international holdings, with full treaty compatibility and civil-law alignment.
Argentinian Families
Argentina's capital controls and FX volatility make USD-denominated offshore holdings critical. A Panama SA provides USD operational continuity outside the peso system.
Central American Operating Families
Owners of operating businesses in Guatemala, Costa Rica, El Salvador, Honduras, Nicaragua frequently use a Panama SA as the top holding for regional operations.
Panama SA Structural Features
Flexible Share Classes
Different classes with custom voting and economic rights. No minimum capital requirement. Shares can be common, preferred, or customized to any family governance need.
Three Directors
A Panama SA requires a minimum of three directors. They can be nominee directors. No residency requirement for directors — they can be of any nationality and reside anywhere.
Immobilized Shares
Bearer shares were replaced by custodian-held immobilized shares in 2015, in line with international transparency standards. Ownership is recorded with the registered agent.
Nearly a Century of Precedent
Law 32 of 1927 — one of the world's first modern offshore corporate statutes. Nearly 100 years of refinement, judicial interpretation, and international acceptance.
Panama Post-2020: A Fully Compliant Jurisdiction
Following the Panama Papers revelations in 2016, Panama undertook one of the most comprehensive reform cycles of any offshore jurisdiction. Bearer shares were immobilized, CRS and FATCA were implemented, and supervision of registered agents was significantly strengthened.
Law 129 of 2020 created the RUBF (Registro Único de Beneficiarios Finales) — a centralized beneficial ownership registry accessible to Panamanian authorities and to foreign tax authorities under information-exchange agreements. All legal entities must report their ultimate beneficial owners within prescribed timeframes.
In October 2023, the FATF officially removed Panama from its grey list, recognizing the completion of the reform agenda. Panama in 2026 is a fully compliant, internationally accepted jurisdiction — materially different from its pre-2016 reputation.
For Latin American families, this means a Panama SA is accepted by international banks, counterparties, and tax authorities without the friction that historically attended Panamanian structures.
Documents and KYC Requirements
For each director, shareholder, and ultimate beneficial owner:
- Certified passport (notarized or apostilled)
- Proof of residential address within 3 months
- KYC/AML questionnaire in English or Spanish
- Source of funds and source of wealth declaration
- Bank reference or professional reference
Corporate entities: Pacto Social/M&AA, Certificate of Good Standing, register of directors, and KYC on all UBOs.
How Your Panama Incorporation Works
Choose Panama. We run a name check with the Public Registry.
Complete KYC online. Compliance review 24–48 hours.
Payment authorized but not captured until KYC clears.
Drafting of Pacto Social by our Panamanian counsel.
Registration with the Public Registry. 3–5 days.
Documents delivered to your secure dashboard. Originals couriered worldwide.
Banking introductions to Panamanian and international banks.
Ongoing administration — annual renewals, BO register updates, Resident Agent.
Panama vs Other Jurisdictions
Panama vs Bahamas
Panama is civil-law; Bahamas is common-law with civil-law tools (usufruct, demerger). Choose Panama for civil-law familiarity and Spanish-language service. Choose Bahamas for common-law certainty with usufruct mechanisms.
Explore Bahamas incorporationPanama vs BVI
BVI is the corporate workhorse — common-law, globally recognized. Panama is the Latin American civil-law hub. For operating holding without succession complexity, BVI is simpler. For LatAm families wanting legal familiarity, Panama wins.
Explore BVI incorporationPanama vs Nevis
Nevis is a cost-effective common-law IBC for international operators and asset protection. Different use case from Panama's civil-law SA for Latin American holding structures.
Explore Nevis incorporationInternational Compliance: CRS, FATCA, RUBF
A Panama SA is fully compliant with the Common Reporting Standard (CRS), FATCA, the RUBF beneficial ownership registry (Law 129 of 2020), and economic substance requirements where applicable.
Financial accounts held by a Panama SA are reported by the financial institution to the Dirección General de Ingresos (DGI), which automatically exchanges information with the tax authority of each beneficial owner's country of residence under CRS.
All Panama SAs must report ultimate beneficial owners to their Resident Agent, who maintains the data in the RUBF system. The information is accessible to Panamanian authorities and to foreign tax authorities under bilateral or multilateral information-exchange agreements.
The FATF removed Panama from the grey list in October 2023. Panama is not on the OECD or FATF blacklists. Home-country tax obligations remain in place — we strongly recommend a local tax advisor in your home country before forming.
Annual Maintenance
- Annual government franchise tax
- Resident Agent (Panama-licensed attorney, legally required)
- Registered office in Panama
- BO register updates (within 15 days of changes)
- Economic substance declaration (if applicable)
Our managed renewal service at $1,500/year covers all of the above. You receive reminders 60 days in advance, we file on your behalf, and your company stays in good standing automatically.
Frequently Asked Questions About Panama Incorporation
Why do Latin American families prefer Panama over BVI or Cayman?
Panama is a civil-law jurisdiction, the same legal family as Mexican, Colombian, Argentinian, Spanish, and most continental European law — concepts and vocabulary are familiar to local advisors. The US Dollar has been Panama's functional currency since 1904, eliminating FX friction for USD-denominated portfolios.
Is Panama still considered credible after the 2016 Panama Papers and the FATF grey list?
Yes. Panama completed an extensive reform cycle between 2016 and 2023 — immobilization of bearer shares, CRS implementation, FATCA, the RUBF beneficial ownership registry under Law 129 of 2020, economic substance, and strengthened supervision. The FATF removed Panama from the grey list in October 2023.
Will my beneficial ownership be public?
No. Beneficial ownership is reported to the registered agent and to the RUBF (Registro Único de Beneficiarios Finales). It is accessible to Panamanian authorities and foreign tax authorities under information-exchange agreements, but not publicly searchable.
How long does the structure take to be operational with banking?
Formation: 5–7 days. Banking introductions and account opening: typically 4–8 weeks in Panama, 6–12 weeks for major international private banks. Most clients are fully operational within 8–12 weeks from KYC submission.
Can I work in Spanish with Incorcorp?
Yes. Our team works natively in Spanish, English, and Portuguese. All documentation can be provided in Spanish; we coordinate directly with your local counsel in their language.
What happens if I no longer need the company?
A Panama SA can be voluntarily liquidated (recommended for entities with assets) or struck off (low-cost, simple). We handle dissolution end-to-end.