Country in Central America between the Caribbean Sea and Pacific Ocean, bordered by Costa Rica and Colombia.



Official language



Balboa (PAB), U.S. Dollar (USD)

1PAB = 1 USD

Political Structure

Presidential republic. The president is the Head of government. The Cabinet of Ministers is appointed by the president. The president and vice presidents are elected by popular vote every 5 years. There is a unicameral National Assembly, its members are elected every 5 years by the general voting.


Offshore companies, banking, insurance, registration of ships under the flag of the country, and tourism play an important role in the economy of Panama These industries account for approximately 70% of Panama GDP, about two-thirds of the working population are engaged in these activities. Offshore activity in Panama is very diverse, since Panama was the first country that in 1927 enacted legislation on offshore companies.

Legal system

Based on the Civil Code.

Corporate law

  • Corporation Law 32, 1927
  • Decree Law 5, 1997
  • Trust Law No 1, 1984
  • Private Foundation Law, 1995
  • Types of companies
  • Corporation 
  • Foreign Corporation
  • General Partnership
  • Limited Partnership
  • Foundation
  • Trust

Corporation (Corporation)

  • There are no requirements for the payment of minimum capital. The only exception: no par value shares and bearer shares must be paid up at the time of issue.
  • The minimum number of directors is three, directors may be natural and legal persons, citizens of any country. The company should also appoint three officers (president, secretary and treasurer) who may also be directors.
  • Minimum one shareholder is required.
  • Financial report is not required if the income was received outside the territory of Panama.
  • Disclosure of information to the authorities of the beneficiary is not required.
  • Companies are not allowed to engage in banking, finance, trust and insurance activities.
  • Shares can be of various kinds: with and without par value, ordinary bearer shares. At the moment, strict rules are applicable for bearer shares: the registration agent shall keep the certificate of bearer shares in a secure location and shall notify the Registrar of such actions.


  • Unlike Trust, which is created under the common law, Foundation is a separate legal entity without members or shareholders. It is mainly used to protect assets, and can not engage in any commercial activity.
  • Founder creates Foundation by filing the Charter in the Registrar, specifying the name of the Foundation, the Board of Foundation, assets of Foundation, its domicile, the name of the Panamanian registered agent and other information.
  • The names of beneficiaries and principles of Foundation may be listed in a special document Regulations, which need not be submitted to the authorities.
  • A minimum capital of USD 10,000 is required for establishment.
  • There is no requirement for filing accounts and audit. Tax is levied only on income derived from Panamanian sources.
  • Foundation pays capital tax (minimum USD 60) and an annual fee for registration of USD 300, as well as Corporation.
  • Panamanian law does not apply foreign law or court decisions in respect of the Foundation's assets.


  • Trust is irrevocable, unless otherwise provided.
  • Settlor, Trustee and Beneficiaries are not required to be residents of Panama.
  • A Panamanian lawyer shall be appointed as an agent of Trust. 
  • Trust can be created in respect of existing or future property.
  • After the establishment of Trust its Settlor or a third party can add assets to the Trust.
  • There are no requirements for minimum capital and other fees; documents of the Trust may be in English or Spanish.
  • Unlike Foundation, Trusts are not protected by specific provisions against foreign inheritance laws, court decisions or creditors.
  • Trust may created as a purpose Trust.
  • If Trust receives income from a source in Panama, a tax is imposed directly on the Trust, rather than on Trustee.


Income from sources outside Panama is not subject to tax.

Agreements on avoidance of double taxation

As Panama does not levy taxes on income derived from foreign sources, until recently, Panama had no signed treaties on avoidance of double taxation. However, the renewed pressure from G20 and OECD, that put Panama in 2009 in the "gray list" was the reason that Panama began negotiations with various countries on signing of agreements. At the moment, 12 agreements (required minimum) are signed with such countries as the Netherlands, Japan, Singapore, France, USA, Israel and some others.