Quick answer — Panama corporation at a glance. A Panama Sociedad Anónima (SA) is formed through a Panamanian lawyer acting as resident agent, usually within days, with no minimum paid-in capital and at least three directors. Panama taxes only Panama-source income, at 25% for companies, so profits from operations outside Panama are generally exempt. Beneficial owners are recorded through the resident agent, banks apply strict due diligence, and an annual franchise tax applies.
Panama has been one of the world's best-known company jurisdictions for decades. Its territorial tax system, US dollar economy, strategic location and long tradition of corporate services make the Panama SA a familiar vehicle for international business.
For location-independent founders, Panama offers two things: a company that pays no Panamanian tax on foreign-source profits, and residency routes such as the Friendly Nations visa that make it possible to live there. The company and the residency work best together. A Panama SA owned by a founder who lives in a high-tax country, with no activity in Panama, offers little protection: the founder's country can tax its profits through CFC or management rules, and banks will ask hard questions.
It does not suit founders who stay resident in high-tax countries with CFC rules, or who need simple, fast banking. It is not designed for locally employed expats or retirees.
Comparing Latin American options? See our guide to open a company in Latin America.
If you are comparing territorial options, see the Paraguayan EAS with territorial tax and Costa Rica SRL setup.
Panama exempts income from operations conducted outside Panama. Income from activities carried out in Panama is taxed. Panama has also introduced rules on certain passive foreign income received by entities in multinational groups. Most importantly, Panama's exemption does not stop your country of residence from taxing the company's profits through CFC or management rules.
The Friendly Nations visa offers residency to nationals of listed countries who meet economic ties requirements, such as a job offer or a real estate investment. Investor visas are also available. To be treated as resident for tax purposes and to break residency in your previous country, you generally need to live in Panama and keep evidence of your ties.
Amounts are indicative.
Panamanian banks are known for strict onboarding: expect requests for bank and professional references, a detailed business plan, proof of source of funds and sometimes an in-person visit.
The Panama Business Bank Comparison Guide compares the main banks for Panama companies — get it when you start your Panama setup with Heavnn.
No. Panama applies territorial taxation: only income from activities carried out in Panama is taxed. Your country of residence may still tax foreign-source profits.
Companies pay 25% on Panama-source taxable income.
At least three directors, who can be of any nationality and do not need to live in Panama.
Owning a company does not by itself give residency. Visas such as the Friendly Nations visa or investor visas provide residency for those who meet their conditions.
It can be. Panamanian banks apply strict due diligence and often require references, a business plan and proof of the source of funds.
Panama's territorial system pays off when your residency and your home country's rules line up. Heavnn checks both first.
Start your Panama setup with Heavnn →
This guide is general information, not tax or legal advice. Rates and fees are indicative as of October 2026.
