In recent years, Panama has stood out not only with the perception of being an “offshore paradise” but also with its modern legal infrastructure, regional trade role, and investor-friendly practices. As we approach 2026, entrepreneurs from both Europe and Turkey are seriously considering establishing companies in Panama for tax optimization, asset protection, and a flexible structure on a global scale.
In this guide, we will address the company formation process in Panama in 2026 in detail, covering everything from the legal framework to step-by-step processes, tax aspects, costs, and practical risks. We will also concretely demonstrate why managing this process professionally is critical and how Corpenza adds value in this regard.
Strategic Advantages of Company Formation in Panama
Panama stands out for several key reasons for international investors:
- Fast incorporation process: If the necessary documents are ready, company formation can typically be completed within 3–6 business days.
- Flexible corporate structure: There is no residency requirement for shareholders and directors in Panama. You can design management bodies and share structures flexibly according to your business model.
- Territorial tax system: Panama only taxes income generated within the country. Income sourced from abroad can remain outside the scope of Panama corporate tax under certain conditions.
- No minimum capital requirement: There is no obligation to deposit minimum capital when establishing a corporation or limited liability company in Panama.
- Balance of international compliance and confidentiality: While transitioning to a framework compliant with OECD and FATF standards, Panama offers a corporate law that protects legitimate trade secrets and confidentiality.
- Investor-friendly legal system: The corporate structure shaped by Law No. 32 of 1927 clearly defines the responsibilities of partners and includes modern provisions that provide investor protection.
These advantages make Panama attractive for entrepreneurs engaged in international trade, holding structures, asset protection, and global mobility planning in 2026.
Legal Framework Governing Companies in Panama
The establishment of companies in Panama is primarily regulated under Law No. 32 of 1927. This law details the types of companies, management bodies, share structures, and registration processes.
Important points for foreign investors:
- There is no residency requirement for foreigners to establish a company.
- Companies can benefit from a flexible legal infrastructure for activities conducted outside Panama.
- There is a requirement for legal representation and a registered agent; therefore, it is necessary to work with a local lawyer/corporate representative.
Types of Companies Preferable in Panama
1. Corporation (S.A. – Sociedad Anónima)
The most commonly preferred type of company for foreign investors in Panama is the corporation.
Notable features:
- Flexible share structure: A structure that allows bearer or registered shares (although there have been strict regulations and custody obligations for bearer shares in recent years, flexibility remains).
- Fast incorporation: Registration is possible within 3–6 business days with properly prepared documents.
- Structure: At least three directors are required: president, secretary, and treasurer.
- Ideal use cases: International trade, regional or global holding company, registration of ships or aircraft, holding intellectual property rights.
2. Limited Liability Company (S.R.L. – Sociedad de Responsabilidad Limitada)
A limited liability company has a structure divided into participation quotas rather than shares.
General characteristics:
- Suitable for SME structures with more than 2, usually a limited number of partners.
- The management structure can be simpler than that of a corporation.
- Preferred for local trade, small-scale operations, and service companies.
3. Foreign Company Branch (Branch)
Allows an existing foreign company to operate in Panama under the same legal entity.
- Offers the opportunity to create a regional presence without establishing a separate company in Panama for multinational structures.
- However, risks and liabilities arising from branch activities are directly attributable to the parent company.
4. General Partnership (Sociedad Colectiva)
Its establishment is simple and fast; however, due to the unlimited liability of partners, it is rarely the first choice for international investors.
- Requires at least two partners.
- All partners are personally and unlimitedly liable for the company’s debts.
5. Limited Partnership (Sociedad en Comandita)
A hybrid structure that combines the company and partnership model.
- General partners: Have management and representation authority, are unlimitedly liable.
- Limited partners: Only bear risk up to the amount of their capital contribution, may not have a say in management.
The most common scenario for international entrepreneurs is to proceed with a Sociedad Anónima or S.R.L. based on business volume.
Company Formation in Panama: Step-by-Step Process for 2026
Step 1: Pre-Incorporation (1–2 Days)
Choosing and Reserving a Company Name
The first step is to determine the company name. In practice, you need to pay attention to the following rules:
- Identify at least 3 alternative company names.
- The company name must end with a designation such as S.A., Corp, Inc, or Ltd.
- The chosen names must not conflict with similar or identical titles in the Panama Public Registry.
A local registered representative checks these names in the system and reserves the appropriate name on your behalf.
KYC Documents and Due Diligence
The resident agent in Panama conducts a customer due diligence review according to international AML/KYC standards. Typically, the following documents are prepared at this stage:
- Passport copy for each individual partner and director
- Address verification (utility bill, bank statement, etc.)
- Banking or professional reference letters if necessary
Documents usually need to be submitted as notarized or apostilled. Documents in English or other languages must be translated into Spanish by an official translator. This review conducted by the resident agent typically takes 1–2 business days.
Step 2: Company Incorporation (2–3 Days)
Preparation of Articles and Incorporation Documents
Company formation in Panama must be carried out through a local lawyer or resident agent. At this stage:
- The company’s trade name,
- Business purpose (often written generally and flexibly),
- Share structure or capital quotas,
- A board of directors consisting of at least three individuals (president, secretary, treasurer),
- Information about the founding partners
is clearly defined.
Public Notary and Public Deed
The prepared bylaws are submitted to a Panamanian public notary. The notary reviews the documents and creates a Public Deed, making it ready for registration.
While the notary process can technically be completed in a short time, it is safer to anticipate a period that can extend up to 2–3 weeks due to workload and document traffic.
Public Registry Registration
Once the Public Deed is ready, the documents are submitted to the Panama Public Registry, and the company is officially registered. At this stage:
- A registration number is assigned to the company.
- Incorporation certificates are issued.
This process can similarly take 2–3 weeks. However, with proper preparation of documents and pre-approval, the actual incorporation time can be reduced to the level of 3–6 business days.
Step 3: Taxes, Licenses, and Work Permits (2–3 Weeks)
Tax Identification Number (RUC) and Tasa Única
The company must register with the Panama General Directorate of Revenue (DGI) and obtain a Tax Identification Number (RUC). Without this number:
- You cannot declare official accounting records,
- You cannot file income tax returns,
- You cannot pay the mandatory annual fee known as Tasa Única.
Only income sourced from Panama is taxed; this provides a significant advantage for structures primarily engaged in offshore or international activities.
Ministry of Commerce Registration and Licenses
If you plan to conduct actual commercial activities within Panama (office, store, local services, etc.), you will need to go through the registration and licensing process with the relevant business sector at the Ministry of Commerce. This step typically includes:
- Clarifying the business purpose,
- Submitting local address and lease/facility agreements,
- Obtaining sector-specific permits if necessary
and may take approximately 2–3 weeks.
Ministry of Labor and Social Security Registration
If you plan to employ staff in Panama, you need to register your company with:
- The Ministry of Labor,
- The Social Security Fund
This process can take 20–30 days depending on workforce planning and payroll structuring.
Step 4: Opening a Bank Account
One of the most critical steps for the company’s operationalization is to open a corporate bank account in Panama or a compliant financial center.
Typically required are:
- Company incorporation documents and Public Registry registration outputs
- KYC documents for directors and partners
- Income source and fund origin explanations
- Business plan or contract samples if necessary
The Panamanian banking system operates quite meticulously due to international pressures and AML regulations. Therefore, progressing with an expert team on issues such as bank selection, account opening, minimum balance, and multi-currency account structuring significantly reduces the risk of errors.
Panama Tax System: Territorial Model and 2026 Perspective
The most significant attraction of Panama is its territorial tax system. Under this system:
- Only income generated in Panama is subject to corporate tax.
- Income from foreign sources, such as trade, consulting, services, and holding income, may remain outside the scope of Panama corporate tax under certain conditions.
The corporate tax rate in Panama is generally around 25%. However, if your company only conducts offshore activities, your actual tax burden can significantly decrease.
On the other hand, with pressures from the OECD and FATF, especially in “significant activities” such as finance, insurance, and IP management, economic substance requirements are increasingly coming to the forefront. In 2026 and beyond:
- Criteria such as having a local office, local manager, or employees may be required in certain sectors.
- Transparency obligations regarding beneficial owners may increase, along with international information sharing (CRS, etc.).
Therefore, to maximize tax advantages and minimize legal risks, it is critically important to design your Panama structure in an integrated manner with the tax regulations of Turkey, the EU, and other countries where you operate.
Cost Items for Company Formation in Panama
The net cost varies depending on the type of company you choose, the structure of the bank account, the use of nominee directors, accounting and payroll services, but typical items include:
- Incorporation and legal consultancy fees: Depending on the type and scope of the company, the total costs in the first year are generally around several thousand USD.
- Government fees: Official fees paid for incorporation and mandatory annual payments such as Tasa Única.
- Resident agent and registered office fees: An annual fixed expense arises due to the obligation to have a local registered representative and address in Panama.
- Bank account opening and maintenance fees: Some banks may require account opening fees and minimum balance requirements.
- Ongoing costs: Accounting, annual declarations, legal updates, payroll, and social security contributions if applicable.
Services that promise “cheap incorporation on paper” in Panama often exclude banking, tax optimization, international compliance, and long-term sustainability. Therefore, the total cost should be evaluated as a package of incorporation + banking + tax + compliance.
Who Should Prefer the Panama Company Structure?
Panama is a strong option, especially for the following profiles:
- Trade and logistics companies based in Europe looking to expand into Latin America,
- High-net-worth individuals and family offices seeking global holding and asset protection structures,
- Companies engaged in international service exports (IT, consulting, digital products, etc.),
- Investors looking for a suitable “holding location” for ships, aircraft, or intellectual property rights.
However, in every case, you must design your structure in Panama in conjunction with your tax obligations in Turkey, EU regulations, CRS, and CFC (Controlled Foreign Corporation) rules. Otherwise, while obtaining the expected tax advantages, you may face unwanted tax or compliance risks in other countries.
Professional Approach to Company Formation in Panama with Corpenza
While establishing a company in Panama may theoretically seem possible with a few documents and a few days, in practice, it requires solid answers to each of the following questions:
- How will your company in Panama be classified according to Turkish and EU tax law?
- Which countries will you trade with, and are there risks regarding transfer pricing, VAT, withholding, etc.?
- Do you know which institutions your company’s ultimate beneficial owner information is shared with and how this affects your personal/tax planning?
- How will you document your business model and fund origin for opening a bank account?
At Corpenza, we approach company formation in offshore and nearshore centers like Panama not just as a “formation service” but as a strategic structuring covering multiple countries. In this context:
- Company formation and articles design in Panama,
- Tax and holding structuring compliant with Turkey and Europe,
- Integration of international accounting and reporting processes,
- If sending personnel abroad, aligning payroll, EOR, and posted worker models with your Panama structure,
- Banking, residency permits, and future necessary investment residency/citizenship plans
are planned under a single roof.
This approach ensures that your company in Panama is not only sustainable and defensible in real commercial life, banks, and tax administrations but also on paper.
Conclusion: How Should You Position Company Formation in Panama for 2026?
As we enter 2026, Panama still stands out globally due to:
- Fast and flexible company formation,
- Strong tax optimization opportunities with the territorial tax system,
- Modern, internationally compliant, and investor-friendly legal framework
However, at the same time:
- Transparency requirements stemming from OECD, FATF, and CRS,
- Economic substance and beneficial ownership reporting,
- Tax and compliance rules affecting multiple countries
make it increasingly risky to manage these structures without professional support.
If you are considering establishing a company in Panama for 2026 as a holding or asset protection tool, you must approach the process from a multi-country perspective. Corpenza is here to assist you with its experience in company formation, residency, tax, payroll, and personnel mobility on a European, Turkish, and global scale.
Disclaimer
This text is prepared for general informational purposes and does not constitute legal, tax, or financial advice in any way. Since regulations in Panama and other countries can frequently change, you should check current official sources and announcements from relevant country authorities before making decisions, and also seek professional support from qualified legal, tax, and investment advisors. The author and Corpenza cannot be held responsible for the consequences of actions taken based on the information here.
