Taxation only on Panama-source income
Foreign income (earned outside Panama) is generally tax-free
Residency programmes start from a USD 200,000 investment
Generally no corporate income tax in Panama, provided no business is carried on within Panama
Dividend tax may apply on distributions, typically 5% or 10%
Opening a bank account requires a clear business purpose and complete documentation
A licensed local Resident Agent as well as annual compliance obligations are required
Panama operates a territorial tax system. This means that only income generated within Panama is taxed. Foreign-managed companies that operate exclusively outside Panama are generally not subject to Panamanian corporate income tax on foreign-source income.
However, Panama levies a dividend tax. In practice, this is usually 5% on profits from foreign or export income and 10% on profits from Panamanian sources (20% for bearer shares).
This makes Panama a well-known jurisdiction for asset protection, international advisory structures and holding companies.
Panama also offers tax advantages for private individuals. Under the territorial principle, foreign income is generally tax-free.
In terms of immigration, the Qualified Investor Programme has required a minimum investment of USD 300,000 (real estate option) since 2024. The Friendly Nations Programme is generally based on an investment of USD 200,000 in real estate or a bank deposit, or on an economic connection.
A Panama S.A., governed by Law 32 of 1927, can be structured with an international focus and remains tax-neutral on foreign income, provided there is no Panama-source income.
Panama has an established civil law legal system as well as an international services environment. Compliance and transparency requirements have increased in recent years. Panama is now regarded as a regulated mid-shore jurisdiction rather than a classic offshore centre.
Bank accounts can be opened locally. International banking solutions are possible, provided the economic purpose, business model and source of funds are properly documented.
Contact us for an individual assessment and possible alternative structuring solutions.
For an S.A., there is generally no requirement to appoint a local director. However, a licensed Panamanian Resident Agent is mandatory for incorporation and ongoing compliance.
Yes, but the compliance requirements are high. Without a clear business model and full documentation, opening an account may be delayed.
Panama is on the EU tax list of non-cooperative jurisdictions; however, since 13 February 2026 it has not been on the FATF grey list.
Corporate income tax is 25% on Panama-source income. Dividend tax is generally 10% (domestic profits) or 5% (foreign or export profits).
| Tax Burden | Banking | Reputation | Bureaucracy | Legal Security | Costs | |
|---|---|---|---|---|---|---|
| USA | 21-0% |
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from EUR 1,900 |
| Singapore | 0% |
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from EUR 2,950 |
| Hong Kong | 0% |
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|
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from EUR 1,900 |
| Cyprus | 15% |
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from EUR 1,900 |
| Malta | 5% |
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|
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from EUR 2,500 |
| Ireland | 12,5% |
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from EUR 1,950 |
| Trust | 0% |
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from EUR 4,900 |
| England | 25-19% |
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from EUR 1,000 |
Your country of residence may impose tax and reporting obligations for foreign business activities and dividend income—in some cases even if profits are not distributed.
Depending on your personal situation, a suitable holding structure may be required to comply with tax rules and avoid unnecessary tax risks.
To determine which jurisdiction and structure best meet your requirements, please use the contact form and describe your plans in as much detail as possible.
Our advisers will be happy to review your case and advise you accordingly.
