Panama Offshore Company in 2026: What's Legal, What It Costs, What Changed

Is Panama still a tax haven in 2026?

Panama still does not tax income a company earns abroad. As of October 2026, however, it is off the main international blacklists, and it is no longer a secrecy jurisdiction in the legal sense. Which label you hear depends on who is applying it and when their information dates from.

Where Panama stands on the lists (October 2026)

The EU kept Panama on Annex I, its list of non-cooperative jurisdictions for tax purposes, at the review adopted on 17 February 2026.^[1] On 9 October 2026 the Council removed Panama from Annex I and placed it on Annex II, the list of jurisdictions whose commitments are still being monitored.^[2][3] Panama now awaits an in-depth OECD Global Forum review of how it exchanges tax information on request. The next EU update is expected in February 2027.

On money laundering, the FATF removed Panama from its list of jurisdictions under increased monitoring (the "grey list") in October 2023.^[4] The EU followed in 2025 by taking Panama off its separate list of high-risk third countries for money laundering.

Panama adopted OECD tax-information standards in October 2016. It has exchanged financial account data automatically since December 2020.^[5] In practice, if you are tax resident in a country that takes part in the Common Reporting Standard (CRS), details of Panama bank accounts held by you or your company generally reach your home tax authority. US persons are covered by a separate FATCA arrangement.

Status as of October 2026. EU lists are reviewed twice a year; the next review is expected in February 2027.

The honest answer

One meaning of "tax haven" is a place that does not tax profits earned elsewhere. By that test Panama still qualifies: a Panama company that does business only outside Panama pays no Panamanian income tax on that income.^[6] The other meaning is a place where you can hide who owns a company, or keep income away from your own tax authority. By that test Panama no longer qualifies.

The reputation has deep roots. Panama began registering foreign ships in 1919, and the 2016 Panama Papers leak from the law firm Mossack Fonseca made "Panama company" shorthand for hidden wealth.^[6] Even critics now group it with Dubai, Seychelles and the Cook Islands as a looser, less central haven, rather than alongside the major financial centers.^[7]

For a US citizen, Panama is not a tax haven in any useful sense. The US taxes you on worldwide income wherever your company is incorporated. The section below on home-country obligations explains what that means in practice.

What a compliant Panama offshore company looks like in 2026

A compliant Panama offshore company is an ordinary Panamanian corporation (sociedad anónima, or S.A.) with four features:

• its income comes from outside Panama;
• its owners are reported to the government;
• its accounting records go to its resident agent every year;
• its annual fee is paid on time.

Formation is the easy part. Staying compliant is what separates a usable company from a suspended one.

What "offshore company" actually means

An offshore company is simply a company registered in one country that does its business somewhere else. That is the whole answer, whether you searched "apa itu offshore company" or "azienda offshore". Panamanian law has no separate offshore entity type. An "offshore corporation" is the same S.A. that local businesses use, governed by Law 32 of 1927, and "offshore" only describes where its income comes from.

Searches for an "offshore LLC" usually lead, in Panama, to the sociedad de responsabilidad limitada (S. de R.L.). It is less common than the S.A. for foreign owners. Our Panama corporation vs LLC vs foundation comparison sets out when each makes sense.

The legal minimums

• A name ending in S.A., Sociedad Anónima, Corp., Corporation, Inc. or Incorporated, not already in use.
• Articles of incorporation (pacto social), generally signed by two subscribers before a Panamanian notary. In practice these are often staff of the law firm, who hand the shares over once the company exists.
• At least one shareholder, of any nationality and residence, which can be an individual or another company.
• Three directors and three officers (President, Secretary, Treasurer), who can live anywhere.
• A resident agent, who must be a Panamanian lawyer or law firm, and a registered office in Panama.
• No minimum paid-in capital. Authorized capital is typically stated as US$10,000 divided into 100 shares.
• No annual general meeting requirement. Meetings can be held anywhere in the world.

What is public and what is not

Directors' and officers' names are filed with the Public Registry and can be looked up by anyone. Shareholders' names are not required to appear on the public record.^[6] That is the extent of the privacy that remains.

The beneficial owners behind the company are reported to a closed government registry, explained below. Your bank knows who you are, and under CRS so does your home tax authority. Panama's privacy now protects you from the curious public. It does not protect you from tax or law-enforcement authorities.

Bearer shares and nominees

Bearer shares survive only under a custody regime. Since Law 47 of 2013, as amended by Law 18 of 2015, every owner of bearer shares must place the certificates with an authorized custodian. That means a licensed bank, a trust company, a brokerage house, a securities depository or a registered Panamanian lawyer. New certificates must be delivered within 20 days, with a sworn declaration identifying the owner.^[8] Companies that never opted into the custody regime by the end of 2015 generally had their articles amended by law to prohibit bearer shares.

Nominee directors and nominee shareholders are still legal. They no longer hide anyone, because resident agents now also report whether a company uses nominee services, and banks ask. If you have a genuine reason for nominees, such as keeping directors local for administration, that is fine. If the reason is to keep your name off the record, it will not work.

Annual accounting records under Law 52

Every Panama company, including one that does business only abroad, must deliver its accounting records, or a copy, to its resident agent by 30 April each year for the previous calendar year. It must also keep supporting records for at least five years.^[9] The content depends on what the company does:

• A company that only holds assets provides information showing the value of its assets, the income they produce and the related liabilities.
• A company trading outside Panama provides a journal and a ledger.^[9]

The rules are set by Law 52 of 2016 as amended by Law 254 of 2021, and regulated by Executive Decree 177 of 30 December 2024.^[10] A company with no operations and no records still has to give its agent the information the decree specifies.^[11] The often-repeated line that an offshore company files nothing is out of date. Companies that withhold records from their agent face fines generally quoted at US$5,000 to US$1,000,000, plus suspension of corporate rights.

Which Panama vehicle fits

If you are comparing a foundation with a common-law structure for asset protection, our guide to Panama foundation vs offshore trust covers control, privacy and US reporting side by side.

How formation works when done remotely

You do not need to travel to Panama for an offshore company setup. When we form a company for a client abroad, the process runs by email and courier. You sign and, where needed, notarize and apostille your identity documents at home.

1. Structure and purpose
   Agree what the company will do, who owns it, and whether it sits alone or under a foundation. This decides the bank you approach and the records you will keep.
2. Know-your-client file and name check
   Provide passports, proof of address, a description of the activity and evidence of where the funds come from for each owner and director. The name is checked against the Public Registry.
3. Articles signed and notarized
   The articles of incorporation are signed by the subscribers and executed as a public deed before a Panamanian notary.
4. Public Registry filing
   Registration usually takes a few business days once the deed is filed. The Registry itself says it can take one to two weeks depending on workload.^[12]
5. Beneficial owners and tax ID
   The resident agent records the beneficial owners in the government registry, and the company obtains its tax number (RUC) from the tax authority (DGI).
6. Bank account
   The bank runs its own due diligence, typically taking two to six weeks. Expect about three to eight weeks in total from signed documents to an operating account.

Territorial tax: what Panama taxes and what it doesn't

Panama taxes only income produced in Panama. Income from activities carried out abroad falls outside its income tax, even when the company is incorporated in Panama.^[6] What matters is where the activity happens, not where the company is registered or where the money is banked.

A company that does earn Panamanian income is taxed like any local business. That means 25% on net profit, with an alternative minimum (CAIR) of 4.67% of gross taxable income once taxable income exceeds US$1.5 million. An annual license tax of 2% of net worth, capped at US$60,000, applies to companies operating in Panama, and ITBMS (VAT) is generally 7%. For the full picture on offshore company tax, and where legitimate planning ends and tax avoidance begins, see our guide to corporate tax in Panama.

Rates as of October 2026. Real estate figures apply to sales outside the company's ordinary business.

Where the line gets blurry

Three situations cause most of the problems we see:

• Panama clients: serving customers in Panama makes that income local.
• Panama property: a company holding Panama real estate is taxed on the rent and the gain.
• Managing from a Panama office: running international business from a Panama office raises technical sourcing questions and, generally, licensing ones. Companies doing commercial activity in or from Panama typically need an operations notice (aviso de operación). Companies operating exclusively abroad generally do not.

Our list of tax mistakes companies make in Panama covers the filing errors behind most penalties.

Law 526 of 2026: the new economic substance rule

Law 526 of 28 May 2026, published in Gaceta Oficial No. 30534-B, adds economic substance rules for foreign-source passive income to the Fiscal Code (articles 707-A to 707-Ñ). It applies from fiscal year 2027.^[13] It reaches only entities that belong to a multinational group, are incorporated or domiciled in Panama, and earn passive income from abroad.^[14] In practice, that means dividends, interest, royalties, capital gains, real estate income and other income from capital.

To keep that income exempt, a qualifying entity must report each year, in its tax return, evidence of three things. First, adequate, paid and qualified staff and premises in Panama. Second, strategic decisions taken and risks borne in Panama. Third, adequate operating costs incurred in Panama.^[14] An entity that fails to report, fails the tests or files inconsistent information becomes "non-qualified".^[14] Non-qualified entities pay a single, final 15% rate on that net passive income. The law also lets the Ministry of Economy disregard arrangements whose main purpose is a tax advantage without valid commercial reasons.^[14]

Executive Decree 32 of 2 September 2026 partially regulates the law.^[13] Under the decree, pure holding entities of shares or real estate generally face a lighter test focused on personnel and premises. That test is presumed met if the entity has a paid director or administrator resident in Panama.

What US, Canadian and EU owners still owe at home

Panama not taxing your company's foreign income does not stop your home country from taxing you on it. For residents of the US, Canada, the UK and most of the EU, a Panama company often changes the paperwork more than the tax bill.

US citizens and green card holders

The US taxes its citizens and residents on worldwide income, and owning a foreign corporation adds information returns on top. The main ones:

• FBAR (FinCEN Form 114): required if your foreign financial accounts together exceed US$10,000 at any point in the year.^[15] It is filed electronically and due April 15, with an automatic extension to October 15.^[16]
• Form 8938: applies above thresholds that vary with where you live and how you file. Reportable assets include stock in a foreign entity held for investment.^[16]
• Form 5471: required for certain US officers, directors and shareholders of foreign corporations.^[17] It is attached to your income tax return, with a separate form for each company.^[18] The penalty for late or missing information is US$10,000 per company per year. A further US$10,000 accrues for every 30 days after an IRS notice, up to an extra US$50,000.^[19]

Beyond the forms, the US controlled foreign corporation rules (Subpart F and related regimes) can tax much of a Panama company's income to its US owners each year, whether or not it is distributed. There is no income tax treaty between Panama and the US; the two countries exchange information instead. A Panama company can still make sense for a US person who wants to hold Panama property, run real local operations or plan succession. It rarely makes sense as a way to reduce US tax.

As of October 2026. Confirm thresholds and filing status with your US tax preparer each year.

Canada, the UK and the EU

Canada, the UK and most EU countries have their own controlled-foreign-company rules, which can attribute a foreign company's passive or low-taxed profits to resident owners. Most also have foreign-asset reporting. Many of these countries additionally treat a company managed from their territory as tax resident there. A Panama company whose owner makes every decision from Toronto or Madrid may therefore be taxed as a Canadian or Spanish company.

Treatment also varies country by country. Spain, for example, has generally not treated Panama as a tax haven since the two countries signed a double tax treaty in 2011. As a rule, check how your country of residence treats a Panama company before forming one, not after. We coordinate with your home-country adviser when a structure depends on it.

If you live in Panama

If you move to Panama and become tax resident there (and are not a US person), the territorial rule generally applies to you personally as well. For many owners, that is the point at which a Panama company starts to make real sense. Our guides to Panama taxes for expats and Panama residency routes cover how that works.

Panama beneficial ownership register and bank due diligence

Every Panama company must have its beneficial owners recorded in the RUBF, a private government registry run by the Superintendency of Non-Financial Regulated Subjects (SSNF). Separately, every Panama bank traces the company to you before it opens an account. These are the two filters that ended the anonymous "Panama offshore" company.

How the beneficial owner registry (RUBF) works

The registry was created by Law 129 of 17 March 2020.^[20] It formally launched on 18 April 2022 as the Private and Single System for the Registration of Beneficial Owners, regulated by Executive Decree 13 of 25 March 2022.^[21] It covers sociedades anónimas, limited liability companies, private interest foundations and foreign companies with a Panamanian resident agent.^[22] Registration carries no government fee.^[23]

The registry is not public. Only your resident agent loads and updates the data, and access is restricted to authorized Panamanian authorities, who can share it under information-exchange agreements.

A beneficial owner is the natural person who ultimately owns or controls the company. That generally means anyone holding 25% or more directly or indirectly, or anyone exercising effective control by other means. If a company owns your Panama company, the analysis follows the chain until it reaches real people. For each beneficial owner the agent records:

• full name;
• passport or ID number;
• date of birth and nationality;
• residential address;
• the date the person became a beneficial owner and the criterion used.

Deadlines and penalties

When ownership changes, the company must inform its resident agent within 15 business days. The agent then has 5 business days to update the registry.^[20] The implementing decree says the agent should update the information as soon as a change occurs, so treat 15 business days as the outer limit, not a target.^[24]

Changes that trigger an update include:

• a sale or gift of shares;
• an inheritance;
• a capital increase;
• a restructuring of a parent company abroad.

Resident agents face fines of B/.1,000 to B/.50,000 (the balboa is at par with the US dollar) for each company whose information is not registered or updated.^[20] Companies whose agent is not properly registered lose their corporate rights until the agent fixes it.^[20] The maximum fines have changed with successive amendments, and older figures still circulate. We confirm the rule that applies to your company when we take it on.

Opening a bank account

Bank due diligence is now the real bottleneck, not company registration. Under the Superintendency of Banks' anti-money-laundering rules issued in January 2026 (Agreement 1-2026), banks must:

• obtain evidence of the company's incorporation and current standing, and refuse a relationship with a suspended company;
• keep tracing ownership until they reach the natural persons behind it;
• identify the directors, officers and legal representatives.^[25]

The previous rules required banks to identify every shareholder of a sociedad anónima holding 10% or more.^[26] Expect at least that standard, and often more.

Acceptance is at each bank's discretion. Applications are commonly refused for five reasons:

• no clear business purpose;
• source-of-funds evidence the bank cannot verify;
• unexplained nominee arrangements;
• owners resident in jurisdictions the bank rates as high risk;
• activities the bank does not serve.

Some banks ask for a minimum average balance in the region of US$10,000, and some open accounts without a visit to Panama. Timelines of two to six weeks are typical.

What it costs to register an offshore company in Panama

To register an offshore company in Panama, expect a realistic total of about USD 1,500-3,000 in the first year and USD 1,500-2,500 a year after for a holding company. An active trading company with full bookkeeping costs more. The government's share is small; the resident agent, legal work and compliance make up most of the cost.

The tasa única (annual fee) is US$300, paid at registration and then every year after, under Law 28 of 2012.^[27] Public Registry registration duties scale with the company's declared capital.^[12] Most formation packages bundle these government fees.

Figures as of October 2026. Government fees are official; other figures are typical market ranges and vary with the structure and the bank.

What happens if you stop paying

The tasa única is due by 15 July for companies registered between January and June, and by 15 January for those registered between July and December. A late payment adds a B/.50 surcharge.^[27] After three unpaid years the company is suspended. Reinstating it then requires a B/.1,000 rehabilitation fine plus B/.25 in registry tax, on top of the arrears.^[27]

Under Law 254 of 2021, a suspended company has one year (previously two) to reactivate by paying the fine and curing the default. After that the Registry moves toward dissolution.^[28] This is not a rare event: by the early 2020s, more than 385,000 Panama companies, over half of all ever incorporated, had been suspended, mostly for unpaid fees.^[5] Suspension matters beyond the fine, because banks must refuse to deal with a suspended company.

Annual compliance calendar

As of October 2026. Canadian, UK and EU owners should add their own country's foreign-company and foreign-asset reporting dates.

Who a Panama company suits, and who it doesn't

A Panama company suits people who have a real international activity or a real asset to hold, and whose home tax position the structure does not undermine. It does not suit anyone whose main goal is to pay less tax at home or to keep their name off the record.

It generally suits

• People who live in Panama, or in another country that does not tax foreign income, and run a business with clients abroad.
• Foreign buyers holding Panama real estate who want to transfer it by selling shares, or to plan succession. Pair this with a Panama real estate lawyer's title review.
• Families using an S.A. under a private interest foundation for succession, since Panama has no inheritance tax.
• International trading or service businesses with genuine operations, staff or management in Panama.
• Groups setting up a regional base with real substance, where the SEM or free zone regimes may fit better than a plain S.A.

It generally does not suit

• US citizens hoping to defer or reduce US tax. The controlled foreign corporation rules and reporting usually cancel the benefit and add cost.
• Residents of Canada, the UK or the EU who would manage the company from home and keep its profits.
• Online sellers and consultants whose clients, decisions and work are all in their home country.
• Anyone who cannot document the source of their funds, because no bank will open the account.
• Small activities where about USD 1,500-2,500 a year in maintenance outweighs any benefit.

There is no best country to set up an offshore company in the abstract. The right jurisdiction is the one that works with your country of residence, your bank and your actual business. For some readers that is Panama, and for many it is a company at home.

Red flags when choosing an offshore company service

Shelf companies, meaning companies incorporated earlier and sold ready-made, are legal in Panama. They rarely save meaningful time now. Banks review a company's full history, and the change of ownership must be reported to the registry within the same 15-business-day window. A fresh company with a clean record is usually the simpler choice.

If you are unsure which side of the line you fall on, send us your country of residence, what the company would do and what it would hold through our contact options. We will tell you whether a Panama company makes sense and, if it does, quote a fixed fee to set it up remotely. Where your home-country tax position needs specialist work, our FATCA and CRS tax advisory team handles the Panama side and works with your adviser at home.