Panamanian Companies and Foundations for International Business
Understand Panama’s principal legal structures, how they are used and the obligations to consider before forming one.
Request legal advice →A corporation and a private interest foundation can both help organize activities or assets, but they serve different purposes. The right choice depends on the intended use, who will manage the assets and where operations take place.
Two structures with different purposes
Corporation
Used to conduct business, enter into contracts, hold investments or own assets through a legal entity. It has shareholders, directors and officers.
Law 32 of 1927Private interest foundation
Used to organize assets for defined purposes. It has no shareholders; its governance involves a foundation council and beneficiaries.
Law 25 of 1995The main distinction is not which entity is easier to form, but its purpose and governance. Both require an assessment of the circumstances of each case.
How an international structure is set up
Define the purpose
Determine whether the objective is operating a business, holding investments or administering assets.
Plan the governance
Identify the participants, representation powers and documents needed.
Form and maintain
Complete the legal formalities and identify ongoing expenses and compliance requirements from the outset.
Obligations that continue after formation
Resident agent
The entity must maintain a resident agent under applicable law. Agent fees are separate from government charges.
Beneficial ownership and due diligence
Natural persons who ultimately own or control the entity must be identified under the statutory criteria. This information is not freely available in a public register, but competent authorities may access it.
Accounting records and documents
Requirements to retain accounting records and supporting documentation may apply even without local trading activities.
Taxation and maintenance
Panama generally applies a territorial tax system: tax treatment depends on the actual source of income. Incorporation does not automatically create a tax exemption. Periodic payments and filings must also be reviewed.
Choosing a structure for your project
Before forming an entity, review its purpose, relevant countries, intended governance and ongoing costs. Combining several entities is not always necessary.
Advice on international structures
I provide legal advice on assessing, forming and maintaining Panamanian corporations and foundations according to each project’s needs and obligations.
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