Types of Companies You Can Register in Panama

Marketing Mirr Asia
Mar 12
3 min read

Updated: Oct 28

Panama remains one of the most attractive jurisdictions for entrepreneurs and investors seeking flexibility, asset protection, and a business-friendly environment. With its strategic location, U.S. dollar-based economy, and territorial tax regime, Panama company formation continues to attract startups, holding structures, and international enterprises.

This guide explains the main types of entities you can register in Panama, their key features, and compliance considerations.

1. Corporation (Sociedad Anónima – S.A.)

A Panama Corporation (Sociedad Anónima or “S.A.”) is the most commonly used business structure for commercial and holding purposes.

Key Features

At least three directors and one shareholder (individuals or entities).
No residency or nationality requirements for directors or shareholders.
Standard authorized share capital of USD 10 000 (not required to be fully paid in).
Shareholders’ liability limited to their contribution.
Board and shareholder meetings may be held anywhere.

Benefits

100 % foreign ownership permitted.
Only Panama-source income is taxable; foreign-source income is exempt.
Widely recognized globally for trade and investment.

Reference: Law 32 of 1927 – Sociedades Anónimas (Panama Assembly, official text) – the foundational corporate law establishing requirements for Panama corporations, including the three-director rule and flexible foreign ownership.

2. Limited Liability Company (Sociedad de Responsabilidad Limitada – S.R.L.)

A Panama S.R.L. (LLC) suits smaller businesses and partnerships seeking flexible management.

Key Features

Minimum two partners (no residency requirement).
Liability limited to each partner’s contribution.
Managed by one or more administrators.
Historically capped at 20 partners; modern practice allows more (confirm current limit before formation).

3. Private Interest Foundation (Fundación de Interés Privado)

A Private Interest Foundation is a civil-law structure designed for asset protection and estate planning rather than active trading.

Key Features

Created by a Founder and administered by a Foundation Council (usually 3 members).
A Protector and Beneficiaries may be appointed privately.
Can hold assets globally – real estate, bank accounts, securities, IP rights.
Foreign-source income not taxed in Panama.

Reference: Law 25 of 1995 – Private Interest Foundations (English translation, Gaceta Oficial No. 22 845) – the law regulating creation, structure, and confidentiality of Panama foundations.

4. General Partnership (Sociedad Colectiva)

At least two partners with joint and unlimited liability.
No statutory capital requirement.
Direct, informal management.

Best for: Professional or small enterprises where partners retain full control.

5. Limited Partnership (Sociedad en Comandita)

At least one General Partner (unlimited liability) and one Limited Partner (liability limited to capital contribution).
Common for investment funds and joint ventures.

6. Branch of a Foreign Corporation

Foreign companies may register a branch instead of incorporating a new entity.

Key Features

Must register with the Panama Public Registry (Registro Público de Panamá).
Requires a local legal representative.
Taxed only on locally sourced income.

Why Choose Panama for Company Formation

1. Territorial Tax System: Panama taxes only income earned within its territory. Foreign-sourced revenue is tax-exempt, and the standard corporate tax rate on Panama-source income is 25 %.

Reference: Dirección General de Ingresos (DGI) – Ministry of Economy and Finance, Panama – official tax authority outlining Panama’s territorial corporate tax framework.

2. Investor-Friendly Framework: 100 % foreign ownership, flexible meeting locations, bilingual documentation, and fast incorporation (≈ 10–15 business days after KYC approval).

3. Stable Financial Environment: Panama uses the U.S. dollar and maintains a regulated banking sector under the Superintendencia de Bancos de Panamá.

4. Strategic Location: Located at the crossroads of the Americas, Panama offers world-class logistics and trade access via the Panama Canal.

Compliance Essentials

Every company or foundation must appoint a licensed Panamanian resident agent.
UBO (ultimate beneficial owner) identification is mandatory under Law 23 of 2015 (AML).
Annual obligations: registered address, government franchise tax (“tasa única”), and record maintenance.

These measures keep Panama compliant with international AML standards and OECD guidelines.

How Mirr Asia Can Help

Mirr Asia assists throughout incorporation and beyond:

Choosing the optimal entity (S.A., S.R.L., Foundation, Partnership or Branch)
Drafting and registering constitutional documents
Handling AML/KYC onboarding and resident-agent appointments
Coordinating annual renewals and bank or EMI account setup

Whether you need an operating company, holding structure, or estate-planning foundation, Mirr Asia ensures full legal compliance and efficiency in Panama.