TBA & Associates

Panama holding company formation

Incorporation in Panama

International investors, financiers and businessmen find Panama an ideal foreign base country for world-wide operations and transactions. Panama taxes according to the territoriality principle (that is, it does not tax foreign-source income), only the income produced locally is taxable, disregarding the citizenship of the taxpayer. Dividends are not included as income subject to income tax.

Due to its structure, geographical position, political stability and characteristics of its economy, Panama has become one of the most important tax havens of the Western Hemisphere. It has excellent international transportation and communication systems; the United States Dollar has been a currency of legal tender for more than ninety years.

Panama has taken several steps to modernise its economy and promote foreign investment. Most Panamanian and foreign investors choose to form Corporations. There are no exchange controls, currency restrictions or reporting requirements, and Panama imposes no limits on monetary transfers to and from the country.


No reporting requirements.

It is possible to keep a business under direct control while maintaining complete confidentiality. Names of beneficial owners are not publicly available.

It is not required to file any changes to ownership schedule, after the registration is complete.

It is not required to maintain a legal address.

No citizenship or residency requirements or restrictions with respect to Owners, Directors and Officers as with most other tax havens.

Stockholders’ and Directors’ meetings may be held anywhere in the world.

Capital Shares may be issued in a nominative form, or to “Bearer” – the ideal protection of the Corporation owner’s identity and total privacy.

Funds and accumulated offshore profits can be deposited or invested in any country in the world without becoming subject to taxation in Panama.

One person might hold all three positions of a President, Corporate Secretary and Treasurer.

Other advantages of Panamanian corporations

Ultimate financial privacy

Asset protection

Income tax reduction or elimination

No inheritance, succession or gift taxes

Protection from inflation

Reduction in legal liabilities

Reduction in operating expenses

Freedom from currency exchange control

Local Government concessions, subsidies and support

Data on Owners and Directors is not publicly available and remain confidential

Easy access to North American and European Capital Markets

No international trade tariffs

No annual tax return requirements

No import/export quantity limitations

No costly bureaucracy

Panama holding company

The Panama offshore company is incorporated into organization of a parent company of interconnected businesses and it doesn’t adopt independent legal status of the offshore company in Panama.

The offshore holding can be sub divided in 2 levels parent company & independent subsidiary. The parent company which is commonly referred to as the holding company while the independent subsidiary is one which is connected with the offshore holding company.

Whether on or offshore, the subsidiary provides the actual economic performance in this model. The offshore parent company has only shares in the company & receives profits through dividends.

Advantages of Panama holding company

Profits collected from Panama Offshore Holding are free from any tax liability in Panama. Thus, it can be said that it’s a tool for procurement of tax benefits, to circumvent shareholding limits and realization of benefits as part of investment.

Special taxation conditions are applicable only if the holding company maintains its headquarters in Panama, thus resulting in beneficial taxation conditions. The profits being transferred from the subsidiary to the offshore holding company will not be considered as taxable income.

Since Cartel regulations often prohibit companies from holding larger capital investments in other companies so in many cases when the investment exceeds the minimum threshold value then it is associated with legal obligations. In order to avoid legal issues, one can establish a Panama Offshore Holding company.

The Panama holding company enables the transformation of direct equity investments into indirect equity investments. The offshore holding company existence makes it harder for legislators & regulators to uncover & prohibit indirect equity investment.

Panama company information

Type of company for international trade and investment

Generally, corporations are incorporated under the Corporation Statute Law 32 of the 1927 Commercial Code. Limited Liability Companies and Limited Partnerships are used also.

Procedure to incorporate

By presentation of the proposed corporation’s signed Articles of Incorporation before a Notary Public who creates a Public Deed for registration at the Public Registry.

Restrictions on trading

Cannot undertake the business of banking, trusteeship and trust administration, insurance, assurance, reinsurance, fund management, investment funds, collective investment schemes or any other activity that would suggest an association with the banking, finance, fiduciary or insurance businesses.

Language of legislation and corporate documents

Spanish and certified English translations.

Registered office required

Yes, must be maintained in Panama at the address of the Registered Agent.

Name approval required


Time to incorporate

One day, subject to name approval.

Name restrictions

A name that is similar to or identical to an existing company. Names of well known companies incorporated elsewhere or a name that implies government patronage.

Language of name

Names may be expressed in any language using the Latin alphabet. The Registrar may request a Spanish or English translation.

Names requiring consent or license

Bank, building society, savings, insurance, assurance, reinsurance, fund management, investment fund, trust or their foreign language equivalents.

Suffixes to denote Limited Liability

All Panamanian corporations must end with the suffix Corporation, Incorporated, Sociedad Anonima or the abbreviations Corp, Inc or SA. They may not utilise the suffix Limited or Ltd.

Disclosure of beneficial owner to authorities



Authorized and issued share capital

The standard authorised share capital is US$10,000 divided in to 100 common voting shares of US$100 each or 500 common voting shares of no par value; the capital may be expressed in any convertible currency. The minimum issued capital is either one share of no par value or one share of par value.

Classes of shares permitted

Non-voting shares, preferred shares and registered shares. Bearer shares can be issued but no-par-value and bearer shares must be fully paid when issued. The registered agent must keep the bearer shares certificate in safe custody and must notify the Registrar that the shares have been issued.


No corporation tax is levied on non-Panamanian sourced income.

Double taxation


License fees

Annual Franchise Tax of US$350 is payable – please check remarks below.

Financial statement requirements

No requirement if income is of non-Panamanian sources.


Both corporations and natural persons may act as directors and the minimum number of directors is three. They may be of any nationality and need not be residents of Panama. Panamanian companies are also required to appoint a minimum of three officers (president, secretary and treasurer) who may also be the directors.

Company secretary

A company secretary must be appointed, who may be a natural or corporate person. The company secretary may be of any nationality and need not be a resident of Panama.


The minimum number of shareholders is one.

Our company licensing services

— What we do and do not do

Our company is EXCLUSIVELY engaged in assisting worldwide clients, either individuals or corporate entities, to get duly and properly licensed with local Regulators and Financial Authorities to get respective official licenses to legally carry out their cryptocurrency or financial related business activities.

TBA & Associates Tax Business Advisors does not provide or carry out any sort of Cryptocurrency or Financial services!

Disclaimer: While TBA & Associates strives to make the information on this website as timely and accurate as possible, the information itself is for reference purposes only. You should not substitute the information provided in this article for competent legal advice. Feel free to contact TBA Customer Services for advice on your specific cases.

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