Types of Companies Suitable for Non-Residents in Panama
Panama is a well-established and globally recognized jurisdiction for international business. With its flexible corporate laws, favorable tax system, and strategic location, it attracts thousands of entrepreneurs, investors, and digital nomads seeking to set up a business. For non-residents, Panama company formation offers a wide range of options—whether for asset protection, international trading, holding investments, or launching a global enterprise.
In this article, we explore the most common types of companies available for non-resident business owners in Panama, their legal structure, benefits, and suitability for various business goals.
Why Choose Panama for Company Formation?
Before diving into company types, it’s important to understand why Panama is a top destination for non-resident entrepreneurs:
- Territorial tax system: Only income generated within Panama is taxed. Offshore income is tax-exempt.
- No restrictions on foreign ownership: Non-residents can own 100% of Panamanian companies.
- Fast incorporation process: Companies can be incorporated within 1–3 business days.
- Confidentiality: Panama has strong privacy laws that protect the identity of shareholders and directors.
- Robust banking and logistics: With one of the world’s largest free zones (Colón Free Zone) and over 70 international banks, Panama is ideal for trading and finance.
Now, let’s look at the types of entities most suitable for non-residents considering Panama company formation.
1. Panama Corporation (Sociedad Anónima – S.A.)
The Panama Corporation, also known as a Sociedad Anónima (S.A.), is the most popular structure for international businesses and one of the easiest to set up.
Key Features:
- Requires three directors (can be foreigners or Panamanian residents).
- Requires one shareholder, who may also be one of the directors.
- Bearer shares are not allowed—shareholders must be recorded by a resident agent.
- No minimum capital requirement.
- Companies can be used for international trade, holding assets, or consultancy.
Benefits for Non-Residents:
- 100% foreign ownership permitted.
- No local office or employees required.
- Anonymity: Shareholder and director details are not publicly disclosed (only through the resident agent).
- Global banking access, including in Panama.
This type of entity is ideal for non-residents who want to run an international business or hold investments in a confidential and tax-efficient way.
2. Panama Private Interest Foundation (Fundación de Interés Privado)
While not technically a company, the Private Interest Foundation is commonly used by individuals for estate planning, wealth protection, and inheritance purposes.
Key Features:
- Functions similarly to a trust but offers more flexibility.
- No shareholders; instead, it has a Council (like a board of directors).
- Assets transferred to the foundation are legally separated from the founder.
- Must have a resident agent in Panama.
- Does not engage in commercial activities directly (but can own companies, accounts, or assets that do).
Benefits for Non-Residents:
- Ideal for asset protection, especially from creditors or political risks.
- Offers confidentiality—no public registry of beneficiaries.
- Can be used in conjunction with Panama corporations for estate structuring.
For non-residents looking for a strong offshore asset protection vehicle, the Panama foundation is a strategic option.
3. Panama Limited Liability Company (Sociedad de Responsabilidad Limitada – SRL)
The SRL is less commonly used in Panama but may suit specific needs, especially small businesses or partnerships.
Key Features:
- Requires at least two partners (individuals or legal entities).
- Partners’ liability is limited to their contributions.
- No requirement for a board of directors.
- SRLs are subject to the same territorial tax regime as other Panamanian entities.
Benefits for Non-Residents:
- Easier internal management—fewer formalities than corporations.
- Flexible for joint ventures or small service providers.
- Full foreign ownership is permitted.
SRLs are best suited for non-residents who prefer a simpler governance model or are setting up small-scale international operations.
4. Offshore Company (Panama S.A. Used for Non-Panamanian Business)
Although there’s no specific legal form called an “offshore company” in Panama, the term is often used to refer to Panama Corporations (S.A.) that operate outside of Panama and earn only foreign-source income.
Key Features:
- Operates entirely outside of Panama.
- Can hold international bank accounts, own real estate abroad, or trade globally.
- Pays zero income tax in Panama on foreign-earned income.
- Must still file basic compliance documentation (but no annual income tax return if no Panamanian-source income).
Benefits for Non-Residents:
- Full tax exemption on global income.
- Quick and affordable setup.
- High level of privacy and asset protection.
- Can be combined with a Panama Foundation for greater control and succession planning.
If you’re a digital entrepreneur, consultant, trader, or investor, this is often the best Panama company formation option for you.
Other Considerations for Non-Residents
When forming a company in Panama as a non-resident, you should also consider:
Resident Agent Requirement:
All companies must appoint a Panamanian resident agent—typically a licensed attorney or law firm—to handle filings and maintain official records.
Nominee Services:
For added privacy, nominee directors and shareholders can be used, although the beneficial owner must still be declared to the agent for compliance.
Substance Requirements:
While Panama currently does not enforce strict substance requirements (i.e., local employees or office), global regulatory changes (OECD, FATF) mean that substance may become increasingly relevant for some industries.
Bank Account Opening:
Panama is known for its solid banking sector, but due to global compliance standards, bank account opening for non-residents may involve detailed KYC and due diligence. Professional assistance is strongly advised.
Conclusion
Panama offers an ideal environment for non-residents looking to incorporate businesses or protect their assets internationally. Whether you need a private corporation for international trading, a foundation for estate planning, or a simple offshore entity, the country provides flexible and tax-efficient solutions.
At BRIS Group, we specialise in Panama company formation for non-residents. Our team can guide you through the entire process, from selecting the right structure and preparing legal documents to appointing resident agents and opening a bank account.
Contact us today to receive a tailored quotation and consultation for your Panama company.
Companies for Non-Residents in Panama
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