Panama City is one of the world’s least expensive cities. But it is also among the most modern and prosperous one in Latin America with around 3 million population. The city can be seen as array of tall skyscrapers in reminiscent of Miami. Last past seven years, Panama is being consistently rated in top ten retirement place globally. With a welcoming community, safe environment, excellent intensives, low crime stats, natural beauty and ethnic diversity Panama sound like an appeal for good and healthy investment. And that too, foreign investment in Panama is now a lot easier than ever it was. And is also something that the Panamanian government has always encouraged. If you’re interested in starting a business in Panama be sure to read this article.

Benefits of having Panama Corporation?

By new domestic policy, law 41 (2007) and free trade agreement with US is specially designed to reward multinational corporations, whether small or large, for establishing their head quarter in Panama. Along with US Dollar a global benchmark currency, that too with little or no exchange rate parity fluctuation like Middle East currencies, has set cost of living significantly lower than compared to Western Europe.

Nowadays, many investors, who all are starting a new business in Panama or if they are purchasing new real estate, decides to use a corporate entity as an ownership automobile. The specific corporate form can be defined during the due diligence phase, and the corporation must be established in conjunction with the project but not as a separate consideration. Such corporate ownership offers privacy, flexibility in estate planning, tax management, representation and asset protection very easily.

Whether to Use Local or Existing Foreign Corporate Entity?

The answer is “it depends”. But in most of the cases the use of local entity is beneficial. But while using foreign entity, one has to register in the public registry. However law 41 has streamlined the procedure for registration of foreign entities buy still it could take several weeks till completion of the process. The Panamanian commercial laws allow many corporate forms, but among them two are the most important that offers the investor structures similar to the familiar limited liability company. And these are 1) sociedead de responsabillidad limitada and 2) sociedad anonima. These two forms with the SA are the most prevalent forms when determining the correct choice of forms as a part of your due diligence efforts.

SA has many features that offer privacy and some of the important are:

  • No requirement to disclose ownership
  • No restriction on owning an investment outside of Panama
  • No restriction concerning ownership of shares
  • No residence requirement for directors/officers
  • No requirement to file annual financial statements
  • No requirement to hold annual general meetings of shareholders/ directors
  • The accounting books of the corporation can be kept in any part of the world in any language.


A corporation may be adopted bylaws for the regulation of its internal procedures and affaires, but it is mandatory. And if by this way they can be registered at the discretion of directors of the corporation. Registration by law is not mandatory, but if decided by the directors to register with the law, any amendments have also to be. But for privacy and convenience it is advisable to go against the registration option. All these justify the Benefits of having Panama Corporation.