How to open a company in Panama as a foreigner: 2026 guide

Panama isn't only an attractive destination to buy real estate: for decades it has also been one of the most agile jurisdictions in Latin America to incorporate and operate a company. A foreigner can own 100% of a Panamanian company, with no need for a local partner, prior residency or minimum paid-in capital in most cases.

In this guide we explain which legal structure to choose, how much it costs, what the steps of the process are, and an important restriction that many foreigners are unaware of before starting.

1. Can foreigners own 100% of a company in Panama?

Yes, with one relevant exception. The general rule allows a foreigner to fully own a Panamanian company engaged in wholesale trade, professional services, consulting, logistics or most commercial and industrial activities.

The important exception: retail trade (selling at retail) is reserved by law to Panamanian citizens. A foreigner cannot operate a retail business without having a Panamanian partner or director in the structure. This restriction does not apply to wholesale trade, services or exports.

Nor is residency or a visa needed to incorporate a company: the process can be completed even without the investor being physically in Panama during incorporation, although presence will be required for certain subsequent procedures, such as opening a corporate bank account.

2. Choosing the right legal structure

• Corporation (S.A.): the structure most used by foreign investors. It allows limited liability, doesn't require minimum paid-in capital at the time of incorporation, and exists indefinitely even if its shareholders or directors change.
• Limited Liability Company (S. de R.L.): suitable for smaller-scale businesses or family companies. It can have between 2 and 20 partners, with liability limited to the amount of their contribution, and a minimum capital generally between $2,000 and $5,000.
• Branch of a foreign company: if you already have a company incorporated in your country of origin, you can register a branch in Panama instead of creating an entirely new entity.

For the vast majority of foreign investors seeking to operate, protect assets or establish an investment vehicle, the Corporation remains the most flexible and internationally recognized option.

3. The process step by step

• Selection of the corporate vehicle and proposal of three alternative names to verify availability in the Public Registry.
• Drafting of the articles of incorporation (bylaws) before a notary, with the assistance of a Panamanian lawyer.
• Designation of the Resident Agent: by law, every Panamanian company must have a Panamanian lawyer or law firm acting as resident agent.
• Registration of the company in the Public Registry of Panama.
• Obtaining the Single Taxpayer Registry (RUC) from the General Directorate of Revenue (DGI).
• If the company will operate locally, obtaining the Notice of Operation through the Ministry of Commerce and Industries' Panamá Emprende platform.
• Opening a corporate bank account, a step that generally does require physical presence or more detailed handling due to banking compliance matters.

The complete process, when the documentation is in order, usually completes within 3 to 7 business days.

4. The Notice of Operation: the only permit most businesses need

Since the creation of the Panamá Emprende system (Law 5 of 2007), Panama drastically simplified the commercial authorization process. The Notice of Operation, handled online from anywhere in the world, replaces most of the commercial licensing procedures that previously required multiple windows. It is, in practice, the only additional step most businesses need to begin formal activity in the country, beyond the incorporation of the company.

5. Costs to budget for

• Initial incorporation: a Corporation handled by a law firm usually costs between $1,500 and $2,500, including lawyer fees, Public Registry fees and notary expenses.
• Single Annual Fee: $300 to the Public Registry to keep the company in good standing; non-payment generates increasing surcharges.
• Resident Agent fees: mandatory by law, generally between $300 and $800 per year starting from the second year.
• Notice of Operation: a base fee of approximately $55 through Panamá Emprende, although the annual Notice of Operation Tax equals 2% of the company's net capital, with a minimum of $100.
• Minimum fixed annual expenses: for a small company, anticipate between $1,500 and $3,000 per year considering the single fee, resident agent and basic accounting.

6. The territorial tax system: a structural advantage

Panama operates under a territorial income system: only income generated within Panamanian territory is taxed. Income that a Panamanian company generates outside the country — for example, consulting services provided to international clients, or trade that doesn't involve local transactions — is not subject to income tax in Panama, regardless of whether those funds are remitted to the country or not.

This feature, combined with the absence of exchange controls and dollarization, explains why so many logistics, international trade and digital services companies choose to incorporate in Panama as a regional operating platform.

Frequently asked questions

Conclusion

Panama combines speed of incorporation, unrestricted foreign ownership (except for retail trade), and a territorial tax system that few jurisdictions in the region can match. For an investor already evaluating real estate in the country, incorporating a Panamanian company is usually a natural and complementary step, both for structuring the ownership of their assets and for eventually operating a business from the same platform.