Thinking about setting up in Panama for international operations, holding, or cross-border services? This plain-English guide explains who Panama suits, what documents you’ll need, how the process usually works, and what to plan for on banking and ongoing compliance. If you prefer a done-for-you route with clear timelines, see Panama company formation for a structured, start-to-finish service.
Why founders choose Panama
- Gateway location: a major logistics and services hub with strong international connectivity.
- Founder-friendly operations: straightforward incorporation and predictable annual maintenance when files are clean.
- Stable, service-driven economy: broad professional services ecosystem that understands cross-border business.
- Remote-friendly setup: most steps can be handled without travel when KYC is prepared properly.
Who Panama fits best
- Holding and IP vehicles managing group equity, licensing, or royalty flows (with proper compliance).
- Service and technology companies (consulting, agencies, SaaS, B2B services) selling to international clients.
- Trade and logistics support where counterparties value a well-known jurisdiction close to key shipping and finance routes.
- Early-stage fintech/crypto support entities for corporate structure and vendor contracts, provided activities align with applicable rules.
Important: If your product is regulated in your target markets (e.g., payment services or investment services), incorporation alone does not replace licensing. Plan any necessary approvals separately.
Common Panama vehicles (at a glance)
International founders typically use a standard Panamanian corporation for speed and familiarity. Some teams consider limited liability formats where they fit governance style better. Your registered agent will guide the exact choice; below is a neutral overview of what founders often look for:
- Simple share structure: ordinary shares cover most use cases; special classes can be added if needed for investors.
- Flexible governance: board meetings can be remote; resolutions can be passed quickly when the paperwork is tidy.
- Clear records: statutory registers and accounting records must be maintained and kept accessible.
Documents you’ll usually prepare
- Identity and address for each director, shareholder, and UBO (clear passport scan; proof of address under 3 months).
- Short background/CV for controllers and key officers.
- Company name options (2–3, in case your first choice is taken).
- Business summary (what you sell, where customers are, expected monthly volumes, and top counterparties).
- KYC/AML forms your registered agent will request.
Time saver: most delays come from expired IDs, address mismatches, and illegible scans. Double-check all details before sending.
How incorporation usually works
- Scoping call: align on the business model, shareholding, directors, and naming.
- KYC collection: submit IDs, addresses, and background info for all controllers/UBOs in one go.
- Drafting & filing: constitutional documents are prepared and submitted by the registered agent.
- Company issued: you receive the certificate and corporate pack once the registry confirms formation.
- Banking/PSP setup: open an operational account (often an EMI/PSP first for speed; bank second for redundancy).
- Post-incorporation: set invoicing, bookkeeping cadence, and your renewal/compliance calendar.
Timelines and what speeds them up
With a clean file, incorporation is straightforward. Keep momentum by:
- Sending complete KYC together (no piecemeal uploads).
- Using a consistent activity description across all documents and forms.
- Responding fast to minor clarifications from the agent or banking partners.
Accounting, maintenance, and governance
- Accounting records: keep underlying documents (invoices, bank statements, contracts) that explain transactions and financial position.
- Where kept: records can be maintained outside Panama, but you must let the agent know where they are and keep them accessible.
- Annual renewals: calendar your government/agent fees and any required filings to avoid late charges.
- Board hygiene: maintain a resolutions log for key actions (banking, officer appointments, contracts).
Substance and tax—practical view
Panama is widely known for a territorial principle, where the tax position may depend on the source of income. Your actual footprint also depends on where directors live, where decisions are made, where customers are based, and where contracts are executed. Keep these points in mind:
- Document decision-making and operations in line with your structure.
- Keep clean contracts and invoices that support your story with counterparties and banks.
- Plan country-of-residence obligations for owners/directors, not only Panama requirements.
This section is general information, not tax or legal advice. Get a tailored assessment before relying on any single rule.
Banking and payments: how teams actually do it
Offshore or cross-border structures are onboarded by banks and PSPs when they show strong control of funds and a clear activity profile. A workable approach looks like this:
- Two-track accounts: an EMI/PSP for daily operations and cards; a secondary bank/EMI for redundancy and extra currencies.
- Evidence of controls: KYC standards, sanctions screening, transaction monitoring, dual-control withdrawals where relevant.
- Counterparty clarity: who you pay and who pays you; expected monthly volumes; top geographies.
Choose providers that explicitly support your industry and corridors. Re-onboarding later is costlier than doing the fit check now.
Risk checklist (avoid these slowdowns)
- Vague activity description (“IT services”) with no details → more compliance questions.
- KYC gaps (expired ID, inconsistent address, missing UBO docs) → back-and-forth and missed launch dates.
- Bank mismatch (provider doesn’t support your flows/currencies) → forced account changes mid-scale.
- No paper trail (contracts/invoices scattered across chats) → tough audits and banking reviews.
- Late renewals → unnecessary fees and partner friction.
Governance toolkit for founders
- Use a clean folder structure (Corporate, Banking, Contracts, Accounting, Compliance).
- Keep a board resolutions register with dates and signatures.
- Adopt a monthly close checklist for bookkeeping, even if volumes are low.
- Prepare a one-page company profile for banks/vendors (model, geos, counterparties, volumes).
Alternatives worth comparing
Depending on your goals, compare Panama with BVI or Seychelles for holding/IP, and with Costa Rica for nearshore operations. Each offers different trade-offs in perception, reporting, and banking access. If you expect investor due diligence or complex vendor reviews, choose the jurisdiction your counterparties already recognize—it shortens sales cycles.
FAQ
Do I need to travel to Panama to incorporate?
Usually not. With properly verified KYC and a responsive registered agent, the process is typically handled remotely.
How long does it take?
Clean files move quickly; the longest part is often gathering complete KYC and answering small follow-ups.
Will I get a bank account?
Depends on your activity, geographies, and risk profile. Many founders start with a fintech-friendly EMI/PSP and add a traditional bank later for redundancy.
What ongoing work should I plan?
Annual renewals, tidy books, updated registers, and a basic compliance calendar. Keep your documents accessible for quick vendor/bank checks.
Who can help
LegalBison is an international advisory firm that helps entrepreneurs establish and manage companies across key offshore and onshore jurisdictions. The team combines legal precision with practical execution—incorporation, banking coordination, and ongoing compliance—so founders can focus on growth. Learn more at legalbison.com.