Panama City, Panama, October 20, 2026 – Company formation in Panama is getting easier to justify for foreign investors and entrepreneurs. Company Formation in Panama, a project by Bestax Accountants, says three changes in 2026 are behind the shift. Panama is off the EU tax blacklist. Investors have new residence rules. Some group companies face new substance rules from 2027. If you plan to set up a Panama company, you need to know all three.
What the 2026 changes mean for company formation in Panama
Each change affects a different type of client:
| Change | Date | Who it affects most |
| EU moves Panama from Annex I to Annex II | October 9, 2026 | Anyone opening bank accounts or signing with European partners |
| New Qualified Investor residence amounts | In force September 16, 2026 | Investors who also want to live in Panama |
| Economic substance rules for foreign passive income | From the 2027 fiscal year | Panama companies in multinational groups |
Panama leaves the EU blacklist
On October 9, 2026, EU finance ministers removed Panama from Annex I of the EU list of non-cooperative tax jurisdictions. Panama passed a new economic substance law earlier in the year, which led to the decision.
Panama now sits on Annex II, the EU’s watch list. Leaving Annex II needs an OECD Global Forum review and then a further EU decision. Banks continue to apply their own due diligence, so prepare your documents early.
Investors get new residence thresholds
Executive Decree 17 of September 8, 2026, set new minimums for the Qualified Investor program. You can qualify with US300,000innewrealestate,US500,000 in resale real estate or securities, or a fixed-term deposit of US500,000inastate-ownedbankorUS750,000 in a private bank.
You must keep the investment for at least five years. You can hold qualifying property through a company, as long as you are its ultimate beneficial owner.
Group companies must prove substance from 2027
Law 526 of 2026 applies from the 2027 fiscal year. The law covers Panama companies in multinational groups that earn foreign passive income, such as dividends, interest and royalties.
A covered company must meet the substance rules for its activities. These can include staff and premises in Panama, local decision-making and local operating costs. You can outsource qualifying work within Panama, and some pure holding companies face lighter rules.
A company that fails the rules generally pays 15% tax on that net foreign passive income. Standalone companies outside a group are not automatically covered.
How the firm handles company formation in Panama
Company Formation in Panama works with foreign investors, founders and family groups. The team coordinates the legal, tax and banking steps that sit around a new company.
Match the structure to the goal
Most clients start with one of three goals: holding assets, trading across Latin America or moving to Panama. Each goal points to a different setup:
| Client goal | Typical structure | Key 2026 point |
| Hold shares, property or portfolios | Panama corporation, sometimes under a private interest foundation | Check the substance rules if the company sits in a group |
| Trade or serve clients across the region | Panama corporation, with licences where needed | Check where the income arises under Panama’s source rules |
| Live in Panama | Qualified Investor application, with company ownership of the property where it fits | Keep the investment for at least five years |
The annual government fee is US$300 for a corporation and US$400 for a foundation. You also pay for a resident agent, a registered address and bookkeeping.
Set up the company and the bank file together
The team runs each setup in five stages:
- The team reviews your assets, income and home-country tax position, then recommends a structure.
- The resident agent reserves the name and files the articles with the Public Registry.
- The team registers the company with the tax authority and records its beneficial owners.
- The team prepares your bank file, including source of funds and the purpose of the structure.
- The team tracks the annual fee, the April 30 records deadline and any substance filings after setup.
The firm estimates incorporation at a few business days to two weeks once your documents are complete. Timing depends on due diligence, document preparation and registry processing. Bank approval is a separate step and is never guaranteed.
Prepare these documents before you start
Document requirements vary by bank, resident agent and your risk profile. Common requests for each shareholder, director and beneficial owner include:
- A valid passport copy
- Proof of address dated within the last three months
- A bank reference letter from your current bank
- A short CV or professional profile
- A clear source of funds, such as salary, business profits or a property sale
- A one-page description of what the company will do or hold
Complete details on ownership, business purpose and source of funds help the bank assess your application. Approval and timing stay at the bank’s discretion.
Keep the company compliant after setup
Panama companies now carry real reporting duties. Companies that operate outside Panama or only hold assets must deliver last year’s accounting records to their resident agent by April 30. After three unpaid annual fees, a corporation is suspended.
“Panama’s 2026 changes reward founders who plan properly,” said Haseeb Hamdani, FCCA, UAE-CA, of Bestax Accountants. “The EU decision is good news for Panama, but the new substance and records rules mean every Panama company needs a clear purpose. We build that purpose into the structure before the company is formed.” Investors and entrepreneurs can book a free consultation with the team to review their plans.
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