Panamanian Companies – Why are they still a viable alternative?

June 10, 2023

By Richard Ballard


Panamanian corporations continue to be an attractive option in the international business landscape for several fundamental reasons. Despite the constant changes and updates in global legislation, Panamanian corporations maintain certain advantages and distinctive features that make them relevant and attractive for various business purposes.

First, Panamanian corporations offer a high degree of confidentiality and privacy regarding the identity of shareholders and directors. This discretion is achieved using nominee shareholders and directors, thus maintaining anonymity, and protecting the privacy of the beneficial owners. This feature is particularly valuable for individuals or companies wishing to protect their wealth or avoid public exposure.

Second, Panama has established a solid and stable legal framework for corporations, which provides legal certainty for investors and entrepreneurs. Panamanian corporate laws and regulations are designed to facilitate the creation and operation of corporations, which implies agile and efficient procedures, as well as considerable flexibility in terms of corporate structure and management.

In addition, Panamanian corporations enjoy attractive tax benefits. In Panama, corporations that operate outside the national territory and do not derive income from Panamanian sources are exempt from taxation on profits earned outside the country. This tax advantage can be significant for those seeking to maximise their profits and minimise their tax burden. Panama has also established a sound and internationally recognised financial system, with a well-developed banking and legal infrastructure. This facilitates access to quality banking and financial services, as well as the efficient and secure conduct of international business transactions.

In summary, the use of Panamanian corporations remains attractive due to their ability to preserve confidentiality, offer legal certainty, provide favourable tax benefits, and take advantage of a robust financial system. However, it is important to keep in mind that each business situation and context is unique, so it is recommended to obtain specific professional advice before making any corporate decision.  

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