# Panama

 Country code: PA · Currency: PAB · Language: Spanish

**Pros**
- Territorial taxation system exempting foreign-source income from local levies.
- Official use of the US Dollar ensuring monetary stability and preventing local currency devaluation.
- World-class logistics infrastructure and strategic geographic position for global trade operations.

**Cons**
- Persistent systemic corruption within the judicial and administrative branches of government.
- Complex banking regulations due to international pressure and inclusion on various financial grey lists.
- Significant bureaucratic hurdles and slow administrative processes for business licensing and permits.

Long story short: Here, your foreign income never gets taxed, a genuine fiscal open bar if you structure your company right. But setting one up takes patience: the administration drags its feet, corruption still greases plenty of paperwork, and banks put you through an FBI-style interrogation before opening an account.

The canal keeps the economy humming, the capital's skyline rivals Miami's, the food mixes fresh ceviche with American burgers, beaches and jungle sit an hour away, and in the wealthy neighborhoods, you live safe and easy.

## Will your income be taxed?

Long story short: YES, A LOT.
On paper, **Panama** shears you at up to **25%**. In practice, the *territorial* regime only bites income sourced locally: foreign salary, foreign dividends, foreign gains walk through untouched. The sticker is there to scare; the machinery doesn't reach that far.

Earn your living abroad and the local taxman mostly waves at you from a distance.

**01.1 Income tax**

| Metric | Value | Detail |
| --- | --- | --- |
| Personal income tax | 0 → 25% | progressive · 3 brackets |

| Bracket (USD) | Rate |
| --- | --- |
| 0 – 11,000 | exempt |
| 11,000 – 50,000 | 15% |
| 50,000 + | 25% |

**01.2 Tax residence test**

_All active rules must be met to make you tax-resident._

| Metric | Value | Detail |
| --- | --- | --- |
| 183-day rule | exists here |  |
| Economic interest | exists here |  |
| Family centre | does not exist here |  |
| Habitual abode | does not exist here |  |
| Extended-stay test | does not exist here |  |

## Will your wealth be taxed?

Long story short: YES, BUT LIGHTLY.
**Panama** takes a light trim on capital gains (**10%** at the top), with no annual wealth levy and no inheritance regime.

Your portfolio compounds with barely any friction; the state only shows its face when you sell. And even then, politely.

**02.1 Investment income**

| Metric | Value | Detail |
| --- | --- | --- |
| Capital gains | 10% | flat |
| Dividend tax | 10% | flat |
| Interest income | 0% | flat |

**02.2 Wealth & estate**

| Metric | Value | Detail |
| --- | --- | --- |
| Wealth tax | NONE | no annual wealth tax · no real-estate wealth tax · no net-worth assessment |
| Inheritance system | NONE | no estate tax · no heir-based duties · no succession tax framework. Wealth transfers across heir-classes are not taxed in this jurisdiction. Only standard probate / registration fees may apply. |

**02.3 Crypto**

| Metric | Value | Detail |
| --- | --- | --- |
| Crypto · tax regime | UNREGULATED | Fallback rate: 0% · Panama applies a territorial tax system (Art. 694 Tax Code). Gains from crypto-assets traded on international platforms are considered foreign-sourced and are effectively tax-free (0%) for residents. Local-sourced income is subject to progressive tax rates up to 25%. A comprehensive crypto bill was declared unconstitutional in 2023. |
| Crypto-to-crypto | NEUTRAL | a swap is not a taxable realisation event |
| FATF travel rule | NOT SIGNED | no information-sharing obligation on VASP transfers |

## Easy to run a company there?

Long story short: NO.
Corporate tax in **Panama** is **25%**, no IP-box mercy, VAT at **7** on top.

Operationally, running a company here is fine; fiscally, the state helps itself to a fat slice of every unit of profit. You do the work, they skim the cream.

**03.1 Rates**

| Metric | Value | Detail |
| --- | --- | --- |
| Corporate tax | 25% | flat |
| VAT standard rate | 7% | 3 distinct tiers in force |

| VAT family | Category | Rate |
| --- | --- | --- |
| Food & drink | food | 0% |
| Food & drink | non-alcoholic | 7% |
| Food & drink | alcohol | 10% |
| Print media | books | 7% |
| Print media | ebooks | 7% |
| Print media | newspapers | 7% |
| Culture | cultural events | 7% |
| Culture | cinema | 7% |
| Culture | theatre | 7% |
| Culture | museums | 7% |
| Culture | sports | 7% |
| Transport | public transit | 0% |
| Transport | rail | 0% |
| Transport | air | 0% |
| Hospitality | hotels | 10% |
| Hospitality | restaurants | 7% |
| Hospitality | takeaway | 7% |
| Health | pharma | 0% |
| Health | medical dev. | 7% |
| Energy | electricity | 7% |
| Energy | natural gas | 7% |
| Energy | district heat. | 7% |
| Energy | domestic fuel | 7% |
| Utilities | water | 7% |
| Utilities | waste | 7% |
| Clothing | kids clothing | 0% |
| Digital & telecom | digital | 7% |
| Digital & telecom | telecom | 7% |
| Digital & telecom | broadcast | 7% |
| Construction | construction | 7% |
| Construction | social housing | 7% |
| Agriculture | farm inputs | 7% |
| Agriculture | animal feed | 7% |
| Personal services | funeral | 7% |
| Personal services | hairdressing | 7% |
| Finance | insurance | 7% |
| Finance | financial svc. | 7% |

**03.2 Regime & registry**

| Metric | Value | Detail |
| --- | --- | --- |
| IP Box · Patent Box | NONE | no IP regime · IP income taxed under standard corporate rules |
| Misuse of corporate assets | NO CRIMINAL | no criminal liability · Under Article 251 of the Panamanian Penal Code, the crime of 'Administración Desleal' (Unfair Administration) requires the fraudulent disposal of assets to cause economic harm to partners, associates, or third parties. In a sole-shareholder scenario where the company is solvent, there is no third-party victim to satisfy the criminal typology, as the owner is the only person with an interest in the equity. Consequently, such actions are typically addressed through civil remedies (e.g., piercing the corporate veil) or tax penalties rather than criminal prosecution. |
| Shareholders privacy | PRIVATE | Registro Público de Panamá |
| Directors privacy | PUBLIC | Registro Público de Panamá |

**03.3 Incorporation cost**

_In this country, the most standard company form is called Sociedad Anónima (Corporation). The costs below are for incorporating a company in its simplest form, for reference only._

| Metric | Value | Detail |
| --- | --- | --- |
| Professional Incorporation Service Fee | USD 1,000 |  |
| First Year Annual Franchise Tax (Tasa Única) | USD 250 |  |
| Notary and Public Deed Documentation | USD 150 |  |
| Public Registry Registration Fee | USD 60 |  |
| Business License (Aviso de Operación) Government Fee | USD 50 |  |
| Total | USD 1,510 |  |

## A good fit for a holding?

Long story short: YES.
**Panama** pairs a *moderate* treaty network (**18** signed) with a *full participation exemption* (**100%** on qualifying dividends and gains).

A perfectly honest holding base: not the NL/LU/SG first division on treaty count, but the pipes don't leak.

**04.1 Substance & exemptions**

| Metric | Value | Detail |
| --- | --- | --- |
| Territorial · individuals | TERRITORIAL | territorial — foreign-source income generally untaxed |
| Territorial · corporates | TERRITORIAL | territorial principle — foreign-source profits generally exempt |
| Participation exemption | 100% | no minimum threshold · no holding period |
| CFC rules | NONE | no controlled foreign corporation regime · foreign-source corporate income out of scope |

**04.2 Withholding tax · non-resident**

| Metric | Value | Detail |
| --- | --- | --- |
| WHT · dividends | 10% | non-resident outbound |
| WHT · interest | 12.5% | non-resident outbound |
| WHT · royalties | 12.5% | non-resident outbound |
| Tax-haven WHT | NONE | no punitive rate on record |

**04.3 Treaty network**

| Metric | Value | Detail |
| --- | --- | --- |
| Treaties signed | 18 | active |
| Treaties pending | — | in negotiation |

## Easy to come and go?

Long story short: LITTLE.
Coming and going from **Panama** costs you nothing worth mentioning. *Territorial* regime (foreign income stays foreign), *no exit tax* at the door.

You show up with your stuff, you leave with your stuff, plus whatever you earned abroad in between. Borders the way they should all work.

**05.1 Exit & dual nationality**

| Metric | Value | Detail |
| --- | --- | --- |
| Exit tax | NONE | no triggers active · residence change tax-free · no deemed-disposal mechanism |
| Dual citizenship | FORBIDDEN | naturalisation requires renouncing existing citizenship |

**05.2 Citizenship paths**

| Metric | Value | Detail |
| --- | --- | --- |
| Residence | 5 years | available path to naturalisation |
| Marriage | 3 years | available path to naturalisation |
| Birth | jus soli | available path to naturalisation |
| Descent | 1 gen | available path to naturalisation |
| Investment | — | not available |

## Is your money watched?

Long story short: YES, CLOSELY.
Yes, your money is watched here. **Panama** signed *every major* automatic-exchange framework: CRS, FATCA, CARF, MLI, MAAC. Open an account and it gets reported straight to your home tax authority (Americans: FATCA applies, no exceptions).

Corporate registries stay *non-public*, which saves a thin slice of ownership discretion. But your financial trail is made of glass.

**Multilateral reporting frameworks — 4/9 active · 4 pending**

| Item | Status | Detail |
| --- | --- | --- |
| CRS | Signed | 2019 |
| CARF | Signed | 2025 |
| FATCA | In force | 2014 |
| MLI | In force | 2020 |
| BEPS | Signed | — |
| MAAC | In force | 2017 |
| GLOBAL FORUM | Signed | — |
| EOIR | In force | — |
| CRYPTO TRAVEL RULE | None | — |

## Is it blacklisted?

Long story short: YES.
**Panama** stacks the *EU non-cooperative list* on top of national blacklists. Counterparties routinely fire anti-abuse rules, jack up withholding, or refuse the deal entirely, and the EU layer makes the friction automatic across the whole bloc.

The jurisdiction itself is the risk; the substance of what you do there is a footnote.

**Blacklist exposure — Listed by 5 authorities**

| Item | Status | Detail |
| --- | --- | --- |
| EMBARGO | Clear | un / us / eu sanctions |
| FATF | Clear | grey / black list |
| EU | Listed | non-cooperative list |
| FRANCE | Listed | ETNC list |
| SPAIN | Listed | tax-haven list |
| PORTUGAL | Listed | favourable regimes |
| BRAZIL | Listed | low-tax list |

## Do you feel free there?

Long story short: PARTLY.
**Panama** sits in the *middle band* of the RSF press-freedom index (rank **\#53**): civil society functions, but the walls are real and you'll learn fast where they stand.

Crypto lives in the standard regulated tier.

**08.1 Press freedom**

| Metric | Value | Detail |
| --- | --- | --- |
| Press freedom · RSF index | 53/180 | score 66 · ↑ 30 ranks year-on-year |

Central bank digital currency

NONE

no announced CBDC program · no pilot · no retail or wholesale prototype on record

## Connected to the world?

Long story short: POORLY CONNECTED.
The two rails that matter are both dead in **Panama**. *Stripe* won't onboard you, so card payments mean a foreign structure or a local processor with its own rules. *Amazon* doesn't deliver either.

Some secondary services run (**4/11**), but for an online business this is swimming against the current.

**Accept payments — 2/6 available**

| Item | Status | Detail |
| --- | --- | --- |
| Stripe | Not available | card payments |
| PayPal | Available | wallet payments |
| Adyen | Not available | enterprise psp |
| Mollie | Not available | eu payments |
| GoCardless | Not available | direct debit |
| Paddle | Available | merchant of record |

**Bank and move money — 1/3 available**

| Item | Status | Detail |
| --- | --- | --- |
| Wise | Available | multi-currency |
| Revolut | Not available | personal banking |
| Revolut Business | Not available | business banking |

**Buy and sell on Amazon — 1/2 available**

| Item | Status | Detail |
| --- | --- | --- |
| Amazon | Not available | consumer delivery |
| Amazon Seller | Available | marketplace selling |

  SEE ALSO## Other jurisdictions worth comparing

Picked by similarity of strategic profile to Panama. No editorial ranking — neighbours in the same scoring space.

  PROFILE-ADJACENT Same shape, comparable overall friction.

 [   Honduras HN  → ](https://stateless.sx/en/country/hn) [   St. Helena SH  → ](https://stateless.sx/en/country/sh) [   Djibouti DJ  → ](https://stateless.sx/en/country/dj)

  NOTABLY MORE FAVORABLE Same family of strategies, higher total score.

 [   Nigeria NG  → ](https://stateless.sx/en/country/ng) [   Costa Rica CR  → ](https://stateless.sx/en/country/cr) [   Thailand TH  → ](https://stateless.sx/en/country/th)

  NOTABLY LESS FAVORABLE Same family of strategies, lower total score.

 [   Somalia SO  → ](https://stateless.sx/en/country/so) [   Niue NU  → ](https://stateless.sx/en/country/nu) [   Northern Mariana Islands MP  → ](https://stateless.sx/en/country/mp)