# The Panama offshore company

An offshore company is an ordinary Panamanian corporation whose income is produced outside Panama, so Panama does not tax it. It is not a separate legal form. Since 2016 it must keep accounting records, file a tax return each year, name its beneficial owner and, if it uses bearer shares, keep them with a custodian.

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## Same corporation, foreign income

The law has one corporation, the sociedad anónima, and it can do business abroad. What makes it offshore is that its income is not produced in Panama. Directing from Panama deals that take effect abroad does not change that, and its dividends from foreign income are not Panamanian income if it needs no business license.

Source: Law 32 of 1927, article 19; Tax Code, article 694

## What it still has to do

[Photo: Adam Jones](https://commons.wikimedia.org/wiki/File:Locomotives_Tow_Container_Ship_through_Miraflores_Locks_-_Panama_Canal.jpg)· [CC BY-SA 2.0](https://creativecommons.org/licenses/by-sa/2.0) 
- File an income tax return by March 31 each year.
- Pay the B/. 300 annual franchise tax.
- Keep accounting records for five years and give them, or a copy, to the resident agent by April 30.
- Have its beneficial owner filed by the resident agent and validated each year.
- Keep a resident agent in Panama.

Source: Tax Code, articles 318-A and 710; Law 52 of 2016, article 1; Law 129 of 2020, articles 11 and 13

## Accounting records

Even with no operations in Panama, a company keeps records that show its operations, assets, liabilities and equity. A company that only holds assets keeps the value of its assets, its income and its liabilities. One that trades abroad keeps a journal and a ledger, or a custodian’s statement or a balance sheet where the Commercial Code allows it. The records can be kept anywhere, inside or outside Panama.

The fine for not keeping them is B/. 5,000 to B/. 1,000,000 for the company, plus the suspension of its rights, and B/. 5,000 to B/. 100,000 for the agent.

Source: Law 52 of 2016, articles 1, 6 and 7, as amended by Law 254 of 2021

## Bearer shares

Bearer shares survive only under the custodial regime. Since the end of 2015 the articles of every company are treated as prohibiting their issue, except for companies that opted into custody and recorded it. A custodian can be a Panamanian bank, a supervised trust company, a securities house or a lawyer on a special registry of the Supreme Court, or a licensed institution in a FATF jurisdiction. Bearer shares not in custody lose their voting and economic rights by law, and their dividends are taxed at 20 percent.

Source: Law 47 of 2013, articles 5 to 7, 21 and 25, as amended by Law 18 of 2015 and Law 52 of 2016; Tax Code, article 733

## Shelf companies

Until a company formed for sale is sold, its beneficial owner is the resident agent, according to the Superintendency. Once sold, the agent files the new owner.

Source: Beneficial owner registry FAQ of the Superintendency of Non-Financial Regulated Entities, question 15

## Questions people ask

### Is an offshore company legal?

Yes. It is an ordinary Panamanian corporation whose income is produced abroad.

### Does an offshore company need a business license?

A business license is for operating in Panama. Whether a given company needs one is decided under the business license law, not the corporations law.

### Can I use nominee directors?

The corporations law neither regulates nor prohibits them. Directors need not be shareholders and can be removed at any time by the majority of voting shares, and banks must know if a company has nominee directors.

## What the law does not say

- Whether nominee directors carry any specific duty of disclosure beyond the beneficial owner registry.
- Whether a company with no movement at all in the year files a zero return.

## Official sources

- [Official Gazette of Panama](https://www.gacetaoficial.gob.pa/)
- [General Directorate of Revenue](https://dgi.mef.gob.pa/)
- [Superintendency of Non-Financial Regulated Entities](https://ssnf.gob.pa/)

Last verified: October 28, 2026

## Keep reading

- [How a Panamanian company is taxed](/taxes/)
- [The beneficial owner registry](/beneficial-owner/)
- [The annual franchise tax](/annual-tax/)

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