Panama corporations and bank accounts

The Republic of Panama is a globally popular jurisdiction for conducting all kinds of business and is recognized as the best country to start a business entity. We will take you through the basic steps of registering a business in Panama.

Read about Panama companies and bank accounts: latest news

Panama may have taken a reputational hit with the Panama Papers, but it’s now up and running again. It is well known as the “grandmother of all tax shelters” that has been in the offshore business since 1929. Even today, there are far more offshore businesses in the Republic of Panama than in most of the Caribbean combined.


In 2019, Panama, ranked 11th, is one of the world’s top 20 countries that attract the most global investment, ranked by the World Bank.

According to Global Finance Magazine’s dated October 2019, the flow of foreign direct investment to Panama increased by 21%. According to international experts, the country was able to move up several points in the global FDI ranking thanks to a record number of mergers and acquisitions.

Establish a company in Panama. A legal entity called Sociedad Anónima

Corporations in Panama are called Sociedad Anónima, which means “Shared Joint Stock Company” or “Shared Joint Stock Company”. Panama companies have the status of a legal entity and are the most popular companies that Panamanian, foreign business persons and investors register in the country.

Corporations in Panama are used for many different purposes. When incorporating an entity, you should list in the corporate documents as many types of business that a corporation can engage in as possible, even if the corporation actually only engages in some of them.

These can be purposes such as: acquisition and ownership of assets, tax planning, investment, commercial or industrial operations, asset protection and transaction planning within large financial holdings.


about which jurisdiction is best for your business, preferred tax system, corporate structure.

The main advantages and requirements for establishing Sociedad Anónima in Panama

  • A foreigner can own 100% of the shares in a Panamanian company. There are no restrictions on the founder’s nationality and no residency requirements.
  • High level of data security for the real owner and the company’s shareholders. Professional directors can be used officially.
  • The minimum required number of shareholders in a company is one (1) person (physical or legal).
  • There is no requirement for the size of the company’s paid-up share capital (USD 10,000 is standard)
  • Absence of government control over corporate capital.
  • Every company must have a registered agent in the country.
  • Appointment of a registered agent for the company (official representative for service of legal documents) is required.
  • The founder of the company is not required to be present at the registration of a Panamanian company. The registration procedure can be carried out on the basis of a power of attorney provided by the founder to a local law firm, or by using nominees. The company can be registered within 5 to 7 working days. Taking into account the opening of a business bank account in Panama and obtaining the necessary licenses that allow the company to operate locally, the time required for the entire registration process can extend to 6 to 7 weeks.

First step towards creating a Panamanian company

  1. The founder must enter into a contract with KGN or with a private lawyer. The lawyer will be the official legal representative of the company, authorized to represent it before the public authorities in Panama.
  2. The Company’s shareholders must submit appropriate KYC and due diligence documents.
  3. It is necessary to draw up the corporate governance rules, i.e. the articles of association, which must be presented by a lawyer to a notary public.
  4. The company’s incorporation documents will be registered with the Panamanian Companies Registry.
  5. After that, the registration certificate for the legal entity (company) will be registered with the local authorities.
  6. If the company intends to do business in Panama, a relevant business license will be obtained (according to the business profile) so that the business entity will be able to conduct commercial operations. This is not necessary for holding companies or those that only do business outside of Panama.
  7. A corporate bank account will be opened with a bank in Panama (this is optional as corporate accounts can be both Panamanian and foreign).
  8. Minimum deposit must be placed on the company account.

Definition of the company name

When registering a Panamanian company, the founder must submit at least three (3) company names. This is because the name presented for registration does not always meet the requirements for uniqueness. The registry has been in operation since 1929, so as you can imagine, many good names have already been taken.

Foreign words may be used in the name, but the following words or their abbreviations must be used: Sociedad Anónima (SA), Corporation (Corp.) or Incorporation (Inc.). The name can also be officially registered with translations in different languages, effectively giving the company different identities.

For a company name, it is prohibited to use words that may associate a company with a government agency, which will ultimately mislead consumers. Such prohibited words include: Trust, Fund, Finance, Bank, Insurance and others.

Corporate shareholders in Panama

The shareholders or owners of shares in a company are its owners. A company’s level of ownership depends on the amount of capital shares in the company, i.e. the number of shares purchased by each shareholder.

A Panama corporation may be organized by one or more shareholders, who may be individuals or legal entities. An important aspect of the company is that the shareholders have limited legal liability. This means that they are responsible for the company’s debts and for its management decisions according to the amount of invested capital.

In the case of a sole shareholder company, when you open a bank account, the bank may require you to submit a number of additional documents to confirm the identity of the ultimate beneficial owner.

According to the new international requirements for banking transparency, personal data about the company’s shareholders, when they open a corporate bank account, must be disclosed to the bank.

Modern companies may not issue bearer shares. If a legacy company has previously issued bearer shares, most banks, and most likely no banks at all, will open a corporate bank account for such a company. The only solution is to amend the company’s articles of association to remove the right to issue bearer shares.

Corporation Law of Panama – Law 32 gives shareholders the following rights:

  • Shareholders can make any changes to the articles of association.
  • They can freely dispose of part or all of the company’s assets.
  • With the consent of the shareholders, dissolution of the company, mergers and acquisitions can take place.
  • Shareholders can appoint and remove board members in the company, apart from the vacancies that result from the right to appoint members of the board.
  • Shareholders decide whether to use assets as collateral to guarantee payments to third parties (if this right is provided for in the articles of association).

Authorized capital of a company in Panama

The authorized or share capital of a company in Panama is the amount agreed between the shareholders, which is indicated in the memorandum of association as the company’s share capital at the initial stage of incorporation.

If necessary, the authorized capital of a Panamanian company can be changed up or down at any time. Usually, companies declare the minimum authorized capital of 10,000 US dollars, which can be expressed in any currency.

Such authorized capital is divided into the number of 100 shares of USD 100 each. Meanwhile, the company is not obliged to pay the share capital. At the same time, if the company issues shares, they must necessarily be paid by the shareholders.

The size of the share capital can greatly influence the bank’s willingness to lend to the company. Therefore, if a company in Panama intends to obtain a loan or credit from a bank during its business, the amount of its share capital must be quite relevant. No bank will take on the risk of granting a loan if the amount of the company’s share capital is insufficient.

The board of a Panamanian company

The board of directors are persons appointed by the shareholders to perform administrative functions and to jointly control and manage the company.

Board members are elected or dismissed by confirmation of the voting shareholders using the company’s outstanding shares.

The minimum number of directors is three (3). These persons may be of any nationality and may be natural or legal persons.

The presence of Panamanian citizens on the board greatly simplifies the company’s registration procedure, as well as obtaining various licenses or opening a bank account, if desired.

The board of directors can prepare bylaws for the management of the company and incorporate them into the bylaws (unless initially prohibited by the shareholders, which is specified in the bylaws).

Members of the board are not responsible for the company’s obligations and debts, but are fully liable personally or jointly for obligations imposed on them by the shareholders or for fraudulent insolvency.

This means that directors can be held responsible for the following:

  • Lack of financial efficiency, which is reflected in the capitalization of the company’s shareholder assets.
  • Insufficient bookkeeping in the company.
  • The quality of maintaining records that prove the true state of the dividend declared by the company.
  • Improper performance of direct duties, knowledge of violation of Panama law or company articles or articles of association, and violation of resolutions passed at general meetings of the company’s shareholders.

The annual general meeting of shareholders can be held physically or remotely by online video conference in any country. The place of the general meeting is determined in the articles of association.

If this is not mentioned in the articles of association, the shareholders’ meeting will be held in Panama. If at least one of the company’s shareholders cannot participate in the general meeting in remote format at the same time, such a meeting must not be held.

Registered agent and legal representative of the company, resident in Panama

Every Panamanian company must have an official legal representative and a registered agent. The legal representative can be any person of any nationality, while the registered agent must be a Panamanian practicing attorney licensed by the government or a Panamanian law firm. Where Offshore Pro Group registers Panama companies, we use our in-house law firm as registered agent by default.

When forming a Panamanian corporation, the participation of a registered agent is a legal requirement. It is the registered agent who will receive service of any legal documents on behalf of the company, such as court proceedings.

Legal or tax business address in Panama

One of the most important minimum requirements in Panamanian law for company registration in Panama is that the company must have a legal address in the country. This address is registered with the Panamanian Tax Office. It is customary to use the address of the registered agent solicitor or law firm.

This legal address will also receive official notices to the company from the country’s public authorities. If the company maintains its management outside of Panama, this legal address may be the legal address of the company’s registered agent.

Along with the stricter international rules on transparency, and so that a Panamanian company is not mistakenly considered a shell company, it can have a physical corporate office in the country with the local service staff. In this way, the company in Panama will meet all economic substance rules and will be able to confirm its real presence in the jurisdiction.

Opening a corporate account for a Panamanian company

Opening a business account is the final stage of the complete registration of a company in Panama. Panama’s banks are some of the most reliable and secure institutions in the world. There are about 80 international banks in the country, among them are the world’s best-known entities.

Bank requirements for opening an account in Panama can vary significantly from one bank to another. Most will require the physical presence of the signatories and beneficial owners in Panama, but a significant number of banks now allow remote opening, especially due to the Covid-19 pandemic.

To open a business account for a company, you must prepare the following documents:

  1. Color copies of passports of company directors, shareholders and persons who have access to the company’s bank account.
  2. Color copy of Panama’s Company Certificate of Incorporation.
  3. Color copy of the company’s articles of association and all amendments thereto.
  4. Two reference letters from the existing banks from the company’s directors and shareholders. (Nominee directors always have bank references available)
  5. Two professional letters of recommendation from partners to be submitted on company letterhead with contact information of the entity providing services to the company. These should preferably be issued by lawyers or accountants.
  6. A letter of recommendation from the bank to an existing legal entity that was used by the applicant to open an account prior to the establishment of a company in Panama.
  7. Evidence of origin of funds and business operations. Submission of accounts of income and accrued losses for the company and its shareholders. If the funds are of foreign origin, these documents must be apostilled.
  8. Background information describing the business and the nature of its operations, including estimated monthly volume of financial transactions (the estimate must be made for the next 8 months), customers and major suppliers.
  9. Bank application forms for opening a business account from each person authorized to use the business account.

To open a basic business account for your company, you must provide as many documents from the list above as possible. However, if you find it difficult to present something from the list, you can always talk to your KGN consultant about which alternatives are acceptable. When customers are transparent, honest and flexible, a solution can always be found if a document is missing.

Register a company in Panama

Business registration in Panama allows foreign investors to take advantage of the tax and legal advantages of asset protection in the jurisdiction. A Panama company is the best instrument to make investments, both in Panama and as a hub to enter the markets of other Latin American countries.

Our experienced experts will advise you on all aspects of doing business in Panama and will assist you with all necessary documents. Don’t hesitate to book a free consultation. You are welcome to send us an e-mail at and we will get back to you immediately.

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