This site uses technical and analytics cookies to improve the reading experience. By continuing to browse, you accept their use.
Accept Privacy policy
Interviews, Professional Services & Technology

Kathia Rivera answers: incorporating a company in Panama as a foreigner, without travelling and in a week

Avatar photoDeilys Romero48 Mins Read
Kathia Rivera answers: incorporating a company in Panama as a foreigner, without travelling and in a week

In short: Panamanian law imposes no nationality or residency limits on incorporating a company, and neither directors nor shareholders have to travel. That is the answer given by Kathia Rivera Morales, founder and president of Legal Solutions Panamá, in a video on her channel where she answers the most frequent questions from people who want to set up a company in the country. Incorporation takes around a week with valid passports and two forms; the resident agent is the lawyer who registers the articles of incorporation and acts as the link between the shareholders and the State; the share capital is not paid in; and although bookkeeping was not mandatory for companies with no local operations when the video was recorded, the firm already recommended keeping it in Panama with certification by a certified public accountant, an obligation the law now imposes.
Contents of this interview
  1. Who answers and why it matters
  2. Can a foreigner incorporate a company in Panama?
  3. Do you have to travel? How long does it take? Which documents?
  4. What the resident agent is
  5. What a company operating outside Panama pays
  6. Share capital and bookkeeping
  7. What has changed since the recording
  8. The full video
  9. Frequently asked questions
  10. Sources

Who answers and why it matters

Kathia Rivera Morales is a lawyer trained at the University of Panama, with postgraduate studies at the University of Salamanca, and founder and president of Legal Solutions Panamá, a boutique corporate, tax and immigration law firm with more than ten years of activity and clients from more than 55 nationalities. The video, published on the firm’s YouTube channel under the title “Cómo creo una sociedad en Panamá siendo extranjero”, is one of the most viewed on the channel and answers in three minutes the questions Radar Panamá receives most often on the subject. The quoted phrases are translated from the Spanish recording, with minimal adjustments to punctuation.

Can a foreigner incorporate a company in Panama?

“Panamanian law does not establish nationality limitations for incorporating a company in Panama. As a foreigner, you do not need to be a resident of Panama either to incorporate or to be part of a company.”
Kathia Rivera Morales, president of Legal Solutions Panamá

The answer matches Law 32 of 1927, which allows two or more persons of any nationality, domiciled in the country or not, to incorporate a corporation for any lawful purpose. Radar Panamá sets out the full framework in its guide to setting up an offshore company in Panama.

No nationality limit

Any foreigner can be a shareholder, director or officer.

No prior residency

There is no need to live in Panama or hold an immigration permit to incorporate the company.

No travel

Directors and shareholders do not have to travel; the resident agent handles the registration.

One week

Approximate incorporation time with complete documentation, according to the firm.

Do you have to travel? How long does it take? Which documents?

“The answer is no: neither the directors nor the shareholders have to travel to have the company. Incorporation is taking approximately seven days.”
Kathia Rivera Morales

On documents, Rivera lists a short set: “valid passports of the directors, valid passports of the shareholders, a completed know-your-customer form and another form containing the key details needed for invoicing”. The know-your-customer form is the due diligence the law requires of the resident agent and, since 2020, it also feeds the beneficial ownership registry.

Requirement What the firm says Legal basis
Nationality and residency No limitations; no need to be a resident Law 32 of 1927
Physical presence Neither directors nor shareholders travel Public Registry practice with a power of attorney to the resident agent
Timeframe Approximately seven days Depends on the Public Registry’s workload
Documents Valid passports, know-your-customer form, invoicing details form Law 23 of 2015 (due diligence) and Law 129 of 2020 (beneficial owners)

What the resident agent is

“The resident agent of a company is a figure established by Panamanian law and corresponds to the lawyer or law firm that registers the articles of incorporation at the Public Registry of Panama. The resident agent is the link between the company’s shareholders and the government.”
Kathia Rivera Morales

That definition has become more demanding over the years: the resident agent is today responsible for registering the beneficial owner in the system of the Superintendency of Non-Financial Subjects and for keeping the accounting records the company must hand over each year.

What a company operating outside Panama pays

“We are talking about a company that generates its income outside the Republic of Panama: we would not have to pay taxes. Therefore, the only annual expense would be the resident agent’s annual fees and the flat annual fee or corporate tax.”
Kathia Rivera Morales
Key fact: the principle Rivera describes is the territoriality principle of article 694 of the Tax Code: only income produced inside Panama is taxed. The specific amounts of the flat fee and the resident agent’s fees mentioned in the video correspond to the recording date; the current flat annual fee for corporations is 300 dollars.

Share capital and bookkeeping

“The share capital is the contributions the partners make to incorporate the company. Panamanian law establishes a minimum share capital of ten thousand dollars; however, these ten thousand dollars are neither paid in nor deposited, which means we do not have to contribute them in order to incorporate the company.”
Kathia Rivera Morales
“Keeping accounts is not mandatory. However, as resident agents we do recommend that the accounts be kept within Panama, since it is a requirement of the Panamanian authorities. As for the company’s financial statements, they will need to be certified by a certified public accountant.”
Kathia Rivera Morales

What has changed since the recording

The video was recorded before the most recent transparency reforms, and Rivera’s recommendation on bookkeeping became an obligation: Law 254 of 2021 requires every Panamanian company, whether or not it operates in the country, to deliver its accounting records to the resident agent every 30 April, with fines of up to one million balboas for non-compliance. The beneficial ownership registry of Law 129 of 2020 was also consolidated. What has not changed is the core of her answers: no nationality restrictions, no travel, capital not paid in and territorial taxation.

Topic What the video says Current situation
Nationality, residency and travel No limits, no travel Unchanged
Share capital 10,000 dollars not paid in Unchanged
Foreign-source income Not taxed in Panama Unchanged (article 694 of the Tax Code)
Bookkeeping Recommended, not mandatory Mandatory: annual delivery to the resident agent (Law 254 of 2021)
Beneficial owner Know-your-customer form Mandatory registration with the Superintendency within 15 working days (Law 129 of 2020)
Flat annual fee Amount at the recording date 300 dollars

Anyone planning to operate inside the country, with premises, employees or local sales, also needs the Notice of Operation and the RUC taxpayer ID, a separate process explained in Radar Panamá’s guide to opening a company in Panama.

The full video

Need support to incorporate the company?
Legal Solutions Panamá, a law firm based in Panama City led by Kathia Rivera, with more than ten years of experience and clients from more than 55 nationalities, incorporates companies in around five working days and acts as resident agent.

See how to set up a company in Panama as a foreigner

Frequently asked questions

Can a non-resident foreigner set up a company in Panama?

Yes. According to Kathia Rivera, the law establishes no nationality limitations and does not require residency to incorporate or be part of a Panamanian company.

Do the directors or shareholders have to travel?

No. Neither directors nor shareholders have to travel; the resident agent handles the registration at the Public Registry.

How long does incorporation take?

Around seven days, according to the firm, with valid passports and the completed know-your-customer and invoicing forms.

What is the resident agent?

The Panamanian lawyer or firm that registers the articles of incorporation at the Public Registry and acts as the link between the shareholders and the State. Today it also registers the beneficial owner and keeps the accounting records.

Does the share capital have to be paid in?

No. The standard capital of 10,000 dollars is neither paid in nor deposited, Rivera explains; it is authorised capital.

Does a company operating outside Panama pay taxes?

It pays no income tax on its foreign-source income. Its annual expenses are the flat fee of 300 dollars and the resident agent’s fees.

Is bookkeeping mandatory?

Yes. Although the video describes it as advisable, Law 254 of 2021 requires the accounting records to be delivered to the resident agent every 30 April, with financial statements certified by a certified public accountant where applicable.

Which documents are needed to incorporate the company?

Valid passports of directors and shareholders, a know-your-customer form and a form with the invoicing details, as the firm lists them.

Sources

Radar answers

Ask about this article

Type your question and we will show you the answer inside this article or in other Radar Panamá publications.

Was this article useful?
By Deilys Romero

Deilys Romero is a writer at Radar Panamá. A business administrator with a specialisation in accounting, Venezuelan, 48, she covers the economy, companies, taxes and SME management with a practical approach. Based between Panama and Colombia, she closely follows the business activity of both countries.

No widgets found. Go to Widget page and add the widget in Offcanvas Sidebar Widget Area.