Pros and cons of setting up a company in Panama
Panama is one of the leading offshore jurisdictions, which in 2025 is showing significant positive changes in its international reputation. The country has successfully completed the reform process and has been removed from compliance risk registers, opening up new opportunities for international business.
Revolutionary changes in Panama's international status
2025 was a turning point for Panama in terms of international recognition. In October 2023, the country was removed from the FATF grey list, and in July 2025, the European Parliament approved Panama's removal from the EU's list of high-risk jurisdictions. These changes have dramatically improved the country's international reputation and opened up new opportunities for doing business.
Panama has successfully met all the requirements of international organisations, including strengthening anti-money laundering measures, improving beneficial ownership transparency and modernising financial regulation.
Key advantages of registering a company in Panama
Tax benefits
Panama applies a territorial taxation system, whereby companies that do not operate within the country are completely exempt from corporate income tax. Annual government fees are only $250 in the first year and $300 in subsequent years.
Cryptocurrency opportunities
Panama is actively developing regulations for cryptocurrency activities. In 2025, a new bill, No. 247, was introduced, which:
- Recognises Bitcoin, Ethereum and stablecoins as legal tender
- Allows crypto activities to be carried out without expensive licences
- Creates a favourable legal environment for fintech projects
In April 2025, Panama City officially allowed municipal services and taxes to be paid in cryptocurrency, demonstrating a progressive approach to digital assets.
Easy registration and management
The registration process takes approximately 5 business days and does not require personal attendance. The minimum requirements include:
- Shareholders — at least one (any nationality)
- Directors — minimum of three (Panama residents)
- Authorised capital — $10,000 recommended, payment not mandatory
- Nominee services — available and permitted by law
Confidentiality and data protection
Panama has established a ‘Private and Unified System for the Registration of Ultimate Beneficial Owners,’ which ensures:
- Confidentiality of beneficiary data
- Restricted access to information only for competent authorities
- No requirement to register shareholder names in a public registry
Economic advantages
Panama uses the US dollar as its official currency, which eliminates currency risks. The country is a regional financial centre with a developed banking system and a strategic location between two oceans.
Disadvantages and limitations
In addition to the obvious advantages, there are nuances and peculiarities rather than disadvantages.
Banking difficulties
Despite being excluded from international lists, some banks may still apply increased requirements to Panamanian companies. The process of opening bank accounts may take longer compared to other jurisdictions.
Language barrier
The main language of business is Spanish, and all official documents are issued in Spanish, which can create additional difficulties for foreign entrepreneurs.
Mandatory nominee services
The requirement to have three directors who are residents of Panama makes nominee services mandatory, which increases the cost of maintaining the company.
Reporting and taxation
Companies operating exclusively outside Panama:
- Exempt from filing tax returns
- Not required to conduct mandatory audits
- Pay only an annual government fee of $300
Cryptocurrency opportunities in 2025
Panama demonstrates a progressive approach to cryptocurrency regulation.
Permitted types of crypto activities:
- Cryptocurrency exchange
- P2P transfers between wallets
- Private key storage services
- Token issuance and placement
- NFT marketplaces
Supported cryptocurrencies:
The use of crypto assets is supported by agreement between the parties, including Bitcoin, Ethereum, and stablecoins; other liquid assets (e.g., XRP, Litecoin, Stellar, Algorand, XDC, etc.) may also be used.
For more details and to find out if the jurisdiction is suitable for your needs, please contact an Intelligent Solution Group manager for a free consultation.
