Contact us
Contact us
Panama

Panama Corporations and Foundations for IT, Web3 and Crypto Projects

Panama remains one of the classic offshore jurisdictions for technological startups, founders and funds seeking a stable, dollar-based hub outside the United States. A Panama corporation or private foundation combines territorial taxation with founders’ confidentiality. For crypto and Web3, Panama is still one of the few serious financial centers without a full VASP or MiCA style regime in force.

Book Free Consultation

Why Panama?

Panama sits in a unique position for international founders and funds:

Territorial tax regime

Only Panama source income is taxed. Foreign business, portfolio income and crypto trading that is structured correctly can be fully outside the Panamanian tax net.

U.S. dollars, U.S. influence

Panama uses the U.S. dollar and grew under a very strong United States influence because of the Canal Zone. Legal culture mixes civil law with heavy common law and U.S. commercial practice, which feels familiar to U.S. and international investors.

Light but serious regulation

There is no dedicated digital asset or VASP statute in force. The first crypto law (Bill 697) was declared unconstitutional in 2023 and as of November 2025 the current virtual asset draft is still only a bill.

Anonymity with substance tools

Shareholder names do not appear in the Public Registry. Only directors and the resident agent are public. Ultimate beneficial owners are recorded in a private state register and with the law firm, not in an open database.

Mature offshore industry

Panama has used Law 32 of 1927 to form corporations for almost 100 years. Banks, lawyers and corporate service providers know how to handle non resident structures efficiently.

Panama Corporations, Foundations and Panama “loop”

A Panama corporate set up is usually based on either a Panama Corporation (S. A.) or a Private Interest Foundation, depending on assets are to be held and managed.

Table of contents
  • Panama Corporation
  • Private Interest Foundation
  • Panama loop
1.

Panama Corporation

A Panama Corporation is the standard vehicle for operating or holding. It has at least 3 directors, 1 shareholder and no minimum capital requirement. Shareholders stay private because they do not appear in public records. Directors and the resident agent do. A corporation is easy to combine with entities in Delaware, BVI, Cayman, Estonia or the UK. It can hold equity, tokens, bank accounts and intellectual property, and works well as a central holding or treasury entity.

2.

Private Interest Foundation

A Private Interest Foundation operates without shareholders and is controlled through a council and a protector instead of directors and shareholders. It can hold tokens, equity, wallets, bank accounts and long term assets. It is often used for DAO treasuries, token reserves, carry or family holdings. It gives clearer asset separation because it has no owners, only beneficiaries.

3.

Panama loop

The Panama loop is the way these two legal forms of entities can sit inside an international group, thus creating centralised control and using Panama’s flexible legal environment. Such a loop is often used for token treasuries, protocol ownership, international holding structures and long term asset protection. It gives founders a stable legal base that can legitimately interact with exchanges, banks and counterparties, while keeping governance centralised and private.

Taxes and compliance

Table of contents
  • Territorial Tax System
  • Corporate Tax and Franchise Tax
  • Dividend Withholding Rules
  • VAT and Crypto Transactions
  • Accounting, AML and Beneficial Ownership
  • Ongoing Annual Obligations
1.

Territorial Tax System

Panama uses a territorial tax system. Only income sourced in Panama is taxed. A foundation or corporation that operates purely as a foreign holding vehicle and does not generate Panama sourced income is generally not subject to Panama income tax.

2.

Corporate Tax and Franchise Tax

A corporation with Panama source income pays 25% corporate tax. A corporation used only for foreign investment or asset holding usually pays only the fixed annual franchise tax of $300.

3.

Dividend Withholding Rules

Dividend withholding applies only when the entity earns Panama sourced income or has a Notice of Operation. Distributions from foreign sourced income can often be made with no Panama dividend tax if the structure is set up as a pure offshore entity.

4.

VAT and Crypto Transactions

There is no VAT on foreign services. Crypto transactions that are treated as foreign are not subject to VAT.

5.

Accounting, AML and Beneficial Ownership

Foundations and corporations must maintain basic accounting records, keep internal registers, maintain a resident agent and follow AML rules. Beneficial owners must be recorded privately with the resident agent, even though they do not appear in public filings. Crypto or financial businesses that deal with client funds may fall under specialised financial institution rules and need more compliance.

6.

Ongoing Annual Obligations

For standard holding, treasury or protocol structures, annual obligations are minimal: pay the $300 franchise tax, maintain the resident agent, update internal documents and follow AML requirements when relevant.

Let’s Build Your Global Legal Foundation

Get in Touch

*Required Fields
Enter your name in English (no spaces)
Enter your last name in English (no spaces)
Enter your email address
Enter at least 100 characters

FAQ

Is Panama really “the last unregulated crypto jurisdiction”?

No. Panama is still one of the few serious financial centers without a dedicated crypto or VASP law in force, but it is not a legal vacuum. Existing financial, AML and tax rules already apply, and a detailed VASP bill is actively in discussion.

Can a Panama company hold and trade crypto without a licence?

A pure holding company that trades its own assets and does not serve third party clients usually does not fall under licensing. The moment you start operating an exchange, custodian or payment service, you move into the specialised financial institution and future VASP space and should expect licensing and AML supervision.

How long does it take to form a Panama company or foundation?

Incorporation can be completed in a few weeks once KYC is cleared. Bank accounts usually take longer and require clean documentation, clear economic purpose and a straightforward ownership structure.

Is ownership really anonymous in Panama?

There is strong practical privacy. Shareholders are not shown in the public registry, and bearer shares are immobilised. However, beneficial owners must be disclosed to the resident agent and a secure government register. This information can be accessed by authorities and foreign tax agencies under information exchange agreements, so Panama is not a secrecy black hole.

Can US citizens safely use a Panama structure?

Yes, but the United States taxes on worldwide income and applies CFC and GILTI rules. A Panama company or foundation is usually useful for business and banking reasons, not to avoid U.S. tax. Proper U.S. tax advice is required.

Does Panama have a long-standing corporate law framework?

Yes. Panama corporations are formed under Law 32 of 1927, which has been used for nearly 100 years. This long history supports a mature offshore ecosystem with experienced banks, lawyers and corporate service providers.

Does Panama comply with international AML standards?

Yes. Panama applies AML rules to corporations and foundations, requires beneficial owner disclosure to the resident agent and maintains a private state register accessible to authorities under information exchange agreements.

Can Panama structures interact with banks and exchanges?

Yes. When properly structured and documented, Panama entities can legitimately interact with international banks, exchanges and counterparties, particularly when used for holding, treasury or protocol ownership purposes.

Is Panama suitable for long-term asset protection?

Yes. The combination of foundations, corporations and the Panama loop structure is often used for long-term asset holding, protocol ownership and centralised governance with privacy and legal stability.