Panama economic substance requirements in 2024

In January 2019, the Panama government passed new Economic Substance Requirements (ESRs) for companies registered in the country. However, the government has yet to enforce the rules on local companies, and in February 2020 the country was added to the European Union’s non-cooperative jurisdictions list.

• ESR rules

  • From January 2019, tax-resident Panama LLCs must supply to the government evidence they have a physical office, staff and active directors in Panama;
  • Non-resident Panama LLCs must also annually supply the government evidence the entity is tax-resident overseas including i) foreign tax registration numbers and ii) foreign tax returns;
  • ESRs apply to Panama LLCs that are i) holding companies ii) conduct banking activities iii) distribution and service centres iv) finance and leasing companies v) fund management firms vi) headquarters vii) insurance providers viii) intellectual property holdings and ix) shipping businesses.

• Problems and solutions

  Healy Consultants Group will help multi-national Clients as follows:

  New legal requirement	Simple, practical low-cost solution
  Panama companies engaged in i) income-generating activities in Panama ii) which rent physical office space in Panama iii) hire staff in Panama and iv) have active directors in Panama.	Healy Consultants Group will assist you to: Locate a small shared physical office space in Panama City for a one-time fee of US$950. Rental fees are then paid by our Clients directly to the landlord. Recruit a local, low-salary admin employee for a one-time fee of US$4,950. Secure your local visa for a one-time fee of US$4,950.
  In February 2020 Panama was added to the European Union’s non-cooperative jurisdictions for its failure to enforce ESRs on local companies. As a result, in 2020 and 2021 i) there is a 50% probability that Panama will continue to be blacklisted by the EU or other western governments and ii) it will become even more challenging to secure and maintain multicurrency corporate bank account numbers for Seychelles LLCs.	We help our Client re-domicile to Panama entity to alternative reputable zero tax jurisdictions, including Singapore or Delaware.

• Conclusion

  • As a short-term solution, engage Healy Consultants Group to register your Panama company for tax, and complete its international accounting and tax filing obligations.
  • As a long term solution, engage Healy Consultants Group to re-domicile your Panama company or register a new company in a reputable zero tax country.