Company or foundation in Panama: S.A. vs private interest foundation
Foreigners often ask whether to set up a sociedad anónima (S.A.) or a private interest foundation in Panama. Here is a plain-language comparison of how each is built, written November 4, 2026.
The sociedad anónima (S.A.)
The S.A. is Panama's standard business company, governed by Law 32 of 1927. A Panama law-firm guide (HCO) summarizes the basics: at least three directors, which can be individuals or companies of any nationality and do not have to live in Panama, and at least one shareholder. It also says no minimum capital must be deposited at incorporation. The company is created by a public deed (pacto social) before a Panamanian notary and recorded in the Mercantile Section of the Registro Público, which gives it legal personality.
Every Panamanian company must name a resident agent, a Panama lawyer or law firm, who files the incorporation and handles the beneficial-owner information that Panama requires. The same guide mentions an annual franchise tax (tasa única) of US$300; confirm the current amount with your lawyer.
The private interest foundation
The private interest foundation (fundación de interés privado) is created under Law 25 of 1995. Instead of shareholders it has a founder, a council and beneficiaries. The law sets out several points directly:
Founding assets
Article 5 requires founding assets of at least B/.10,000 (the balboa equals the US dollar).
A council of at least three
Articles 17 and 18 require a foundation council, with no fewer than three members unless the single member is a legal entity.
A resident agent who is a lawyer
The charter must name a resident agent in Panama, who must be a lawyer or law firm.
Charter and registration
The charter states the name (it must include the word “fundación”), purposes, beneficiaries and duration, and is notarized and recorded in the Registro Público, which gives the foundation legal personality (Articles 5, 6 and 9).
Optional protector
The charter may add a protector or other oversight body whose authorization the council needs (Articles 19 and 24).
How they differ in everyday terms
An S.A. is usually the vehicle for running a business, signing contracts and holding assets with shareholders. A foundation is usually considered for holding assets for named beneficiaries, for example in family or estate planning. Which one fits depends on your goals, your home country’s rules and tax treatment, and the banks that will work with you. That is a decision for a Panama attorney and your tax adviser, not for a general article.
Practical tips
- Write down the purpose first. Operating business, property holding, or asset planning each point to different structures.
- Plan for banking early. Banks ask who the real owners are and where the money comes from; see opening a bank account in Panama.
- Expect due-diligence papers for owners, directors and beneficial owners, such as a passport copy, proof of address and a source-of-funds statement.
- Ask for a written quote. Formation fees, agent fees and annual costs vary by firm.
- Check your home-country obligations before you form anything abroad.
Where we fit in
Talk it through first
A free first call helps you organize your goals and questions before you speak with a lawyer. Forming a company or foundation is quoted case by case; we are not a law firm, and a licensed Panama attorney files the paperwork.
This article is general information, not legal, tax or investment advice. Requirements, fees and processes change, so confirm current details with the relevant authority (Registro Público) and a licensed Panama attorney before you act. Sources: Ley 25 de 1995, Fundaciones de Interés Privado (Organo Judicial); HCO, how to open a business in Panama.