Partnership Limited by Shares in Panama

Partnership Limited by Shares · Formation from $60

Last verified: June 13, 2026

Corporate Tax

25.0%

State Tax

0.0%

Formation Cost

$60

Annual Fee

$300

Comparison Scores

Privacy, remote setup, banking, and tax efficiency

Privacy7/10

Remote Setup8/10

Banking5/10

Tax Efficiency9/10

Overall Score6/10

Calculate full formation cost

Break down one-time filing fees and recurring costs for any supported entity type.

Who Should Choose This?

Profiles that typically benefit from this entity

Founders who want to retain absolute management control while raising capital from passive investors.
Family offices or estate planning structures where the older generation manages the assets (general partners) and the younger generation holds economic rights (limited partners).
Joint ventures requiring a clear legal distinction between managing partners and capital contributors.
Investors operating entirely outside of Panama who want to leverage the territorial tax system with a specific share-based partnership structure.

Who Should Avoid This?

Scenarios where another structure may be better

Standard e-commerce, tech startups, or small businesses (a Sociedad Anónima or S.R.L. is much better suited).
Founders who are unwilling to accept unlimited personal liability for business debts.
Businesses that require simple, universally understood corporate structures for easy banking and fundraising.

Advantages

+Capital is divided into shares, making it easier to transfer ownership compared to a standard limited partnership.
+Clear separation of management (general partners) and passive investors (limited partners).
+Limited partners enjoy limited liability, protecting their personal assets from business debts.
+Benefits from Panama's territorial tax system (0% tax on foreign-sourced income).
+High level of privacy for limited partners, as their details are not always publicly exposed in the same way as general partners.
+Can be used effectively for family offices, joint ventures, or specific investment funds where founders want to retain full control while issuing shares to investors.

Disadvantages

-General partners have unlimited, joint, and several liability for the company's debts and obligations.
-More complex to set up and maintain than a standard Corporation (Sociedad Anónima) or LLC (S.R.L.).
-Rarely used in Panama (over 90% of entities are S.A.), which may lead to unfamiliarity among local banks and service providers.
-Requires at least one general partner to take on unlimited liability, which is a significant risk.
-Strict rules regarding the company name, which must include the specific suffix (S.C.A. or S.Com. p.A.).

Formation Steps

Choose a company name including the suffix 'Sociedad en Comandita por Acciones' or 'S.C.A.' and verify availability in the Public Registry.

Draft the Articles of Incorporation (Pacto Social), specifying the general partners, limited partners, and share capital structure.

Notarize the Articles of Incorporation before a Panamanian Notary Public.

Appoint a Resident Agent (a Panamanian lawyer or law firm), which is legally required for all entities.

Pay the initial Annual Franchise Tax (Tasa Única) of $300 to activate the entity.

Obtain a Notice of Operation (Aviso de Operación) if the company will conduct commercial activities within Panama.

Cost Breakdown

Detailed breakdown of formation and ongoing costs

Item	Type	Amount
State filing fee	One-time	$60
Notary fees	One-time	$75
Resident Agent fee	Annual	$300
Annual Franchise Tax (Tasa Única)	Annual	$300
Legal/Professional formation fees	One-time	$500
First year total		$1,235
Annual ongoing		$600

Real-World Examples

Typical use cases for this entity type

A family-owned real estate holding company where the parents act as general partners to maintain control, while children hold shares as limited partners.
A specialized investment fund where the fund manager acts as the general partner with unlimited liability, and investors buy shares as limited partners.
An international joint venture where one company provides the operational expertise (general partner) and the other provides the capital (limited partner).

Common Mistakes

Pitfalls to avoid during setup and operations

Assuming limited partners can participate in management without losing their limited liability protection.
Choosing this structure without realizing that general partners face unlimited personal liability.
Failing to pay the $300 Annual Franchise Tax, leading to the suspension of corporate rights.
Expecting local banks to easily understand the structure, as it is much less common than the standard S.A.
Not properly drafting the Articles of Incorporation to clearly define the rights and restrictions of the different classes of partners.

Other entity types

Other formation options in Panama

Corporation (Sociedad Anónima)

Primary

Tax: 25.0%
Formation: $300

Sociedad de Responsabilidad Limitada (SRL)

Tax: 25.0%
Formation: $250

Individual Limited Liability Company (EIRL)

Tax: 25.0%
Formation: $360

Private Interest Foundation

Tax: 25.0%
Formation: $350

Branch of a Foreign Company

Tax: 25.0%
Formation: $250

Limited Partnership (Sociedad en Comandita Simple)

Tax: 25.0%
Formation: $350

General Partnership (Sociedad Colectiva)

Tax: 25.0%
Formation: $350

Civil Partnership (Sociedad Civil)

Tax: 25.0%
Formation: $50

Compare with Other Countries

Country / Type	Tax	Formation	Annual
🇵🇦 Partnership Limited by Shares(Partnership Limited by Shares)	25.0%	$60	$300

🇵🇦 vs 🇺🇸 United States 🇵🇦 vs 🇪🇪 Estonia 🇵🇦 vs 🇬🇧 United Kingdom 🇵🇦 vs 🇮🇪 Ireland All comparisons →

FAQ

What is a Sociedad en Comandita por Acciones?

It is a hybrid entity where capital is divided into shares, with general partners managing and having unlimited liability, and limited partners having limited liability.

Do I need to visit Panama to form this entity?

No, it can be formed entirely remotely through a resident agent using a Power of Attorney.

What is the minimum capital requirement?

There is no strict minimum capital requirement under Panamanian law, but standard authorized capital is usually set at $10,000.

How is this entity taxed in Panama?

It is subject to Panama's territorial tax system; foreign-sourced income is tax-exempt, while local income is taxed at 25%.

Who manages the company?

Only the general partners (comanditados) can manage the company; limited partners cannot participate in management.

What is the Annual Franchise Tax?

All registered entities in Panama must pay a $300 annual fee, known as Tasa Única, to remain in good standing.

Can foreigners be partners in this entity?

Yes, there are no nationality or residency restrictions for either general or limited partners.

Why choose this over a standard Corporation (S.A.)?

It is typically chosen for specific structural needs, such as when founders want absolute management control while raising capital from passive shareholders.

Detailed Tax Rates

Corporate Income Tax

From	To	Rate

Panama applies a territorial tax system, meaning only income generated within Panama is taxed at a flat rate of 25%. Companies with taxable income over $1.5 million must pay the greater of 25% on net income or 4.67% on gross taxable income (CAIR).

Personal Income Tax (Top rate: 25.0%)

From	To	Rate
$0	$11,000	0.0%
$11,000	$50,000	15.0%
$50,000	No limit	25.0%

Panama taxes individuals only on Panama-sourced income. Foreign-sourced income, including foreign investments and pensions, is completely exempt from personal income tax.

Capital Gains Tax

10.0%

Capital gains from the sale of securities and real estate are generally taxed at 10%. For real estate, a 3% advance tax on the gross sale value is withheld, which can be treated as the final tax or credited against the 10% tax on the actual gain.

VAT / GST

7.0%

Registration Threshold: USD36,000

Non-resident providers of digital services without a permanent establishment in Panama are generally not required to register for ITBMS. However, B2B transactions may be subject to a reverse charge mechanism.

Withholding Tax

Dividends10.0%

Royalties12.5%

Interest12.5%

Dividends are taxed at 10% if paid from domestic profits, but only 5% if paid from foreign-source or export profits (20% for bearer shares). Royalties and interest face an effective 12.5% rate (25% tax applied to 50% of the remitted amount).

Payroll & Social Security

Employer14.8%

Employee11.0%

Employers contribute 13.25% to social security and 1.5% to the educational tax (total 14.75%). Employees contribute 9.75% to social security and 1.25% to the educational tax (total 11%). The employer social security rate is scheduled to increase to 14.25% in March 2027.

Other Taxes

Annual Franchise Tax (Tasa Única)

All registered corporate entities and partnerships in Panama must pay a flat annual franchise tax of $300 to maintain their good standing.

Notice of Operation Tax (Aviso de Operación)

An annual tax of 2% on the company's net worth, with a minimum payment of $100 and a maximum of $60,000, applicable to commercial and industrial activities.

Incentives & Support

EMMA Regime (Manufacturing Services)

Special regime for multinational companies providing manufacturing, assembly, or maintenance services to their corporate group.

5% reduced corporate income tax rate, exemption from dividend tax, and import tax exemptions.

Eligibility: Must be part of a multinational group and provide manufacturing-related services exclusively to related parties.

SEM Regime (Multinational Headquarters)

Incentive program for multinational companies establishing their regional headquarters in Panama.

5% corporate tax rate, 0% dividend tax, and special visa categories for foreign executives.

Eligibility: Must have consolidated group assets of at least $200 million or provide services to at least 7 affiliates.

Formation Requirements

Minimum Capital

No requirement

There is no strict minimum capital requirement under Panamanian law, but standard authorized capital is usually set at $10,000.

Local Director

Not Required

Foreigners can act as general partners (who manage the company). A local resident agent (lawyer or law firm) is legally required.

Registered Office

Required

Virtual office allowed. $300-$500/year (often bundled with Resident Agent fees)

Notarization Required

Yes

Power of Attorney (Remote)

Required

A notarized and apostilled Power of Attorney is required for the resident agent to form the company on your behalf without you visiting Panama.

Timeline

Standard: 3-5 business days days

Expedited: 1-2 business days days ($150)

Required Documents

1Passport copy of all partnersApostille needed
2Proof of address (utility bill or bank statement)
3Bank reference letter
4Articles of Incorporation (Pacto Social)Apostille needed
5Power of Attorney (for remote formation)Apostille needed

Compliance & Reporting

Annual Filings

Annual Franchise Tax (Tasa Única)

Penalty: $50 late fee plus 20% surcharge, and suspension of corporate rights if unpaid.

January 15 or July 15 (depending on incorporation date)

Corporate Income Tax Return (Declaración Jurada de Rentas)

Penalty: Fines ranging from $100 to $1,000 for late filing, plus interest on unpaid taxes.

March 31

Accounting Records Submission

Penalty: Fines from $1,000 to $5,000 and suspension of the entity in the Public Registry.

April 30

Audit Requirement

Not Required

Not generally required for offshore entities, but companies operating locally with capital over $100,000 or annual sales over $50,000 must have CPA-signed financial statements.

Accounting Standard

IFRS or Panamanian GAAP

Tax Return Deadline

March 31 for companies with a standard calendar fiscal year.

VAT Filing Frequency

Monthly (by the 15th) or quarterly for certain professional services

Data Protection

Governed by Law 81 of 2019, which requires explicit consent for data processing and establishes strict rules for cross-border data transfers.

Banking & Payments

Banco General

Panama's largest bank, offering robust corporate banking services but requires significant local substance and an in-person visit.

Towerbank

A traditional Panamanian bank known for being crypto-friendly and open to international business structures.

Banistmo

A major local bank providing comprehensive corporate accounts, though onboarding for non-residents is strict.

Payoneer

Remote-friendly

A popular digital alternative for Panamanian offshore entities to receive international B2B payments in USD.

Payment Gateways

PagueloFacil, PayPal, 2Checkout, PayU

Currency

USD

Multi-Currency: Supported

Account Opening

Opening a local bank account in Panama for a Sociedad en Comandita por Acciones can be challenging and time-consuming for non-residents. Banks require extensive KYC, proof of economic ties to Panama, and often an in-person visit, though some allow remote opening through legal representatives.

Practical Information

Timezone

UTC-5

Business Language

Spanish (official), English (widely used in international business)

Legal System

Civil law

Ease of Doing Business

#86

IP Protection

Panama offers robust IP protection under Law 35 of 1996 and Law 61 of 2012. Trademarks, patents, and copyrights can be registered with the Directorate General of the Industrial Property Registry (DIGERPI).

Double Tax Treaties

17 countries

Notable treaties: United Kingdom, Spain, France, Italy, Mexico, United Arab Emirates

Visa & Residency Options

Friendly Nations Visa

Allows citizens of 50+ friendly nations to obtain residency by investing $200,000 in real estate, depositing $200,000 in a fixed-term bank account, or being employed by a Panamanian company.

Qualified Investor Visa

Grants permanent residency within 30 days for a minimum investment of $300,000 in real estate or $500,000 in the stock market.