Limited Partnership (Sociedad en Comandita Simple) in Panama

Limited Partnership · Formation from $350

Last verified: June 13, 2026

Corporate Tax

25.0%

State Tax

0.0%

Formation Cost

$350

Annual Fee

$300

Comparison Scores

Privacy, remote setup, banking, and tax efficiency

Privacy7/10

Remote Setup8/10

Banking6/10

Tax Efficiency9/10

Overall Score7/10

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

Investors who want to provide capital (as limited partners) without being involved in management or assuming unlimited liability.
Professional service firms or family businesses where one party manages the operations and others provide funding.
Entrepreneurs seeking to leverage Panama's territorial tax system for offshore activities.
Joint ventures where the roles of the managing partner and silent investors are strictly separated.

Who Should Avoid This?

Scenarios where another structure may be better

Founders who want limited liability for all owners (they should choose a Sociedad Anónima or S. de R.L. instead).
Startups seeking venture capital, as investors typically prefer standard corporations (S.A.) or LLCs.
Solo entrepreneurs, as this structure requires at least two partners (one general, one limited).

Advantages

+Territorial tax system: Foreign-sourced income is 100% tax-exempt.
+Clear distinction of liability: Limited partners are only liable up to their capital contribution.
+No minimum capital requirement for formation.
+High privacy for limited partners, as they are not involved in daily management.
+Flexible profit distribution among partners as defined in the partnership agreement.

Disadvantages

-General partners have unlimited, joint, and several liability for the partnership's debts.
-Less common and less understood internationally compared to the Panamanian Corporation (Sociedad Anónima) or LLC (S. de R.L.).
-Limited partners cannot participate in the management of the company without risking their limited liability status.
-Subject to the annual franchise tax (Tasa Única) of $300, just like corporations.
-Requires a formal public deed and registration at the Public Registry, which involves notary and legal fees.

Formation Steps

Choose and verify the availability of the partnership name at the Public Registry of Panama.

Draft the Partnership Agreement (Pacto Social) detailing the general and limited partners, capital contributions, and management rules.

Notarize the Partnership Agreement before a Panamanian Notary Public to create a Public Deed (Escritura Pública).

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

Obtain a Tax Identification Number (RUC) from the Directorate General of Revenue (DGI).

Apply for a Notice of Operation (Aviso de Operación) through the PanamaEmprende portal if conducting commercial activities locally.

Cost Breakdown

Detailed breakdown of formation and ongoing costs

Item	Type	Amount
State filing fee (Public Registry)	One-time	$90
Notary fees for Public Deed	One-time	$150
Initial Annual Franchise Tax (Tasa Única)	Annual	$300
Resident Agent Fee	Annual	$350
Legal/Professional formation fees	One-time	$500
First year total		$1,390
Annual ongoing		$650

Real-World Examples

Typical use cases for this entity type

A real estate investment group where a local Panamanian developer acts as the general partner managing the project, while foreign investors act as limited partners providing capital.
An international trading business structured to keep foreign-sourced profits tax-exempt, with a managing partner handling logistics and silent partners funding the inventory.
A family wealth management vehicle where the parents act as general partners to maintain control, and children are limited partners receiving economic benefits.

Common Mistakes

Pitfalls to avoid during setup and operations

Limited partners getting involved in daily management, inadvertently exposing themselves to unlimited liability.
Forgetting to pay the $300 Annual Franchise Tax (Tasa Única), leading to late fees and suspension of corporate rights.
Choosing this structure when a standard LLC (S. de R.L.) or Corporation (S.A.) would provide better overall liability protection.
Failing to clearly define profit-sharing and management responsibilities in the Partnership Agreement.
Assuming that local Panamanian income is tax-free (only foreign-sourced income is exempt).

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

Partnership Limited by Shares

Tax: 25.0%
Formation: $60

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
🇵🇦 Limited Partnership (Sociedad en Comandita Simple)(Limited Partnership)	25.0%	$350	$300

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

FAQ

What is a Sociedad en Comandita Simple in Panama?

It is a simple limited partnership consisting of general partners with unlimited liability who manage the business, and limited partners whose liability is restricted to their capital contributions.

Is there a minimum capital requirement?

No, Panama does not impose a minimum capital requirement for a Sociedad en Comandita Simple.

Are foreign earnings taxed?

No, Panama uses a territorial tax system. Income generated outside of Panama is completely tax-exempt.

Do I need to pay an annual fee?

Yes, all registered partnerships and corporations in Panama must pay an Annual Franchise Tax (Tasa Única) of $300.

Can limited partners manage the company?

No, if a limited partner participates in management, they may lose their limited liability protection and be treated as a general partner.

Can foreigners form this type of partnership?

Yes, foreigners can be both general and limited partners, and there are no residency requirements for partners.

How long does it take to register?

Once the documents are prepared and notarized, registration at the Public Registry typically takes 3 to 5 business days.

Do I need a registered agent?

Yes, Panamanian law requires all registered legal entities to have a resident agent (a Panamanian lawyer or law firm).

Detailed Tax Rates

Corporate Income Tax

From	To	Rate

The standard corporate income tax rate is a flat 25%. However, companies with gross taxable income exceeding $1.5 million are subject to the Alternative Calculation of Income Tax (CAIR), paying the greater of 25% on net income or 4.67% on gross taxable income.

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 applies a strict territorial tax system, meaning only income sourced within Panama is taxed. Foreign-sourced income is completely exempt from personal income tax, regardless of residency status.

Capital Gains Tax

10.0%

Capital gains are generally taxed at a flat rate of 10%. For real estate transfers, a 3% advance tax on the gross sales value or cadastral value (whichever is higher) is required, which can be treated as the final definitive tax.

VAT / GST

7.0%

Registration Threshold: USD36,000

Foreign providers of digital services are generally required to register and collect the 7% ITBMS if their services are consumed in Panama. Non-resident businesses without a permanent establishment may face reverse-charge mechanisms for B2B sales.

Withholding Tax

Dividends10.0%

Royalties12.5%

Interest12.5%

Dividends from domestic profits are subject to a 10% withholding tax, while those from foreign-source or export profits are taxed at 5%. Royalties and interest paid to non-residents are subject to an effective withholding rate of 12.5%, as 50% of the remitted amount is taxed at the 25% corporate rate.

Payroll & Social Security

Employer14.8%

Employee11.0%

Employers contribute 13.25% to social security (increasing to 14.25% in 2027) and 1.5% for educational tax. Employees contribute 9.75% to social security and 1.25% for educational tax, with no cap on the taxable salary amount.

Other Taxes

Annual Franchise Tax (Tasa Única)

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

Notice of Operation Tax (Aviso de Operación)

An annual tax of 2% levied 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

Territorial Tax System

Panama only taxes income generated within its borders. Foreign-sourced income is 100% tax-exempt.

0% corporate and personal income tax on all foreign-sourced revenue.

Eligibility: All Panamanian entities, including Limited Partnerships, conducting offshore business activities.

Special Economic Zones (e.g., Panama Pacifico)

Designated zones offering comprehensive tax, labor, and immigration benefits for companies setting up physical operations.

Exemptions from corporate income tax, import duties, and dividend taxes, plus expedited visa processing for foreign workers.

Eligibility: Companies engaging in specific activities such as logistics, high-tech manufacturing, or shared corporate services.

Formation Requirements

Minimum Capital

No requirement

Panama does not impose any minimum capital requirement for a Sociedad en Comandita Simple (Limited Partnership).

Local Director

Not Required

A local director is not required, but the partnership must appoint a Resident Agent (a Panamanian lawyer or law firm).

Registered Office

Required

Virtual office allowed. $300-500/year

Notarization Required

Yes

Power of Attorney (Remote)

Required

Must be apostilled or authenticated by a Panamanian consulate if signed abroad to allow the Resident Agent to form the entity remotely.

Timeline

Standard: 3-5 business days days

Expedited: 1-2 business days days ($250)

Required Documents

1Passport copy of all partnersApostille needed
2Proof of residential address (e.g., recent utility bill)
3Bank or professional reference letter
4Partnership Agreement (Pacto Social)Apostille needed
5Curriculum Vitae (CV) or background check of partners

Compliance & Reporting

Annual Filings

Annual Franchise Tax (Tasa Única)

Penalty: $50 late fee for the first missed deadline, followed by a $300 penalty for each subsequent missed period, and suspension of corporate rights.

July 15 (if formed Jan-Jun) or January 15 (if formed Jul-Dec)

Corporate Income Tax Return (Declaración Jurada de Rentas)

Penalty: $500 fine for late filing, plus interest and surcharges on any unpaid tax.

March 31

Accounting Records Declaration

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

April 30

Audit Requirement

Not Required

Audits are generally not required unless the partnership operates in a regulated sector (e.g., finance, insurance) or meets specific high-revenue thresholds requiring CAIR tax calculations.

Accounting Standard

IFRS or Panamanian GAAP

Tax Return Deadline

March 31 (can be extended to April 30 upon request)

VAT Filing Frequency

Monthly (by the 15th) for standard businesses; quarterly for professional services.

Data Protection

Regulated by Law No. 81 of 2019 on Personal Data Protection, requiring explicit consent for data processing, strict confidentiality, and proper data storage protocols.

Banking & Payments

Towerbank

A crypto-friendly traditional bank in Panama that understands blockchain and e-commerce businesses.

Banco General

The largest bank in Panama, offering comprehensive corporate banking services but requires an in-person visit.

Credicorp Bank

Known for being friendly to e-commerce and international trading companies.

Payoneer

Remote-friendly

A global fintech platform that supports Panamanian entities for receiving international B2B payments.

MultiPass

Remote-friendly

A UK-based EMI that provides multi-currency accounts for offshore entities, including Panama.

Payment Gateways

2Checkout, PayPal, PagueloFacil, Zota

Currency

USD

Multi-Currency: Supported

Account Opening

Opening a local corporate bank account in Panama as a non-resident can be rigorous, typically requiring extensive KYC, proof of economic ties, and an in-person visit. However, using international fintechs or specialized offshore banks can streamline the process for remote founders.

Practical Information

Timezone

UTC-5

Business Language

Spanish, English

Legal System

Civil law

Ease of Doing Business

#86

IP Protection

Panama offers robust intellectual property protection, governed by the Directorate General of the Industrial Property Registry (DIGERPI). It is a member of WIPO and a signatory to the Paris Convention, ensuring international standards for trademarks, patents, and copyrights.

Double Tax Treaties

17 countries

Notable treaties: United Kingdom, Spain, Singapore, Mexico, France, Italy

Visa & Residency Options

Qualified Investor Visa (Golden Visa)

Grants permanent residency in about 30 days for a minimum real estate investment of $300,000 (scheduled to increase to $500,000 in October 2026) or a $750,000 bank deposit.

Friendly Nations Visa

Available to citizens of specific countries, offering a 2-year provisional residency (leading to permanent) for a $200,000 real estate investment or fixed-term deposit.