Limited Partnership (Sociedad en Comandita Simple) in Panama — Holding Company Formation Guide
Choose jurisdictions with extensive double taxation treaty networks, participation exemptions for dividends, and zero or low capital gains tax on the sale of shares.
Last verified: June 13, 2026
Corporate Tax
25.0%
State Tax
0.0%
Formation Cost
$350
Annual Fee
$300
Forming a Limited Partnership (Sociedad en Comandita Simple) in Panama as a Holding Company means a total tax burden of 25.0% and an official formation cost of $350. There is no minimum capital requirement. Standard formation takes 3-5 business days, or 1-2 business days expedited. No local director is required; the process can be managed remotely. This guide covers the steps, tax breakdown, banking options, and compliance requirements — all from verified data.
First-year total cost
≈ $1,390
Ongoing (per year)
≈ $650
Why Limited Partnership (Sociedad en Comandita Simple) for Holding Company?
A holding company is a parent entity that owns enough voting stock in another company to control its policies and management. It exists primarily to hold assets, intellectual property, or investments rather than producing goods or services itself.
Ideal for
- Serial entrepreneurs
- Families managing generational wealth
- Corporate groups with multiple subsidiaries
- Investors holding diverse asset portfolios (real estate, IP, stocks)
Challenges to watch
- Complex regulatory compliance
- Strict economic substance requirements
- Transfer pricing rules and documentation
- Higher setup and annual maintenance costs
Key decision criteria
- Participation exemption rules for tax-free dividends
- Withholding tax rates on dividends and royalties
- Controlled Foreign Corporation (CFC) rules
- Local economic substance regulations
Limited Partnership (Sociedad en Comandita Simple) formation requirements
Minimum capital
None
Standard timeline
3-5 business days
Expedited timeline
1-2 business days
Local director
Not required
Registered office
Virtual office allowed
Notarization
Required
A local director is not required, but the partnership must appoint a Resident Agent (a Panamanian lawyer or law firm).
Estimated breakdown (based on avg. $1,000,000 revenue)
Simulate with your own revenue →
VAT / Sales Tax
Standard rate 7%. Registration threshold: 36,000 USD. 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.
Banking & payments for Holding Company
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.
Supported payment gateways
Remote-friendly accounts
Payoneer
A global fintech platform that supports Panamanian entities for receiving international B2B payments.
MultiPass
A UK-based EMI that provides multi-currency accounts for offshore entities, including Panama.
Panama incentives & advantages
Territorial Tax System
0% corporate and personal income tax on all foreign-sourced revenue.
Special Economic Zones (e.g., Panama Pacifico)
Exemptions from corporate income tax, import duties, and dividend taxes, plus expedited visa processing for foreign workers.
Limited Partnership (Sociedad en Comandita Simple) 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).
Register the Public Deed at the Mercantile Section of the Public Registry of Panama.
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.
Holding Company FAQ
What is the main benefit of a holding company?
Asset protection and tax efficiency. It isolates financial risk so that if a subsidiary fails, the holding company's other assets remain protected.
Where are the best jurisdictions for holding companies?
Popular jurisdictions include the UK, Singapore, Switzerland, the Netherlands, and the UAE, due to their favorable tax exemptions on dividends and capital gains.
Do holding companies need physical offices?
Yes, increasingly so. Many jurisdictions now enforce 'economic substance' laws requiring holding companies to have local directors, physical office space, and adequate local expenditure.
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Related terms
Key concepts you'll encounter when forming a Holding Company
Related guides
Complete Limited Partnership (Sociedad en Comandita Simple) guide
Taxes, requirements, banking, compliance
Limited Partnership (Sociedad en Comandita Simple) cost calculator
One-time and annual cost breakdown
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