Partnership Limited by Shares in Panama — SaaS Startup Formation Guide
For SaaS startups, prioritize jurisdictions with strong intellectual property (IP) protection, access to global payment gateways like Stripe or PayPal, and favorable tax treaties to avoid double taxation on software subscriptions.
Last verified: June 13, 2026
Corporate Tax
25.0%
State Tax
0.0%
Formation Cost
$60
Annual Fee
$300
Forming a Partnership Limited by Shares in Panama as a SaaS Startup means a total tax burden of 25.0% and an official formation cost of $60. 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
≈ $1,235
Ongoing (per year)
≈ $600
Why Partnership Limited by Shares for SaaS Startup?
A Software as a Service (SaaS) startup delivers applications over the internet on a subscription basis. Because SaaS companies operate globally from day one, choosing the right jurisdiction is critical for accepting international payments, protecting intellectual property, and attracting venture capital.
Ideal for
- Tech entrepreneurs
- Software developers
- Venture-backed founders
- Global digital businesses
Challenges to watch
- Navigating international VAT/Sales Tax on digital services
- Protecting intellectual property across borders
- Opening reliable merchant accounts for recurring billing
- Complying with global data privacy laws (e.g., GDPR, CCPA)
Key decision criteria
- Access to global payment processors (Stripe, Braintree)
- Venture capital familiarity (e.g., Delaware C-Corp)
- Corporate tax rates and R&D tax incentives
- Ease of issuing employee stock options (ESOP)
Partnership Limited by Shares 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
Foreigners can act as general partners (who manage the company). A local resident agent (lawyer or law firm) is legally required.
Estimated breakdown (based on avg. $150,000 revenue)
Simulate with your own revenue →
VAT / Sales Tax
Standard rate 7%. Registration threshold: 36,000 USD. 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.
Banking & payments for SaaS Startup
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.
Supported payment gateways
Remote-friendly accounts
Payoneer
A popular digital alternative for Panamanian offshore entities to receive international B2B payments in USD.
Panama incentives & advantages
EMMA Regime (Manufacturing Services)
5% reduced corporate income tax rate, exemption from dividend tax, and import tax exemptions.
SEM Regime (Multinational Headquarters)
5% corporate tax rate, 0% dividend tax, and special visa categories for foreign executives.
Partnership Limited by Shares 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.
Register the notarized deed at the Public Registry of Panama (Registro Público).
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.
Register with the Directorate General of Revenues (DGI) to obtain a Tax ID (RUC).
SaaS Startup FAQ
Where is the best place to incorporate a SaaS startup?
Delaware (USA) is the gold standard if you plan to raise venture capital. For bootstrapped founders, Estonia (OÜ) or the UK (LTD) offer great digital infrastructure and tax efficiency.
Do I need to charge VAT/Sales Tax to global customers?
Yes, most jurisdictions require you to collect VAT or Sales Tax based on the customer's location, even if your company is based elsewhere. Using a Merchant of Record (MoR) can simplify this.
How do I accept recurring payments?
You need a business bank account and a payment gateway like Stripe, or a Merchant of Record like Paddle or Lemon Squeezy. These services require your company to be incorporated in a supported country.
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Related guides
Complete Partnership Limited by Shares guide
Taxes, requirements, banking, compliance
Partnership Limited by Shares cost calculator
One-time and annual cost breakdown
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