Countries › Panama › Guide › 4. Entities and setup › Branch of a foreign company in Panama: registering a foreign sociedad anónima under Ley 32 de 1927, documents, the B/.5,000 penalty and the annual fee

Branch of a foreign company in Panama: registering a foreign sociedad anónima under Ley 32 de 1927, documents, the B/.5,000 penalty and the annual fee

Last verified: 2026-10-29 · Status: Stable

A foreign corporation may open offices or agencies and do business in Panama once it registers at the Registro Público its protocolized articles, its latest balance sheet with a statement of the capital it uses or will use in Panama, and a certificate that it is validly incorporated in its home country. A foreign company that operates without registering cannot sue or start proceedings before Panamanian courts or authorities, can still be sued, and faces a fine of up to B/.5,000. The branch must also register later amendments and mergers, and as a foreign legal entity it is listed among those that pay the annual tasa única.

Panama's official currency, the balboa (B/.), is at par with the US dollar, which circulates as paper money; the Superintendencia de Bancos states that the balboa's value is on a par with the US dollar (checked 29 October 2026). USD figures therefore equal the balboa figures.

Key facts

Statutory minimum assigned capital for a foreign company branch	No statutory minimum; capital used in Panama must be declared PABLey 32 de 1927 art. 90 numeral 2, as of 2026-10-29 · in force
Maximum fine for a foreign corporation operating unregistered	5000 PABLey 32 de 1927 art. 91, as of 2026-10-29 · in force
Tasa única anual for foreign legal entities registered in Panama	300 PABCódigo Fiscal art. 318-A (Ley 52 de 2016 art. 9), as of 2026-10-29 · in force

The rule

1. A foreign sociedad anónima may have offices or agencies and do business in Panama after filing for registration at the Registro Mercantil (today part of the Registro Público): (1) the deed protocolizing its pacto social; (2) a copy of its latest balance sheet with a statement of the part of its capital used or to be used in business in Panama; and (3) a certificate that it is incorporated and authorized under the laws of its country, issued and authenticated by the Panamanian consul there or, failing one, by the consul of a friendly nation.
Cost to do it: Notary protocolization of the foreign documents and their official translation if not in Spanish, plus Registro Público qualification and registry fees; the law sets no capital minimum for the branch, only a statement of the capital used in Panama.Ley 32 de 1927, sobre sociedades anónimas, art. 90, 1927-02-26 official text · verified 2026-10-29

2. A foreign sociedad anónima acting in Panama without meeting these requirements may not bring judicial or other proceedings before Panamanian courts or authorities, may be sued in all kinds of proceedings, and must pay a fine of up to five thousand balboas imposed by the finance ministry.
Cost to do it: Fine of up to B/.5,000 (US$5,000) for operating unregistered.
Example: A foreign contractor that starts a project in Panama without registering cannot sue a local client for unpaid invoices until it registers, and can be fined up to B/.5,000. / Up to US$5,000, on top of the cost of being unable to enforce its claims in Panama while unregistered.Ley 32 de 1927, art. 91, 1927-02-26 official text · verified 2026-10-29

3. A registered foreign company must file for registration the amendments to its pacto social and the merger and dissolution instruments that affect it. A power of attorney granted by the president of a foreign company can be registered only after the minutes of the meeting that elected that president and authorized the power have been registered.Ley 32 de 1927, art. 92, 1927-02-26 official text · verified 2026-10-29

4. The tasa única anual of Código Fiscal art. 318-A applies to sociedades anónimas, sociedades de responsabilidad limitada and any other legal entities, national or foreign: B/.300 at registration and every year after, due by 15 July or 15 January according to the registration month, with a B/.50 surcharge per late year or fraction and a block on registering corporate acts while unpaid.
Cost to do it: B/.300 (US$300) a year.Código Fiscal art. 318-A as worded by Ley 52 de 2016 art. 9, art. 318-A, 2016-10-28 official text · verified 2026-10-29

5. Before starting any commercial or industrial activity in Panama, the operator must obtain an Aviso de Operación, a mandatory sworn declaration filed only through the PanamaEmprende system of the Ministerio de Comercio e Industrias, which becomes a public document once confirmed by the system.Ley 5 de 2007 art. 3 and art. 5 numerals 3 and 7, as worded by Ley 2 de 2013 art. 2 and art. 3, Ley 5 de 2007 art. 3, 2013-02-05 official text · verified 2026-10-29

Point	Branch of a foreign S.A.	Panamanian S.A. subsidiary
Legal person	The foreign company itself	New Panamanian company
Documents	Protocolized foreign pacto, latest balance sheet with capital used in Panama, certificate of good standing (art. 90)	New pacto social with 2 subscribers and 3 directors (art. 1 and 2)
Later filings	Home country amendments, mergers and dissolution (art. 92)	Own amendments and acts
Sanction for not registering	No standing to sue and fine up to B/.5,000 (art. 91)	No effect against third parties before registration (art. 6)
Annual fee	B/.300 (art. 318-A)	B/.300 (art. 318-A)

Branch or subsidiary: what the law requires of each. Ley 32 de 1927 and Código Fiscal art. 318-A.

Worked example

A Brazilian engineering company wins a contract in Panama and opens a branch rather than a subsidiary. It has its articles protocolized at a Panamanian notary with an official translation, files its latest audited balance sheet with a statement that it will use US$250,000 (B/.250,000) of its capital in Panama, and a certificate of good standing authenticated by the Panamanian consulate in São Paulo (Ley 32 art. 90).
Once registered it obtains its Aviso de Operación through PanamaEmprende before starting work (Ley 5 de 2007 art. 3) and pays the B/.300 (US$300) tasa única each year (Código Fiscal art. 318-A). When the parent later amends its bylaws in Brazil, it files the amendment in Panama as well (Ley 32 art. 92).
Taxation of branch profits and remittances is outside this page and is not covered here.

Step by step

1. Gather the parent's articles, latest balance sheet and certificate of incorporation and good standing, authenticated as art. 90 requires, with an official translation into Spanish if needed.
2. Have the board resolve to establish in Panama, state the capital to be used there and appoint a representative; register the minutes electing the president before any power the president grants (art. 92).
3. Protocolize at a Panamanian notary and file at the Registro Público with the fees and the first tasa única.
4. Obtain the Aviso de Operación through PanamaEmprende before starting activity (Ley 5 de 2007 art. 3).
5. Keep filing home country amendments, mergers and dissolution in Panama (art. 92) and pay the tasa única every year (art. 318-A).

Common traps

Starting work before registration. The company cannot sue in Panama and can be fined up to B/.5,000 (art. 91).
Forgetting to file parent level amendments, mergers or a dissolution in Panama (art. 92).
Registering a power granted by the parent's president without first registering the minutes that elected the president and authorized the power (art. 92).
Branch liabilities are liabilities of the foreign parent itself, since the branch is not a separate legal person; a subsidiary limits exposure to its own assets.

Sources

← Sociedad de responsabilidad limitada (S. de R.L.) in Panama: Ley 4 de 2009, two or more partners, quotas, administrators and transfer consentPrivate interest foundation (fundación de interés privado) in Panama: Ley 25 de 1995, B/.10,000 initial patrimony, foundation council and the B/.350 and B/.400 annual fee →

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