Countries › Panama › Guide › 5. FX and capital controls › Repatriating profits and capital from Panama: no FX approval, the free transfer guarantee of Ley 54 de 1998 and the 10 percent dividend tax

Repatriating profits and capital from Panama: no FX approval, the free transfer guarantee of Ley 54 de 1998 and the 10 percent dividend tax

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

Panama imposes no exchange control on dividends, capital returns, interest or payments for imports and services: Ley 54 de 1998 guarantees foreign investors free repatriation of capital, dividends, interest and profits, and no registration of the investment is needed for that guarantee. The cost of sending money out is tax, not FX: 10 percent on dividends from Panamanian source profits, 5 percent on foreign source, export and certain exempt profits, and 12.5 percent effective on interest, royalties and services. Panama has no tax treaty with Argentina, so the domestic rates apply to Argentine shareholders.

Panama's currency, the balboa (B/.), is at par with the US dollar, which circulates freely; the Superintendencia de Bancos states that the balboa's value is on a par with the US dollar and that the dollar circulates without restrictions in commercial and financial transactions (checked 29 October 2026). USD figures therefore equal the balboa figures.

Key facts

Access to foreign currency to pay dividends abroad	Free; no FX approval or registration textLey 54 de 1998 art. 2, as of 2026-10-29 · in force
Repatriation of foreign capital	Free; guaranteed by law textLey 54 de 1998 art. 2, as of 2026-10-29 · in force
Registration of foreign investment required to repatriate	No textLey 54 de 1998 art. 2, as of 2026-10-29 · in force
Dividend tax on Panamanian source profits paid to foreign shareholders	10 %Código Fiscal art. 733 literal a, as of 2026-10-29 · in force
Dividend tax on foreign source, export and certain exempt profits	5 %Código Fiscal art. 733 literal a, as of 2026-10-29 · in force
Branch profits tax on 100 percent of Panamanian taxable income	10 %Código Fiscal art. 733 literal f, as of 2026-10-29 · in force
Effective withholding on interest paid to foreign company lenders	12.5 %Código Fiscal arts. 699 and 701 literal h, as of 2026-10-29 · in force
Minimum investment for the Ley 54 de 1998 stability regime	2000000 PABLey 54 de 1998 art. 16, as of 2026-10-29 · in force
Term of legal and tax stability under Ley 54 de 1998	10 yearsLey 54 de 1998 art. 10, as of 2026-10-29 · in force
Double taxation treaty with Argentina in force	No textDGI list of treaties, as of 2026-10-29 · in force
Exchange rate used for USD conversions	1 PAB per USDBalboa at par with the US dollar (Superintendencia de Bancos); Ley 84 de 1904 art. 1, as of 2026-10-29 · in force

The rule

1. Foreign investors and companies in which they participate have the same rights and obligations as national investors, limited only by the Constitution and the law, including freedom of trade, industry, export and import; they are guaranteed free disposal of the resources generated by their investment, free repatriation of capital, dividends, interest and profits from the investment, and free sale of their production.
Cost to do it: No fee or registration is required for the art. 2 guarantee.
Example: B/.900,000 of net dividends leaves Panama by wire without FX approval. / US$900,000.Ley 54 de 22 de julio de 1998, art. 2, 1998-07-22 official text · verified 2026-10-29

2. Separately, investors in tourism, industry, export agriculture, agroforestry, mining, export processing zones, commercial and oil free zones, telecommunications, construction, ports and railways, power generation, irrigation and other activities approved by the Cabinet may register with the Ministry of Commerce and Industries (DINADE) to obtain ten years of legal, national tax, municipal tax (changes only every five years), customs and labor stability, if they present an investment plan of at least B/.2,000,000 to be executed within the term set by the sector law or at least two years. The Ministry decides on registration within sixty days.
Cost to do it: Minimum investment B/.2,000,000 (US$2,000,000); proof of execution by sworn statement and a certified public accountant's certificate.
Example: A B/.2,000,000 port logistics project registered with DINADE keeps the national tax regime in force at registration for ten years. / US$2,000,000.Ley 54 de 1998, arts. 5, 8, 10 and 16, 1998-07-22 official text · verified 2026-10-29

3. Companies that need an Aviso de Operación, a Colón Free Zone operating code, operate in an oil free zone, other free zones or special economic areas, or earn taxable income in Panama must withhold dividend tax of 10 percent of the profits they distribute when these are Panamanian source, and 5 percent when they come from exempt income under art. 708 literals f and l, foreign source or export income.
Example: A B/.1,000,000 Panamanian source dividend: B/.100,000 withheld, B/.900,000 net. / US$1,000,000 dividend, US$100,000 withheld, US$900,000 net.Código Fiscal art. 733 literal a as worded by Ley 8 de 2016 art. 63, art. 733 literal a, 2016-04-06 official text · verified 2026-10-29

4. Treaty rates prevail where Panama has a double taxation treaty with the shareholder's country; otherwise literals a and b apply (literal e). Branches of foreign companies pay 10 percent on 100 percent of their Panamanian taxable income less taxes paid on it (literal f). If no dividend is distributed or the distribution is below 40 percent of the year's net profit less taxes, the company pays 10 percent of the difference, with a 20 percent threshold where the 5 percent rate applies (literal g). Bearer share holders pay 20 percent (literal i). Amounts withheld are remitted within ten days and are final (literal j).Código Fiscal art. 733 literals e to j as worded by Ley 8 de 2010 art. 36, art. 733 literals e, f, g, i and j, 2010-03-15 official text · verified 2026-10-29

5. Interest, commissions and other financing charges paid or credited to a foreign creditor bear income tax at the general rates of art. 699 or 700 on 50 percent of the amount, withheld by the payer, save the exemptions of art. 708; the general corporate rate of art. 699 is 25 percent from 2011, so the effective rate for a foreign company lender is 12.5 percent.
Example: B/.200,000 of interest: B/.25,000 withheld. / US$200,000 of interest, US$25,000 withheld.Código Fiscal arts. 699 and 701 literal h as worded by Ley 8 de 2010 arts. 9 and 13, arts. 699 and 701 literal h, 2010-03-15 official text · verified 2026-10-29

6. Panama's list of double taxation treaties covers 17 countries (Barbados, Czech Republic, France, Ireland, Israel, Italy, Korea, Luxembourg, Mexico, Netherlands, Portugal, Qatar, Singapore, Spain, United Arab Emirates, United Kingdom and Vietnam); Argentina is not on it.Dirección General de Ingresos, list of treaties, Listado de Convenios, 2026-10-29 official text · verified 2026-10-29

Payment	FX approval	Panamanian tax	Net received	Rule
Dividend from Panamanian source profits	None	US$100,000 (10 percent)	US$900,000	Art. 733 a
Dividend from foreign source or export profits	None	US$50,000 (5 percent)	US$950,000	Art. 733 a
Interest on a loan from the foreign parent	None	US$125,000 (25 percent on 50 percent)	US$875,000	Art. 701 h
Payment to a foreign supplier for imported goods	None	No withholding on the price of goods	US$1,000,000	Ley 54 art. 2

Sending US$1,000,000 (B/.1,000,000) out of Panama to a foreign company with no treaty: FX cost and Panamanian tax.

Worked example

A Panamanian operating company owned by a company resident in a non treaty country, for example Argentina, earns B/.1,400,000 of Panamanian source net profit in 2026 and pays B/.350,000 of income tax, leaving B/.1,050,000.
To avoid the complementary tax it must distribute at least 40 percent of B/.1,050,000, which is B/.420,000. It decides to pay B/.1,000,000 (US$1,000,000): it withholds B/.100,000 within ten days and wires US$900,000 to the parent with no FX approval in Panama.
On the Argentine side, receipt and any conversion of that dividend follow Argentine FX and tax rules, which are covered at a high level in the Argentine guide.

Step by step

Approve the dividend at the board or shareholders' meeting under the company's articles and Ley 32 de 1927.
Classify the profits (Panamanian source, foreign source, export or exempt) to choose the 10 or 5 percent rate, and check any treaty with the shareholder's country.
Withhold and remit the dividend tax within ten days of the distribution; keep the bank's request for supporting documents in mind.
Wire the net amount in dollars; the bank will apply its know your customer and AML checks but no FX authorization exists.
If the project qualifies, weigh registration under Ley 54 de 1998 before investing to lock the tax regime for ten years.

Common traps

Not distributing is not tax free: below 40 percent of net profit the company pays the 10 percent complementary tax on the difference.
The ten year stability of Ley 54 de 1998 exists only after DINADE registration and the B/.2,000,000 plan, and art. 10 numeral 2 leaves indirect taxes such as ITBMS outside the tax stability.
Without a treaty, Argentine shareholders bear the full Panamanian rates, and the Argentine side may tax the same dividend again.

Sources

Related: Panama country profile · live dashboard · central bank and release calendar · our posts on X · where Argentina is involved, see The Argentine Thread guide

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