Countries › Panama › Guide › 16. What is normal abroad but not here › US dollars, no local paper money and free repatriation

US dollars, no local paper money and free repatriation

Argentina. For full detail on Argentina, go to The Argentine Thread.

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

Abroad, investors usually face a local currency with its own exchange rate and, in much of Latin America, some FX rules. Panama's balboa is at par with the US dollar, which circulates freely; the Constitution bars forced circulation paper money, and Panama issues no paper currency of its own. There is no exchange rate risk on local revenue in dollars and the law guarantees free repatriation of capital, dividends, interest and profits.

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

Currency regime	Balboa at par with the US dollar, which circulates freely; no forced circulation paper money textConstitución Política art. 262; Superintendencia de Bancos statement, as of 2026-10-29 · in force
Dividend and capital repatriation	Free, guaranteed by law textLey 54 de 1998 art. 2, as of 2026-10-29 · in force

The rule

1. The power to issue money belongs to the State, which may transfer it to official issuing banks as the law provides. There shall be no paper money of forced circulation in the Republic.
Cost to do it: No conversion cost for US dollar business.
Example: Rents, salaries and invoices in Panama are set and paid in US dollars; the balboa exists as coins at par. / B/.1 equals US$1.Constitución Política (texto único, Gaceta Oficial 25176 de 15 de noviembre de 2004), arts. 261 and 262, 2004-11-15 official text · verified 2026-10-29

2. The banking regulator states that the official currency is the balboa, whose value is on a par with the US dollar, and that under Panamanian law the US dollar circulates freely and without restrictions in commercial and financial transactions.
Cost to do it: No FX spread on local transactions.
Example: A loan in US dollars from a foreign bank to a Panamanian company has no currency mismatch with local dollar revenue. / Same amount in both currencies.Superintendencia de Bancos de Panamá, historical review, Official statement on the monetary system, 2026-10-29 official text · verified 2026-10-29

3. Foreign investors and the companies in which they participate have the same rights and obligations as national investors, with no limits other than those in the Constitution and the law, and are guaranteed free disposal of the resources their investment generates, free repatriation of capital, dividends, interest and profits from the investment, and free sale of their production.
Cost to do it: No FX registration or approval cost; taxes on the payment still apply.
Example: A Panamanian subsidiary can pay a B/.1,000,000 dividend to its foreign parent without central bank approval, after dividend tax. / US$1,000,000 gross, before the dividend tax set in the taxes section.Ley 54 de 22 de julio de 1998 (Gaceta Oficial 23593), art. 2, 1998-07-22 official text · verified 2026-10-29

Topic	Common abroad	Panama
Currency	Local currency with floating or managed rate	Balboa at par; US dollar circulates freely
Paper money	Local banknotes	No forced circulation paper money (Constitution art. 262); US dollar notes circulate
Repatriation	Sometimes registration or approval	Free by law (Ley 54 de 1998 art. 2)

Money and FX: common abroad versus Panama.

Worked example

A foreign investor funds a Panamanian company with US$2,000,000 of equity and earns US dollar revenue. Profits come back without FX conversion or approval, subject only to tax.
Investors also active in Argentina, where FX and repatriation rules have been very different, can compare in The Argentine Thread guide.

Step by step

Price contracts, payroll and loans in US dollars; balboa coins and US currency are interchangeable.
Check cash reporting rules for large cash movements (fx section) and the FECI surcharge on local loans.

Common traps

No local currency means no devaluation to absorb shocks: costs and wages adjust in dollars.
Free repatriation does not remove dividend tax or withholding on payments abroad.

Sources

← Every sale needs a fiscal printer or electronic invoice

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