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Panama business and legal glossary: Spanish terms explained in English
Last verified: 2026-10-29 · Status: Stable
Panamanian law uses Spanish terms that have no exact English equivalent: the pacto social and junta directiva of a sociedad anónima, the tasa única, the agente residente and the beneficiario final. Tax vocabulary includes renta de fuente panameña (the territorial rule), the declaración estimada, the impuesto de dividendo and the ITBMS. Each entry below gives a plain English meaning and the norm that defines or uses the term.
Panama's currency, the balboa (B/.), is at par with the US dollar, which circulates as legal tender; the Superintendencia de Bancos states that the official currency is the balboa, whose value is on a par with the United States dollar (checked 29 October 2026). USD figures therefore equal the balboa figures.
Key facts
| ITBMS standard rate | 7 %Código Fiscal art. 1057-V, as of 2026-10-29 · in force |
|---|---|
| Tasa única anual for companies | 300 PABCódigo Fiscal art. 318-A, as of 2026-10-29 · in force |
| Balboa per US dollar | 1 PAB per USDSuperintendencia de Bancos, as of 2026-10-29 · in force |
The rule
1. Sociedad anónima (S.A.): Corporation formed by two or more persons of any nationality, managed by a board of at least three directors.Ley 32 de 1927 arts. 1 and 49, Ley 32 de 1927 arts. 1 and 49, 1927-02-26 official text · verified 2026-10-29
2. Pacto social: Articles of incorporation; may be signed anywhere in any language, protocolized at a Panamanian notary and registered to bind third parties.Ley 32 de 1927 arts. 3 to 6, Ley 32 de 1927 arts. 3 to 6, 1927-02-26 official text · verified 2026-10-29
3. Junta Directiva: Board of directors, at least three members of legal age, with full control of the business.Ley 32 de 1927 arts. 49 and 50, Ley 32 de 1927 arts. 49 and 50, 1927-02-26 official text · verified 2026-10-29
4. Tasa única anual: Annual flat fee to keep an entity in good standing: B/.300 for companies, B/.400 for foundations.Código Fiscal art. 318-A (Ley 52 de 2016 art. 9), Código Fiscal art. 318-A (Ley 52 de 2016 art. 9), 2016-10-28 official text · verified 2026-10-29
5. Agente residente: Resident agent, a Panamanian lawyer or law firm that registers the entity, keeps records copies and records beneficial owners.Ley 129 de 2020 art. 11 (Ley 254 de 2021), Ley 129 de 2020 art. 11 (Ley 254 de 2021), 2021-11-11 official text · verified 2026-10-29
6. Beneficiario final: Beneficial owner, the individual who ultimately owns or controls the entity; recorded within 15 business days.Ley 129 de 2020 arts. 11 and 12 (Ley 254 de 2021), Ley 129 de 2020 arts. 11 and 12 (Ley 254 de 2021), 2021-11-11 official text · verified 2026-10-29
7. Suspensión de derechos corporativos: Suspension of corporate rights by the Registro Público, for example after three years of unpaid tasa única; one year to reactivate with a B/.1,000 fine.Código Fiscal art. 318-A (Ley 254 de 2021 art. 44), Código Fiscal art. 318-A (Ley 254 de 2021 art. 44), 2021-11-11 official text · verified 2026-10-29
8. Aviso de Operación: Mandatory sworn declaration to start commercial or industrial activity, filed in PANAMAEMPRENDE; it carries an annual tax of 2 percent of capital (B/.100 to B/.60,000).Ley 5 de 2007 art. 3 (Ley 2 de 2013); Código Fiscal art. 1004, Ley 5 de 2007 art. 3 (Ley 2 de 2013); Código Fiscal art. 1004, 2023-11-21 official text · verified 2026-10-29
9. PANAMAEMPRENDE: The Ministerio de Comercio e Industrias online system for the Aviso de Operación.Ley 5 de 2007 (Ley 2 de 2013), Ley 5 de 2007 (Ley 2 de 2013), 2013-02-06 official text · verified 2026-10-29
10. Renta de fuente panameña: Income produced within Panamanian territory, the only income subject to Panamanian income tax under the territorial rule.Código Fiscal art. 694 (Ley 8 de 2010 art. 2), Código Fiscal art. 694 (Ley 8 de 2010 art. 2), 2010-03-15 official text · verified 2026-10-29
11. Declaración jurada de rentas y declaración estimada: Annual income tax return (31 March for companies) filed with an estimate of next year's income, on which tax is prepaid.Código Fiscal art. 710 (Ley 52 de 2012), Código Fiscal art. 710 (Ley 52 de 2012), 2012-08-28 official text · verified 2026-10-29
12. Impuesto de dividendo: Dividend tax withheld by the company: 10 percent on Panamanian source profits, 5 percent on foreign source, export or listed exempt income.Código Fiscal art. 733 (Ley 8 de 2016 art. 63), Código Fiscal art. 733 (Ley 8 de 2016 art. 63), 2016-04-06 official text · verified 2026-10-29
13. ITBMS: Impuesto de Transferencia de Bienes Corporales Muebles y la Prestación de Servicios, Panama's 7 percent value added tax.Código Fiscal art. 1057-V (Ley 8 de 2010), Código Fiscal art. 1057-V (Ley 8 de 2010), 2010-03-15 official text · verified 2026-10-29
14. Impuesto de timbre: Stamp tax, paid monthly by sworn return within 15 calendar days after the month.Código Fiscal art. 946 (Ley 8 de 2010 art. 47), Código Fiscal art. 946 (Ley 8 de 2010 art. 47), 2010-03-15 official text · verified 2026-10-29
15. Administración Tributaria: The tax administrative courts and the Dirección General de Ingresos.Código de Procedimiento Tributario art. 6, Código de Procedimiento Tributario art. 6, 2019-02-13 official text · verified 2026-10-29
16. Entidad no calificada: Group entity that fails the economic substance tests; its foreign passive income is taxed at 15 percent from fiscal year 2027.Ley 526 de 2026 (Código Fiscal art. 707-D), Ley 526 de 2026 (Código Fiscal art. 707-D), 2026-05-28 official text · verified 2026-10-29
17. Cuota obrero patronal: Social security contributions: 9.75 percent employee, 13.25 percent employer until February 2027.Ley 51 de 2005 art. 101 (Ley 462 de 2025), Ley 51 de 2005 art. 101 (Ley 462 de 2025), 2025-03-18 official text · verified 2026-10-29
18. Décimo tercer mes: Thirteenth month pay, paid in three installments, each carrying special contributions of 10.75 percent (employer) and 7.25 percent (employee).Ley 51 de 2005 art. 101 numerals 4 and 5 (Ley 462 de 2025), Ley 51 de 2005 art. 101 numerals 4 and 5 (Ley 462 de 2025), 2025-03-18 official text · verified 2026-10-29
19. Balboa (B/.): Panama's official currency, at par with the US dollar; there is no forced circulation paper money.Constitution art. 262, Constitution art. 262, 2004-11-15 official text · verified 2026-10-29
20. Libre repatriación: Statutory guarantee of free repatriation of capital, dividends, interest and profits for foreign investors.Ley 54 de 1998 art. 2, Ley 54 de 1998 art. 2, 1998-07-22 official text · verified 2026-10-29
21. ACODECO: Autoridad de Protección al Consumidor y Defensa de la Competencia, the consumer and competition authority.Ley 45 de 2007 art. 84, Ley 45 de 2007 art. 84, 2007-10-31 official text · verified 2026-10-29
22. ANTAI: Autoridad Nacional de Transparencia y Acceso a la Información, which hears personal data complaints.Ley 81 de 2019 art. 18, Ley 81 de 2019 art. 18, 2019-03-26 official text · verified 2026-10-29
23. UAF: Unidad de Análisis Financiero, Panama's financial intelligence unit.Ley 23 de 2015 art. 5, Ley 23 de 2015 art. 5, 2015-04-27 official text · verified 2026-10-29
24. Gaceta Oficial: Official gazette where laws, decrees and resolutions are published; Legispan of the Asamblea Nacional hosts the texts used in this guide.Constitution (texto único published in Gaceta Oficial 25176), Constitution (texto único published in Gaceta Oficial 25176), 2004-11-15 official text · verified 2026-10-29
| Spanish term | English meaning | Norm |
|---|---|---|
| Sociedad anónima (S.A.) | Corporation formed by two or more persons of any nationality, managed by a board of at least three directors. | Ley 32 de 1927 arts. 1 and 49 |
| Pacto social | Articles of incorporation; may be signed anywhere in any language, protocolized at a Panamanian notary and registered to bind third parties. | Ley 32 de 1927 arts. 3 to 6 |
| Junta Directiva | Board of directors, at least three members of legal age, with full control of the business. | Ley 32 de 1927 arts. 49 and 50 |
| Tasa única anual | Annual flat fee to keep an entity in good standing: B/.300 for companies, B/.400 for foundations. | Código Fiscal art. 318-A (Ley 52 de 2016 art. 9) |
| Agente residente | Resident agent, a Panamanian lawyer or law firm that registers the entity, keeps records copies and records beneficial owners. | Ley 129 de 2020 art. 11 (Ley 254 de 2021) |
| Beneficiario final | Beneficial owner, the individual who ultimately owns or controls the entity; recorded within 15 business days. | Ley 129 de 2020 arts. 11 and 12 (Ley 254 de 2021) |
| Suspensión de derechos corporativos | Suspension of corporate rights by the Registro Público, for example after three years of unpaid tasa única; one year to reactivate with a B/.1,000 fine. | Código Fiscal art. 318-A (Ley 254 de 2021 art. 44) |
| Aviso de Operación | Mandatory sworn declaration to start commercial or industrial activity, filed in PANAMAEMPRENDE; it carries an annual tax of 2 percent of capital (B/.100 to B/.60,000). | Ley 5 de 2007 art. 3 (Ley 2 de 2013); Código Fiscal art. 1004 |
| PANAMAEMPRENDE | The Ministerio de Comercio e Industrias online system for the Aviso de Operación. | Ley 5 de 2007 (Ley 2 de 2013) |
| Renta de fuente panameña | Income produced within Panamanian territory, the only income subject to Panamanian income tax under the territorial rule. | Código Fiscal art. 694 (Ley 8 de 2010 art. 2) |
| Declaración jurada de rentas y declaración estimada | Annual income tax return (31 March for companies) filed with an estimate of next year's income, on which tax is prepaid. | Código Fiscal art. 710 (Ley 52 de 2012) |
| Impuesto de dividendo | Dividend tax withheld by the company: 10 percent on Panamanian source profits, 5 percent on foreign source, export or listed exempt income. | Código Fiscal art. 733 (Ley 8 de 2016 art. 63) |
| ITBMS | Impuesto de Transferencia de Bienes Corporales Muebles y la Prestación de Servicios, Panama's 7 percent value added tax. | Código Fiscal art. 1057-V (Ley 8 de 2010) |
| Impuesto de timbre | Stamp tax, paid monthly by sworn return within 15 calendar days after the month. | Código Fiscal art. 946 (Ley 8 de 2010 art. 47) |
| Administración Tributaria | The tax administrative courts and the Dirección General de Ingresos. | Código de Procedimiento Tributario art. 6 |
| Entidad no calificada | Group entity that fails the economic substance tests; its foreign passive income is taxed at 15 percent from fiscal year 2027. | Ley 526 de 2026 (Código Fiscal art. 707-D) |
| Cuota obrero patronal | Social security contributions: 9.75 percent employee, 13.25 percent employer until February 2027. | Ley 51 de 2005 art. 101 (Ley 462 de 2025) |
| Décimo tercer mes | Thirteenth month pay, paid in three installments, each carrying special contributions of 10.75 percent (employer) and 7.25 percent (employee). | Ley 51 de 2005 art. 101 numerals 4 and 5 (Ley 462 de 2025) |
| Balboa (B/.) | Panama's official currency, at par with the US dollar; there is no forced circulation paper money. | Constitution art. 262 |
| Libre repatriación | Statutory guarantee of free repatriation of capital, dividends, interest and profits for foreign investors. | Ley 54 de 1998 art. 2 |
| ACODECO | Autoridad de Protección al Consumidor y Defensa de la Competencia, the consumer and competition authority. | Ley 45 de 2007 art. 84 |
| ANTAI | Autoridad Nacional de Transparencia y Acceso a la Información, which hears personal data complaints. | Ley 81 de 2019 art. 18 |
| UAF | Unidad de Análisis Financiero, Panama's financial intelligence unit. | Ley 23 de 2015 art. 5 |
| Gaceta Oficial | Official gazette where laws, decrees and resolutions are published; Legispan of the Asamblea Nacional hosts the texts used in this guide. | Constitution (texto único published in Gaceta Oficial 25176) |
Panamanian terms at a glance
Worked example
- A board resolution approving a dividend is a resolución de junta directiva; the company withholds the impuesto de dividendo, pays its tasa única through its agente residente and keeps its beneficiario final information current.
Step by step
- Use the Spanish term in contracts and filings; English translations have no legal effect before Panamanian authorities without an official translation.
- Check the cited norm when a term drives a deadline or a fee.
Common traps
- Junta directiva means board of directors, while junta general de accionistas means shareholders' meeting.
- The tasa única is not a tax on income; it is due even for dormant companies.
- Renta de fuente panameña is broader than local sales: payments for services that benefit persons in Panama can be Panamanian source.
Sources
- Ley 32 de 26 de febrero de 1927, sobre sociedades anónimas, Legispan
- Ley 52 de 27 de octubre de 2016 (accounting records, Código Fiscal art. 318-A tasa única), Gaceta Oficial 28149-B, Legispan
- Ley 254 de 11 de noviembre de 2021 (beneficial ownership, records, suspension), Gaceta Oficial 29413-A, Legispan
- Ley 412 de 2023 (Colón Free Zone reform, Código Fiscal art. 1004), Gaceta Oficial 29914-A, Legispan
- Ley 2 de 2013 reforming Ley 5 de 2007 on the Aviso de Operación, Gaceta Oficial 27221, Legispan
- Ley 8 de 15 de marzo de 2010 (Código Fiscal reform: income tax, ITBMS, stamp tax), Gaceta Oficial 26489-A, Legispan
- Ley 52 de 28 de agosto de 2012 (Código Fiscal art. 710 and 727), Gaceta Oficial 27108, Legispan
- Ley 8 de 2016 (Código Fiscal art. 733 dividend tax), Gaceta Oficial 28004-C, Legispan
- Ley 76 de 13 de febrero de 2019, Código de Procedimiento Tributario, Gaceta Oficial 28714-B, Legispan
- Gaceta Oficial 30534-B of 2026 with Ley 526 de 28 de mayo de 2026 (economic substance), Legispan
- Ley 462 de 18 de marzo de 2025 (Caja de Seguro Social reform), Gaceta Oficial 30238, Legispan
- Constitución Política de la República de Panamá, texto único, Gaceta Oficial 25176 of 2004, Legispan
- Ley 54 de 22 de julio de 1998 (legal stability of investments), Gaceta Oficial 23593, Legispan
- Ley 45 de 31 de octubre de 2007 (consumer protection and competition), Gaceta Oficial 25914, Legispan
- Ley 81 de 26 de marzo de 2019, sobre protección de datos personales, Gaceta Oficial 28743-A, Legispan
- Ley 23 de 27 de abril de 2015 (anti money laundering), Gaceta Oficial 27768-B, Legispan
- Superintendencia de Bancos de Panamá, historical review
Related pages
- start/start-here
- start/who-regulates-what
- entities/sociedad-anonima
- taxes/tax-system-overview
- /country/panama/
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