Panama is one of the oldest and most established offshore jurisdictions in the world. The territorial tax principle means that income from abroad is completely tax-free in Panama. The Panamanian foundation law of 1995, one of the strongest foundation laws in the world, allows private foundations to be set up with exceptional creditor protection and a high degree of discretion.
Why Panama for asset protection?
Panama's territorial tax system is one of the purest in the world: foreign income is completely tax-free, whether or not it is remitted to Panama. The Panamanian private foundation (Fundación de Interés Privado) offers some of the strongest creditor protection in the world: creditors can challenge foundation assets only if they prove that the transfer was made with fraudulent intent, and the burden of proof lies with the creditor. Panama is not an EU member, but it has exchanged account data under the OECD CRS standard since 2018.
Offshore foundation in Panama
A Panamanian private foundation is ideal for: protecting investment assets from creditors, the consequences of divorce and state intervention, passing wealth across generations without inheritance tax, holding international shareholdings, property and bank accounts, and the discreet management of family wealth with a foundation council of your choice. The founder can be a beneficiary at the same time, a structure that is not possible in many other jurisdictions.
The tax framework
Panama levies no tax on foreign income. Local income is subject to income tax of up to 25%. No capital gains tax on foreign capital gains. No inheritance tax on foreign assets. The United Kingdom and Panama have had a double taxation convention in force since December 2013, which fixes how income between the two countries is taxed. Since October 2026, Panama is no longer on the EU's blacklist for tax purposes but on its watch list. This calls for careful structuring.
Relevant services
- Offshore foundation, Panama
- Offshore foundation (overview)
- Bank accounts outside the EU
- Book a consultation
Challenges
Asset classes
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