---
titulo: "Panama Company Types Compared: Corporation, LLC and Foundation 2026"
titulo_seo: "Panama Corporation vs LLC vs Foundation: Compare"
meta: "Corporation, LLC or Private Interest Foundation? Compare capital, the US$300 to US$350 franchise tax and purpose, and pick the right Panama vehicle."
autor: "Diego Ospina Serna"
fecha: 2026-07-04
actualizado: 2026-07-04
materia: "Corporate Law"
idioma: "en"
par: "tipos-de-sociedad-en-panama-comparados-2026"
resumen: "Compare Panama's three most-used structures: the Corporation (Law 32 of 1927), the Limited Liability Company (Law 4 of 2009) and the Private Interest Foundation (Law 25 of 1995). What each is for, requirements, taxes and which one fits your project."
tags: ["Companies in Panama", "Corporate Law", "Private Interest Foundation", "Public Registry"]
orden: 20260704
faq:
  - q: "Which Panama entity should I choose: corporation, LLC or foundation?"
    a: "It depends on your goal: the corporation (S.A.) is the most versatile for business and investment; the LLC (SRL) suits few partners and certain US tax treatment; and the Private Interest Foundation is for protecting and transmitting wealth, not for operating a business."
  - q: "What is the difference between a Panama corporation and an LLC?"
    a: "A corporation issues freely transferable shares under Law 32 of 1927; an LLC (SRL) is based on quotas and a more closed structure, often preferred for closely held or family businesses and for pass-through US tax treatment."
---

Panama is one of the world's most-used jurisdictions to incorporate, thanks to its **territorial taxation** (only Panama-source income is taxed), its dollarized economy and its corporate flexibility. But choosing the wrong structure is costly. This guide compares the three most used.

> **Note:** general information current as of the date; confirm your case with a lawyer.

## Comparison table

| | **Corporation (S.A.)** | **LLC (S.R.L.)** | **Private Interest Foundation** |
|---|---|---|---|
| **Law** | Law 32 of 1927 | Law 4 of 2009 | Law 25 of 1995 |
| **Used for** | Business, holding, holding assets | Business with defined partners | Asset protection and estate planning |
| **Ownership** | Shareholders (shares) | Membership quotas | No owners or shares |
| **Bodies** | Board of directors (min. 3: president, secretary, treasurer) | Manager(s) | Foundation council |
| **Liability** | Limited to contribution | Limited to contribution | Assets separated from the founder |
| **Capital / endowment** | No minimum (usual authorized US$10,000) | Defined in the articles | Minimum initial endowment US$10,000 |
| **Annual franchise tax** | US$300 | US$300 | US$350 |

## When to use each

- **Corporation (S.A.).** The classic, most flexible structure: ideal to run a business, act as a holding of other companies, or hold assets (real estate, accounts, vehicles). Shares make it easy for investors to come and go. It is the one foreigners use most.
- **LLC (S.R.L.).** Designed for businesses with a defined group of partners who want control over who joins. It may be tax-efficient for certain U.S. partners (pass-through treatment) — a point to confirm with your tax advisor.
- **Private Interest Foundation.** Not for operating a business, but to **protect and transmit wealth**. The founder contributes assets that leave their personal estate and pass to the foundation, with rules on who receives them and when — a modern alternative to a will and a trust for estate planning and asset protection.

## A frequent combination

Many clients use both layers together: a **Private Interest Foundation that owns the shares of one or more Corporations**. This separates ultimate ownership (the foundation, oriented to succession) from operations (the companies that do business). Structuring it well from the start saves taxes, disputes and paperwork later.

## What every structure needs to stay alive

Incorporating is only the beginning. To keep your company or foundation valid and compliant you must handle: the **annual franchise tax**, the **resident agent**, **accounting records**, and reporting the **ultimate beneficial owner** to the authorities. At iurispa we incorporate your structure and keep it current so it never falls into arrears or dissolution.

> Related: [Private Interest Foundation in Panama](/guias/panama-private-interest-foundation-asset-protection/).

*Legal basis: Law 32 of 1927 (Corporations), Law 4 of 2009 (LLC), Law 25 of 1995 (Private Interest Foundations). Informational content, not legal or tax advice.*