A Panama corporation is a juridical entity or juridical person, formed by law, generally by 2 or more people, which has similar rights and obligations as a person would have. A Panama corporation has Articles of Incorporation, which establishes the rules and regulations of who and how the company will operate. A Panama corporation must have 2 individuals called subscribers who appear before the Public Notary in Panama to sign the deed of formation of the Articles of Incorporation, which then gets inscribed in the Public Registry of Panama to form the juridical entity. Panama corporations require 3 individual directors to appear on the corporation, and 3 officers (President, Secretary and Treasurer), which can be 1 person occupying all 3 officer positions. The officers are the legal representatives who are authorized to sign for the corporation. The shareholders of the company are appointed on a physical share certificate that is issued once the company is “created” (once the corporation is inscribed in the Public Registry).

Panama corporations are generally used for local business operations in Panama, or for international trade, to settle trusts or foundations, to hold ownership of real estate (usually in Panama), for holding intellectual property rights, or to hold any other type of assets. In some cases, people establish Panama corporations for very specific business needs. Individuals can also create several Panama corporations working together as a group for holding various assets, which can provide better organization of business or family patrimony.

Panama is one of the few countries in the world that still offers  “bearer shares”, which are share certificates of a corporation that are issued to the name of “The Bearer”, meaning that the owner is the “bearer” or holder of the shares.  However, in August, 2013, Law 47 was passed which requires that Panama corporations issuing bearer shares and everyone in possession of those bearer shares must designate an authorized custodian to take possession of the bearer shares. An authorized custodian could be a licensed bank, a Panama attorney (or law firm), Panama fiduciaries, or brokerage houses regulated by the Superintendence of the Panama Securities Market. Additionally, those custodians in possession of bearer shares must submit a sworn declaration providing basic identity information about the true owner and the corporation which issued the shares, as well as its resident agent.