Economic Substance in Panama: The Two Tiers Under Executive Decree 32
Executive Decree No. 32 implementing Law 526 does not hold every entity to the same standard. We explain the two tiers of economic substance in Panama — reduced and complete — the 15% penalty for non-qualifying entities, and what to review before fiscal year 2027.
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Law 546: 2% ITBI Exemption for First-Time New Home Purchases in Panama
Law 546 exempts the 2% Real Estate Transfer Tax on first new homes valued up to $120,000, with staggered relief up to $200,000. We explain what the benefit covers, the two-year window from the occupancy permit, and what buyers and developers should review.
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Panama Adds Ecuador to Its Friendly Nations List: What It Means for Ecuadorian Citizens
Through Executive Decree 16 of 2026, Panama added Ecuador to its friendly nations list. We explain what the Friendly Nations Visa is, which economic pathways lead to permanent residency, and what Ecuadorian citizens should review before settling, investing or working in Panama.
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Panama Regulates Law 526: How Companies Must Demonstrate Economic Substance
Executive Decree No. 32 of 2026 regulates Law 526 on economic substance for passive income. We explain the five criteria covering personnel, facilities, decision-making, expenses and documentation that multinational group entities must meet from fiscal year 2027, and the 15% rate applied when they fall short.
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Panama’s Law 526: The Three Economic Substance Requirements
The law is clear in its structure. What remains to be defined is its practical interpretation — and that is precisely where companies need to prepare with information, not assumptions.
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Passive foreign-source income under Law 526: which categories apply to your structure?
The law does not apply to all income generated by a Panamanian entity. The second threshold is the type of income — and that analysis must come before the substance analysis.
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Does Law 526 Apply to Your Structure? The Analysis to Complete Before August
Law 526 has a specific applicability threshold. Before analyzing any pillar of economic substance, there is a prior question that determines whether everything else applies.
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Economic Substance in Panama: What Bill 641 Means for Your Company
On May 21, Panama’s National Assembly Committee on Economy and Finance approved Bill 641 on first debate. The bill establishes an economic substance regime for passive income of foreign source earned by entities domiciled in Panama. The full Assembly has until June 5 to pass it into law.
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Panama’s Territorial Tax Principle: Origins, Current Relevance, and the Tensions of the International Debate
The legislative debate around Bill 641 exposes the structural tensions of Panama’s legal and financial model — and forces an answer to a question the country has deferred for decades.
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Regulatory Changes and Tax Trends in Panama for 2026: What Your Business Should Anticipate
Panama’s fiscal and regulatory environment is undergoing a structural transformation driven by technology, international transparency standards, and growing requirements for genuine economic substance.
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