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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Annual Review of Your Panama Company: What to Check and When
Owning a company in Panama is not a one-time procedure. It is a structure with recurring obligations that must be reviewed every year and whenever the company’s circumstances change.
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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.
Continue ReadingQualified Entity under Law 526: The Framework That Already Exists and What the Regulation Will Define
Law 526 established Panama’s economic substance framework, while the executive regulation will define the applicable thresholds. Companies can already assess the four confirmed pillars and prepare before the regulation takes effect.
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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.
Continue ReadingPrivate Interest Foundations and Law 526: What the Family Office Client Needs to Know
Law 526 changed Panama’s tax landscape, but it did not eliminate patrimonial planning tools. The Private Interest Foundation remains valid — when you understand its position in the new framework.
Continue ReadingLaw 526 on Economic Substance: What Multinational Groups Must Do Before Fiscal Year 2027
The enactment of Law 526 on 28 May 2026 marked a turning point for corporate planning in Panama, yet the real challenge lies not in the wording of the statute but in the time remaining before it first applies.
Continue Reading Law 526: The Work Corporate Lawyers Must Do With Their Clients Now
Panama’s Law 526 of 2026 is now in force. For corporate lawyers, its enactment is not the end of a legislative process — it is the beginning of a concrete work agenda with every client holding Panamanian structures that generate foreign-source passive income. This article outlines the diagnostic that must begin now, the consequences of inaction, and the structural options available before January 2027.
Continue ReadingPanama’s Economic Substance Law: What Your Business Needs to Know
A fundamental reform that changes the rules for multinational groups in Panama — and that is already in force.
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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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