PANAMA Trends and Developments Contributed by: Mariano Oteiza Díaz and Estefanía Alemán, Icaza, González-Ruiz & Alemán
for preparation is shorter than it may appear. Practi - tioners and their clients with international structures involving Panamanian entities should begin a struc - tured review now, rather than waiting for the regula - tions to be finalised. The first priority is a threshold assessment: whether each Panamanian entity in a given structure falls with - in the law’s scope, specifically, whether it forms part of a multinational group and whether it receives passive income from foreign sources within the relevant cat - egories. A careful factual analysis is required before any conclusions are drawn in either direction. For entities that do fall within scope, the next step is a functional analysis, an assessment of where, by whom, and on what basis key decisions are made in relation to the relevant foreign-source income- generating activities, and whether the current level of activity in Panama is sufficient to support a credible economic substance demonstration. This analysis should be calibrated against the anticipated regula - tory guidance on the treatment of pure equity holding entities and outsourcing arrangements.
Panama is entering a new regulatory chapter, and it does so from a position of considerable institutional strength. For international investors, multinational groups, and families who have long valued Panama as a platform for wealth management and corporate structuring, this chapter opens with the assurance that Panama’s framework now fully meets the standards that international partners, banking institutions, and tax authorities have come to expect of a serious, well- regulated corporate services jurisdiction. Navigating the new regime requires careful analysis and expert guidance, but the destination is one that strengthens the long-term legitimacy and durability of structures built around Panama.
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