Panama now requires economic substance.
We build it.
The new Law 641 requires multinational groups with Panama entities to demonstrate real presence — personnel, offices, decision-making, and operating expenses. Limestone is your partner to make it happen.
What changes with Law 641?
Approved unanimously on May 27, 2026, Law 641 adds articles 707-A through 707-K to the Tax Code. Multinational groups with entities in Panama receiving foreign-source passive income — dividends, interest, royalties, capital gains, real estate income — must demonstrate real economic substance in the country.
Entities that fail to demonstrate substance will face a flat 15% tax on net taxable income from those passive income sources. The law takes effect in fiscal year 2027.
Effective
Fiscal year 2027
Non-substance rate
15% net income
Approval
Unanimous — 70 votes
Regulation deadline
90 days
This assessment is educational and informational. It does not constitute legal or tax advice. Consult qualified professionals for a formal analysis.
Does Law 641 affect you?
Answer these questions for an initial orientation.
Limestone is your economic substance
We are not legal or tax advisors. We are your operational and technology partner in Panama — the real presence the law demands.
Soft Landing
We manage your complete entry into Panama — legal, banking, immigration, and operations — as a single point of contact.
Local Representation
Qualified personnel, offices, strategic decision-making, and real operating expenses on Panamanian soil.
Compliance Enabled
We connect you with qualified lawyers and tax specialists for strategy. We implement what they recommend.
SOTA 2026 Technology
State-of-the-art operational and technology infrastructure so your Panama operation is real and competitive.
Important Notice
Limestone Group is not a law firm or tax advisory practice. We do not provide legal, tax, accounting, or regulatory advice. We facilitate connections with qualified professionals and execute the operational and technological implementation they recommend. The information on this page is educational and does not substitute specialized professional counsel.
Need economic substance in Panama?
Tell us about your multinational group. A managing partner will respond within 24 hours.
Or email us directly at info@limestonegroup.biz