Panama or British Virgin Islands: where should your business be based?

Panama: Corporate income tax is 25% on Panamanian-source profit only. Income from business conducted outside Panama is exempt, though a 5% dividend tax can apply when it is paid out. ITBMS is 7%. The British Virgin Islands: Companies are generally exempt from income tax, and no withholding tax or VAT is charged. Individuals pay no income tax, although a payroll tax applies.

Panama: The deed is notarised and recorded at the Registro Público in about 5 working days. A first tasa única of US$250 is paid at registration, then US$300 a year. The British Virgin Islands: Incorporation costs US$550 where up to 50,000 shares are authorised, and the annual fee is the same. No standard processing time is published.

Panama: Every sociedad anónima needs a resident agent who is a Panamanian lawyer or law firm. Directors need not live in Panama, and an Aviso de Operación is needed only to trade locally. The British Virgin Islands: Every company must keep a licensed registered agent in the BVI at all times, and no director needs to live there. Substance depends on the activity.

Panama: Resident agents file beneficial owners in a private register run by the Superintendency of Non-Financial Entities under Law 129 of 2020. Only competent authorities can see it. The British Virgin Islands: Since 1 April 2026 the register is open only to persons with a legitimate interest, for anti-money laundering purposes, at a fee of US$75.

Panama: Permanent residence is available from US$300,000 in a new property, or US$500,000 in a resale property, securities or a fixed deposit at a state bank. The British Virgin Islands: The government lists a self-employed work permit for non-Belongers who work in the territory on their own account.