How to Structure a Panama Company with a U.S. Holding Entity (Legally)

For many global startups, keeping a strong U.S. foundation while expanding internationally is a smart strategic move. Structuring a Panama company under a U.S. holding entity can help build investor confidence, streamline cross-border operations, and unlock access to key markets. This guide breaks down why founders choose this setup, how it works, and what to watch out for.

Why Combine Panama and the U.S.?

Panama is a popular choice for global startups, especially in crypto, fintech, and remote-first industries, because it doesn’t tax foreign income, doesn’t specifically regulate crypto, and offers fast, low-friction incorporation. It’s a great place to run global operations, especially if your team is remote and your customers or users are spread across different countries.

On the other hand, U.S. entities like Delaware C-Corps or Wyoming LLCs give you access to banking, Stripe, investors, and a familiar legal environment. If you’re raising capital or working with U.S.-based partners, having a U.S. holding company helps you stay credible and compliant.

The Basic Structure: How It Works

This is the part that matters most, and luckily, it’s pretty straightforward. Here’s how the setup typically looks:

1. Start by Incorporating a U.S. Entity

Most founders go with a Delaware C-Corp or a Wyoming LLC. This company becomes your global holding company. It acts as your investment vehicle and will hold equity, attract investors, and provide the legal backbone of your business.

2. The U.S. Company Fully Owns the Panama Company

Once your holding company is in place, it owns 100% of the shares of your Panama entity. That makes the Panama company a wholly owned subsidiary.

3. Your Day-to-Day Operations Run through the Panama Company

You sign contracts, pay contractors, and handle customer or product work through the Panama entity. This keeps your operational footprint offshore and efficient. Meanwhile, your intellectual property and investor relationships may be kept at the U.S. parent level.

4. You and Your Co-Founders Own the U.S. Company

By structuring things this way, your cap table stays clean. Investors deal only with the U.S. entity. You maintain control over both layers without having to duplicate equity or legal complexity.

This structure is clean, fundable, and flexible, and it works well for companies with international goals and remote teams.

When Does This Structure Make Sense?

This linked setup can work really well in these situations:

• You’re a non-U.S. founder but want access to U.S. tools like Stripe
• You run operations globally, and Panama gives you more flexibility
• You want to raise capital from U.S. investors while keeping your international base
• You’re optimizing for low tax on foreign income but want to stay compliant in both jurisdictions

Common Mistakes to Avoid

• Using nominee shareholders in Panama without understanding the risks
• Forgetting U.S. tax reporting requirements
• Making the structure too complex too early — keep it simple unless there’s a clear reason
• Assuming legal help isn’t needed — cross-border structures require proper planning

Key Legal and Tax Points to Consider

This structure is quite simple but needs to be done properly. A few things you’ll need to think about:

1. Substance in Panama

Panama doesn’t impose income tax on income earned outside the country, but having a real business presence (not just a paper entity) helps with credibility and compliance. That means contracts, bank accounts, maybe even local service providers.

2. Reporting Requirements in the U.S.

If you’re a U.S. person (citizen or resident), owning a foreign company triggers IRS reporting rules. You may need to file forms like 5471, FBAR, or Form 8938. These aren’t taxes per se, they’re disclosures. But penalties for missing them can be steep.

If you’re not a U.S. person, but your U.S. holding entity owns a foreign subsidiary, you still may have to deal with information returns. This is where having a good accountant who understands international structures is key.

3. Transfer Pricing

If the Panama company is generating revenue and transferring money to the U.S. parent (or vice versa), make sure intercompany transactions follow fair market rules. Document pricing policies and treat both companies like independent parties.