Panama Announces Start of Involuntary Dissolution Process for Legal Entities.

Panama, February 6, 2026. The Ministry of Economy and Finance (MEF) has announced, through its Circular MEF‑2026‑3564, the beginning of the involuntary dissolution process for legal entities, effective this February 27, 2026. This initiative is part of the Government’s efforts to strengthen compliance with the international standards on transparency, cooperation, and corporate registry cleanup.

The circular establishes an Inter‑Institutional Working Committee composed of the Directorate General of Revenue (“DGI”), the Panama Public Registry, and the Superintendency of Non‑Financial Subjects. The committee will coordinate and execute the necessary actions to purge entities subject to dissolution.

The process will be carried out in stages:

• Stage 1: Legal entities marked for dissolution due to non‑payment of the annual franchise tax for more than 10 years (fiscal year 2016), pursuant to Article 318‑A of the Fiscal Code.
• Stage 2: Legal entities under suspended status in the Public Registry, in accordance with Article 318‑A as amended by Laws 52 of 2016 and 254 of 2021.

During the first phase, the involuntary dissolution process will begin for 180,883 legal entities, previously coordinated between the DGI and the Public Registry. Subsequent groups will be processed progressively under the guidelines established by the Inter‑Institutional Committee.

Morgan & Morgan remains available to assist clients in reviewing the status of their entities and handling any procedures required to ensure compliance with their legal and tax obligations.

For additional inquiries, contact [email protected] or reach out to your designated attorney.