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Economic Substance in Panama: The Riquelme Case and How to Structure Your Holding in 2026

The recent decision by Spanish entrepreneur Enrique Riquelme to transfer his business group’s holding company (Riquelme Capital SL) to Central American soil has raised alarms in the European corporate sector. This is not an isolated decision. The key behind this strategic move lies in the implementation of the new economic substance regulations in Panama, a mandatory legal framework that redefines the rules for companies with foreign income.

Key points of this update in 1 minute:

  • The trigger: The relocation of the parent company Riquelme Capital SL from Spain to Panama, consolidating regional operations in Latin America.
  • The key regulation: The Economic Substance Law requires real physical and operational presence in the country to maintain the advantages of foreign-source income exemption.
  • The real benefit: Consolidate operations under a competitive territorial taxation system without risks of double taxation.
  • Mandatory requirements: Local management, qualified personnel, and real physical offices, aiming for the 2027 fiscal year.

The Riquelme Case: Beyond the Media Narrative

Many traditional analysts have interpreted this transfer as a mere cosmetic change of tax domicile. They are completely mistaken. Business reality demands a closer look at the fine print of Panamanian legislation.

Riquelme has not only moved his residency. He has relocated his management team and structured a real operational base. Why? Because Panamanian law obliges foreign companies to demonstrate tangible local operations. If you want your income from outside Panama to remain tax-exempt, you must have real substance in the territory.

“The economic substance law aids in the decision, requiring adequate, duly compensated, and qualified human resources.” — Enrique Riquelme.

This move demonstrates that starting a company in Panama is no longer about simply opening a shell company. It requires sophisticated consultancy to ensure your structure withstands any international tax audit in the future.

What Does Panama’s New Economic Substance Law Require?

The regulation seeks to align the country with global OECD standards, eliminating so-called “shell companies.” To enjoy the advantages of our territorial tax system, qualifying companies must prove that decision-making physically occurs in Panama City.

What exactly changes? Let’s compare the regulatory landscape before and after this reform supervised by Panama’s Directorate General of Revenue (DGI):

Regulated Concept Previous Scheme (Pre-Reform) Current Scheme (Economic Substance)
Physical Presence Only a local Resident Agent. Operational physical offices or validated co-working spaces within national territory.
Human Resources No local payroll personnel required. Local employees or qualified and duly compensated directors.
Decision-Making Virtual assemblies anywhere in the world. The management and control of assets must be effectively managed from Panama.
Operating Expenses No declared minimum local expenses. Operating expenses proportional to the activity generated, reflected in the country.

Our Expert Perspective: How to Successfully Structure Your Holding Company

At PanamaWay, we see this legislative change not as an obstacle, but as the greatest asset protection opportunity of the last decade. By requiring the establishment of substance, your holding company gains unquestionable legitimacy before foreign tax authorities.

They can no longer accuse you of using a shell company. You have offices, you have personnel, you have real substance.

A few weeks ago, a prominent e-commerce and real estate investment entrepreneur from Madrid came to our firm with an identical problem. He wanted to transfer his corporate operations but feared the consequences of a poorly structured change of tax residency. We designed a comprehensive plan: we processed his tax residency in Panama, incorporated the holding company, and rented physical corporate office space in Costa del Este.

During the process, we encountered a technical setback with the local bank’s compliance department, which required specific utility contracts in the company’s name before activating the operations account. We resolved this in less than 72 hours by restructuring the sublease agreement with our corporate real estate provider. Today, his holding company operates with complete peace of mind, shielded from external inspections.

Is Your Wealth Prepared for the New Substance Standard?

Don’t wait for your local tax administration to question the validity of your international companies. Relocating a holding company or creating a subsidiary requires a team of on-the-ground advisors who understand the peculiarities of Panamanian law and banking.

If you are looking for legal certainty, real optimization, and a smooth relocation for your family and business, let’s analyze your relocation case without obligation and design a robust structure adapted to the tax regulations in force in 2026.

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