Overview of Corporations in Panama
By: G. Tapia Calviño
Panama is the second preferred jurisdiction and is the certified domicile for more than 400,000 corporations and foundations, after Hong Kong.
Some advantages of Panamanian corporations are the following:
- Panama does not allow tearing the corporative veil, thus the books of the corporation are kept private to a 100% according to the law.
- The client does not need to be in Panama for the incorporation. Corporations may be constituted in one day or already existing corporations may be acquired.
- The officers, directors and shareholders may be of any nationality or residents in any country. Only the names of directors and officers are available for the public, in the Public Registry Office. Officers or directors do not need to be shareholders.
- Directors and/or officers may be individuals or corporations. Directors and/or officers may hold meetings in any country and may be represented by Proxy.
- Annual or Periodical meetings of Shareholders or Directors are not required. Annual Statements of Income, nor any other type of reports are required. The meetings of directors/shareholders may be held via fax, phone or by any other means of electronic communication.
- Shares may be issued to the bearer or to someone’s name. The certificates of shares may be posted to someone’s name or to the Bearer (the Parties of Bearer are an anonymous form of the property), whether or not having a nominal value. Officers or directors of Panamanian Corporations do not need to be shareholders
- Total and absolute tax exemption for any business or transaction that the company performs outside Panama. Regardless the operations they perform, Corporations pay only the annual tax of US$300.00 to the Treasury. From Panama they may rebill merchandise being sold to a client abroad. The profit margin does not pay taxes provided that the merchandise does not enter Panamanian Territory.
- Panamanian Corporations should have two subscribers concurring at the public registry office to incorporate it. Said subscribers are individuals of our firm who concur before the Public Registry Office with the Articles of Incorporation to constitute the corporation. According to the law, the subscribers must hold one (1) share. As soon as the corporation is constituted, the subscribers execute a document waiving their rights.
- Panamanian Corporations do not require a commercial license to work abroad.
- The books, files and minutes of the corporation may be kept anywhere worldwide at directors´ decision. There is not a required minimum or maximum capital stock. Corporations may engage in any lawful activity in any country and may transact in any currency, as well as opening bank accounts. The corporation may have offices in Panama or any other country and may own real estate or other assets in any country. Full privacy and confidentiality.
- Panamanian Corporations of other jurisdictions may be “redomiciled” in Panama, and vice versa. May people who have corporations in jurisdictions such as Bahamas and other British territories, are now “redomiciling” their corporations to other jurisdictions, more private and secure, like Panama.
There are practically no limits for Panamanian corporations (off-shore). In case that the corporation decides to engage in business in Panama, then it needs to pay taxes for their local activities.
HOW TO ACQUIRE A PANAMANIAN CORPORATION:
- Pre-Consituted Corporations (Shelf): we keep some already constituted corporations in spare for being sold to clients who request them urgently. These corporations have not been used before, they are clean and ready for being used by whom acquired them. Shall the client request for a corporation constituted more than one year ago, its cost shall be higher than one recently constituted. Depending on the date on which said corporation was registered, the client shall settle the Annual Tax.
- New Corporations: In order to constitute its own corporation, the client needs to provide the following information via fax o e-mail:
1. Name of the corporation:
The client shall provide at least three suggestions to name the corporation, in case that the first proposed name is not available.
The name may be in any language and shall end with any of the following words: "Corporation", "Incorporated", "Société Anonymé", "Sociedad Anónima", or the abbreviations: "Corp.". "Inc.", o "S.A.".
Words such as: "Aseguradora", "Assurance", "Bank", "Banco", "Trust", "Fideicomiso" or any Word of alike meaning, may not be used to constitute an off-shore corporation. Special permissions are required to use any of these names. Names similar to an existing corporation may not be used either.
2. Directors / Officers:
The client shall provide the names of directors and their address. Directors must be no less than three, whose offices are usually of President, Secretary and Treasurer.
3. General Power.
In the Articles of Incorporation you may select to authorize the President or any other officer to bind the corporation with its sole signature in any transaction. We must be informed if you prefer this option.
4. Other notes:
With the instructions above described, we constitute the corporation using our Standard Articles of Incorporation, which allows to perform any kind of of business.
The Public Registry reviews the Articles of Incorporation and approves the registration of the corporation within the following two days.
Total and absolute tax exemption is provided for any business or transaction that the company performs outside Panama.
