Panama companies, also known as Panamanian Corporations are created under the General Corporation Law, Law 32 of February 26, 1927. Law 32 has been used as a model for many other jurisdictions and offers a flexible corporate structure, provides investor privacy and ensures the legal framework to conduct legitimate business activities in the international arena.
Some guidelines to follow for the formation of a Panama offshore company:
Second Most Popular Jurisdiction in the World
Panama is the registered domicile for over 400,000 corporations & foundations, making it the second most popular jurisdiction to incorporate in the world, next to Hong Kong.
Panama Offshore Company Advantages
- No Reporting Requirements or Taxes: Panama does not impose any reporting requirements or taxes for non-resident Panamanian corporations.
- No Piercing the Corporate Veil: Panama does not allow “piercing the corporate veil”, so your corporate books are maintained 100% private and confidential by law.
- Anonymous Ownership: Panama corporations share certificates can be issued in Nominative or Bearer form (Bearer Shares are an anonymous form of ownership), with or without par value.
- Neither the directors nor the officers of Panama corporations need to be shareholders.
- No Capital Requirements: Panama corporations do not require Paid-In Capital, nor is there a time limit in which authorized capital must be fully paid.
- Nominee Directors: We offer our clients the optional service of using our “Nominee Directors” for their corporation(s).
- For purposes of confidentiality, most of our clients prefer that we provide nominee directors/officers for their corporations, since unlike IBC’s set up under Belize, Nevis or other British Commonwealth tax haven corporate laws, these three directors have to be in the public registry. When we appoint nominee directors for the entities that we establish for our clients, we always provide our clients with pre-signed, undated letters of resignation from the directors so that our client can replace those directors at any time, without in any way being dependant on our law firm.
- Directors or Shareholders Meetings: Annual general meetings of either shareholders or directors of the corporation are not mandated or required.
- However, if meetings are held, they can take place anywhere in the world by proxy – via telephone, email or other electronic means. Any resolutions passed are valid regardless of whether they are signed on different dates or in different jurisdictions.
- Corporate Books: The Registered Agent is not required to keep any records for the corporation, however, every corporation should maintain a minute book and stock register, which can be held anywhere in the world.
- Subscribers: Panama corporations must have two subscribers present at the public registry in order to be incorporated.
- The subscribers are the individuals from our law firm that appear at the Public Registry with the articles of incorporation to incorporate the corporation. By law, the subscribers have a right to own one (1) share of the corporation. As soon as the corporation is established, the subscribers sign a document where by they resign their rights to one (1) share of the corporation. This document is provided to our client along with the other corporate documentation.
- Annual Corporate Franchise Tax: Non-resident Panama corporations should pay an annual corporate franchise tax of US$300 to remain in good standing.
- The public registry now requires the initial US $250 franchise fee for the first year to be paid at the time of incorporation. Starting in 2006 the late fee for non-payment is set at US $100. This annual franchise tax fee is part of the annual renewal cost of the corporation which also includes the registered agent fees.
- No Business License Requirement: Non-resident Panama Corporations do not require a commercial business license to operate business internationally.
- Re-Domiciliation: Corporations from other jurisdictions may be “re-domiciled” to Panama, and vice-versa.
- Many people who have corporations in jurisdictions such as the Bahamas and other British territories, are currently re-domiciling their corporations to more private and secure jurisdictions such as Panama.
- Corporate Seal: A corporate seal is optional. We usually recommend our clients order a seal locally because of their low cost relative to their high courier shipment cost from Panama.
- Legal Address: When registering a new Panama corporation, it must have a legal physical address that is included in the articles of incorporation.
- Our law firm provides a legal physical address as Registered Agent.
We offer a variety of new and ready-made Panama company and foundation packages either with or without account introductions.