Incorporating in Panama IBC
International investors, financiers and businessmen find Panama an ideal foreign base country for world-wide operations and transactions. Panama taxes according to the territoriality principle (that is, it does not tax foreign-source income), only the income produced locally is taxable, disregarding the citizenship of the taxpayer. Dividends are not included as income subject to income tax.
Due to its structure, geographical position, political stability and characteristics of its economy, Panama has become one of the most important tax havens of the Western Hemisphere. It has excellent international transportation and communication systems; the United States Dollar has been a currency of legal tender for more than ninety years.
Panama has taken several steps to modernise its economy and promote foreign investment. Most Panamanian and foreign investors choose to form Corporations. There are no exchange controls, currency restrictions or reporting requirements, and Panama imposes no limits on monetary transfers to and from the country.
Benefits
No reporting requirements
It is possible to keep a business under direct control while maintaining complete confidentiality. Names of beneficial owners are not publicly available.
It is not required to file any changes to ownership schedule, after the registration is complete.
It is not required to maintain a legal address.
No Citizenship or residency requirements or restrictions with respect to Owners, Directors and Officers as with most other tax havens.
Stockholders’ and Directors’ meetings may be held anywhere in the world.
Capital Shares may be issued in a nominative form, or to “Bearer” – the ideal protection of the Corporation owner’s identity and total privacy.
Funds and accumulated offshore profits can be deposited or invested in any country in the world without becoming subject to taxation in Panama.
One person might hold all three positions of a President, Corporate Secretary and Treasurer.
Ultimate financial privacy
Asset Protection
Income Tax Reduction, or elimination
No inheritance, succession or gift taxes
Protection from inflation
Reduction in legal liabilities
Reduction in operating expenses
Freedom from currency exchange control
Local Government concessions, subsidies and support
Data on Owners and Directors is not publicly available and remain confidential
Easy access to North American and European Capital Markets
No International Trade Tariffs.
No annual tax return requirements.
No import/export quantity limitations.
No costly bureaucracy
Company Formation
Type of Company for International Trade Investment
Generally, corporations are incorporated under the Corporation Statute Law 32 of the 1927 Commercial Code. Limited Liability Companies and Limited Partnerships are used also.
Restrictions on Trading
Cannot undertake the business of banking, trusteeship and trust administration, insurance, assurance, reinsurance, fund management, investment funds, collective investment schemes or any other activity that would suggest an association with the banking, finance, fiduciary or insurance businesses.
Time to Incorporate
One day, subject to name approval.
Name Restrictions
A name that is similar to or identical to an existing company. Names of well known companies incorporated elsewhere or a name that implies government patronage.
Names Requiring Consent or License
Bank, building society, savings, insurance, assurance, reinsurance, fund management, investment fund, trust or their foreign language equivalents.
Procedure to Incorporate
By presentation of the proposed corporation’s signed Articles of Incorporation before a Notary Public who creates a Public Deed for registration at the Public Registry.
Language of Legislation and Corporate Documents
Spanish and certified English translations.
Registered Office Required
Yes, must be maintained in Panama at the address of the Registered Agent.
Name Approval Required
Yes.
Language of Name
Names may be expressed in any language using the Latin alphabet. The Registrar may request a Spanish or English translation.
Suffixes to Denote Limited Liability
All Panamanian corporations must end with the suffix Corporation, Incorporated, Sociedad Anonima or the abbreviations Corp, Inc or SA. They may not utilise the suffix Limited or Ltd.
Disclosure of Beneficial Owner to Authorities
No.
Compliance
Authorized and Issues Share Capital
The standard authorised share capital is US$10,000 divided in to 100 common voting shares of US$100 each or 500 common voting shares of no par value; the capital may be expressed in any convertible currency. The minimum issued capital is either one share of no par value or one share of par value.
Taxation
No corporation tax is levied on non-Panamanian sourced income.
License Fees
Annual Franchise Tax of US$350 is payable – Pls check remarks below.
Directors
Both corporations and natural persons may act as directors and the minimum number of directors is three. They may be of any nationality and need not be residents of Panama. Panamanian companies are also required to appoint a minimum of three officers (president, secretary and treasurer) who may also be the directors.
Classes of Shares Permitted
Non-voting shares, preferred shares and registered shares. Bearer shares can be issued but no-par-value and bearer shares must be fully paid when issued. The registered agent must keep the bearer shares certificate in safe custody and must notify the Registrar that the shares have been issued.
Shareholders
The minimum number of shareholders is one.
Double Taxation
None.
Financial Statement Requirements
No requirement if income is of non-Panamanian sources.
Company Secretary
A company secretary must be appointed, who may be a natural or corporate person. The company secretary may be of any nationality and need not be a resident of Panama.
Contact Us
Should you require additional information, request a quotation or clarify any related matter, please contact one of our Consultants who will be happy to assist with your enquiries.
Disclaimer
COI ´s services are subject to its Terms and Conditions.The information provided by COI is intended as informative material and should not be relied solely upon in decision-making, especially if it concerns international tax planning and financial structuring as these areas are subject to frequent changes, although its efforts to keep all information on its website regularly updated.
COI strongly recommends that each potential user of its services seek tax and legal advice before deciding on implementing a solution employing international financial structures. COI will not be liable for any damages, costs and expenses resulting from or incurred as a result of any action taken or omitted based upon any such information provided by COI.