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Panama Company Formation

Overview of a Panama Offshore Company

A Panama Offshore Company, or International Business Corporation (IBC) as they are commonly referred to in other jurisdictions, is one of the longest standing offshore formation jurisdictions in the world. Established in 1927, it has since registered some 400,000 corporations and remains one of the premier destinations for offshore business formation. The Panamanian offshore model has since become the world standard due to its flexible formation structure, methods to ensure customer privacy and supportive legal framework.

Panama is strategically located as a bridge between the Americas and has become an international center for trade, finance, and baking services. Thanks to a stable political environment, the Panamanian economy has achieved rapid growth over the last two decades due to its open business environment, free trade zones, and low tariffs that have encouraged investors and business enterprises in the country. Panama remains one of the best places to due business due its financial opportunities, low risk investments, and thriving banking center.

A Panama Offshore Company gives individuals and corporations the ability to incorporate in a country that has a long reputation for financial and offshore excellence. Offshore formation in Panama offers complete confidentiality, attractive tax-free opportunities, a favorable legal environment, and a supportive banking infrastructure all of which account for why Panama is one of the premier destinations for offshore corporations.

Top Uses of a Panama Offshore Company

Panama has a supportive legislative and banking environment making incorporation procedures both easy and flexible for many different business activities. An offshore company can be made for any legal purpose and for any legal activity, including but not limited to:

  • Offshore savings and investments
  • Private Interest Foundations
  • Forex and stock trading
  • E-commerce
  • Professional service company
  • Holding Company
  • Licensing company
  • Internet services
  • Asset protection Company

Advantages of a Panama Company

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.

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.

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, 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 dependent on our law firm.

Favorable Incorporation Laws

Panama offers the most favorable and most flexible incorporation laws available in the world.

Strict Privacy Laws

Panama continues to maintain what we consider to be the most solid banking and corporate book secrecy laws in the world, which are engraved in its' constitution.

With Britain's proposed regulation for removal of bank and corporate book secrecy in the UK offshore territories, plus considerable dilution of privacy laws in jurisdictions, such as Bahamas, Antigua, St. Vincent etc., it is clear that Panama remains the most secure offshore financial center

In Panama, privacy and confidentiality are not only respected, but also vigorously protected by constitutional law. Panama offers the best bank secrecy and corporate book secrecy laws in the world.

No Sharing of Information Treaties

Panama has no mutual legal assistance treaties (MLAT's) for sharing of banking information with any other nation and does not recognize court rulings from other countries.

Stable Government

Panama has what is considered by government analysts to be the most stable government in all of Central or South America.

Tax Benefits

  • No tax reporting requirements
  • No income tax
  • No capital gains tax
  • No sales tax
  • No tax on issuance of corporate shares
  • No tax to shareholders
  • No stock sale or transfer tax
  • No capital stock tax
  • No property tax
  • No estate tax
  • No gift tax
  • No stamp tax
  • No succession tax
  • No inventory tax

Key Corporate Features [Chart] of a Panama Company

Panama Company Corporate Details
General

Type of Entity Limited by Shares
Type of Law Civil Law System
Governed by General Corporation Law of 1927
Coded Bank Accounts Law 8 of 1959
Commercial Code Law 17
Registered Office in Panama Yes
Shelf company availability Yes
Our time to establish a new company 3 days
Minimum government fees (excluding taxation) US$250
Corporate Taxation No
Access to Double Taxation Treaties Yes
Share capital or equivalent

Standard currency Legal tender is the US dollar.
Panamanian Balboa (official currency)
PAB fixed exchange rate of USD $1.00 = PAB 1.00
Permitted currencies Any
Minimum paid up No minimum
Usual authorized USD $10,000 divided into 100 shares of $100 each
Bearer shares allowed Yes
No par value shares allowed Yes
Directors

Minimum number 3 Directors/Officers (President, Secretary and Treasurer)
Local required No
Publicly accessible records No
Location of meetings Anywhere
Corporate directorship allowed No
Shareholders

Minimum number 1
Publicly accessible records No
Corporate shareholder allowed Yes
Location of meetings Anywhere
Company Secretary

Required Yes
Local or qualified No
Accounts

Requirements to prepare No
Audit requirements No
Requirements to file accounts No
Publicly accessible accounts No
Recurring Government Costs

Minimum Annual Tax / License Fee USD $250
Annual Return Filing Fee USD $350
Other

Requirement to file annual return No
Migration of domicile permitted Yes

Articles of Incorporation Requirements

  • Name of the corporation
  • Name and domicile of the subscribers of the corporation
  • Corporate objectifies
  • Corporate Capital
  • Duration of corporation
  • Name and address of Directors and dignitaries
  • Name and address of the registered agent

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.

Taxation of a Panama Company


A Panama Offshore Company enjoys a variety of tax exemptions that offer individuals and corporations a number of savings, including:

  • No tax reporting requirements
  • No income tax
  • No capital gains tax
  • No sales tax
  • No tax on issuance of corporate shares
  • No tax to shareholders
  • No stock sale or transfer tax
  • No capital stock tax
  • No property tax
  • No estate tax
  • No gift tax
  • No stamp tax
  • No succession tax
  • No inventory tax

Corporate Details of a Panama Company

Required Capital

No minimums

Financial Statements Required

A Panama Company is not required to file audited financial statements annually with the Financial Services Commission.

Company Secretary

The appointment of a company secretary is mandatory

Directors

A panama offshore Company must have a minimum of (3) three Directors (President, Secretary and Treasurer)

Powers of the Company

Companies incorporated in Panama have equal power as that of a natural person.

Registered Office Required

Every Panamanian corporation must have a registered office

Local Presence

There are no mandatory local presence requirements

Language of Name

The name of the company may be in any language

License Fee

There is an annual fee of US$350 with a one time registration payment of US$250.

Name Restrictions

The name of a Panama Company must include one of the following legal endings: Incorporated, Corporation, Sociedad Anonima, Inc., Corp., S.A.

Shareholders

There must be one (1) shareholder, either and individual or a corporate body, issued one share valued at US$100

Corporate Meetings

Meetings can take place anywhere in the world

Double Taxation Agreements

Panama has signed twelve (12) Double Taxation Agreements with Barbados, South Korea, Spain, France, Italy, Luxembourg, Mexico, The Netherlands, Portugal, Qatar, Singapore and the United States of America.

Order a Belize International Business Company from Sovereign (with or without a bank account) today. Click on the Let’s Get Started button below.

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