The Republic of Panama occupies an area of 77,082 square kilometres and is situated between Costa Rica in Central America and Columbia in South America with coastlines on both the Pacific and Atlantic Oceans. Its capital, Panama City, is on the Pacific coast at the entrance of the Panama Canal.
Population of Panama is approx. 2.6 million. The constitution of Panama provides for a republican form of government.
Panamanian law is based on the Spanish Civil Code, although the company law has been taken from the corporation law of Delaware in the USA.
The official language is Spanish. Documents in a foreign language, which required to be filed at companies registry must be accompanied by a Spanish translation. Company documents in Spanish are accompanied by an English translation.
Corporations organized in accordance with Law no. 32 of 1997 can conduct business and exercise their powers in foreign countries.
A Panamanian Corporation has the following characteristics:
Shareholders: One shareholder can form a Panama corp. and we issue shares in registered form only. No details of the shareholders appear on the public file but a register of shareholders must be kept at the registered office address of the company in Panama.
Directors: The directors of a Panamanian company must appoint a President, Secretary and Treasurer. Whilst these offices may be held by one person, who is neither a director or a shareholder, the directors may equally appoint themselves. Details of the directors must be registered on the public file.
Officers/Secretary: A company secretary must be appointed, who may be a natural or corporate person.
Restriction on Name & Activity: The name of the corporation must include a word, phrase, or abbreviation distinguishing it from a sole proprietorship or partnership and can be expressed in any language. The most common endings include: "S.A.", "Corporation", "Corp.", "Incorporated", and "Inc.". Availability of a corporate name can be confirmed within a few hours.
Local Requirement: As a matter of local company law the company must appoint a Panama resident as registered agent who must be Panama lawyer or a firm of lawyers. We would generally provide these services as part of the domiciliary service fee.
Timescale: Incorporation can be achieved within 3 to 4 days. However, it does take approximately 1 week for documents to arrive from Panama. We do keep ready-made companies in stock available for immediate purchase.
Annual Reporting: The corporation is not required to file accounts.
Taxation:Panama Corporations offer complete tax exemption on foreign source income and transactions carried out outside the Republic of Panama, even though same may be managed from Panama. Only annual franchise fee / tax of US$ 250/- is payable in first year and thereafter US$ 300/- annually for share capital of US$ 10,000/- or 500 shares of no par value.
Panama Corporations are non-resident companies and hence not entitled to tax residency certificate and also can not avail benefits under any Double Tax Avoidance Agreements.
Books, Records, and Seal: Stock register and minutes book may be kept by electronic means or any other method authorized by law, that allow to determine with certainty the operations of the corporations, as long as said records can be printed. These records may be kept anywhere in the world as declared in the Articles of Incorporation. Panamanian corporations do not require a seal, though it may be adopted if approved by resolution or if stated in the Articles of Incorporation, or in the by-laws, if any.
Confidentiality: Unless violations of Panamanian laws occur, a Panama corporation cannot be forced to divulge confidential information to Panamanian or foreign authorities. Also, share certificates may be issued to the bearer. As, per Law Decree No. 9 of 26 February, 1998 which creates the Superintendence of Banks, the identity of bank account holders can not be divulged unless the deposits are guarantees of assets and the accounts are under investigation or supervision by the Superintendent.
Company Renewals: Renewal for BVI companies will fall depending on the date of incorporation as per below:
Company Anniversary date between: Due date:
January to June (1st half) Before July – 31st
July to December (2nd half) Before December – 31st
KYC Documents for individual Director/Shareholder
Whilst every effort has been made to ensure that the details contained herein are correct and up-to-date, it does not constitute legal, tax or other professional advice. We do not accept any responsibility, legal or otherwise, for any errors or omissions.