Panama Offshore Companies

PANAMA OFFSHORE COMPANY INCORPORATIONS

The Republic of Panama is a Spanish speaking country located in Central America, between Costa Rica and Columbia. It is a long established tax haven with excellent communications.

The return of democracy to Panama in 1990 has created a stable political environment in the country, making the Panamanian jurisdiction one of the most attractive offshore financial centers.

IMPORTANT NOTE:

A Financial Services License can be issued to a Panama offshore company. This is a very important feature for clients seeking to conduct financial affairs with their offshore company. Such a license is not available in most jurisdictions except at very high fees, large capital requirements and extensive/expensive documentation. Click here for more details.

The financial sector of Panama's economy provides the best facilities in Latin America with the principal banks of the world being represented. There is complete freedom in the movement of funds. All business is conducted in United States dollars and there are no exchange controls. English is widely used.

Although Panama has fairly high rates of tax internally, its status as a tax haven depends upon the principle that income received by a Panamanian corporation from sources outside Panama is exempt from tax.

Panama has full confidentiality and privacy embedded in the law, with civil and criminal penalties for disclosure. There is no requirement for the disclosure of beneficial ownership to the Panama authorities and no requirement for audited reports or financial statements. There are no double taxation agreements and no tax exchange agreements with other countries.

The incorporation documents are in Spanish but are accompanied by certified English translations. This is not usually a problem if your corporate vehicle is mainly for your personal use and/or you deal extensively in Latin America. It could be a problem if you sign many contracts worldwide, as attorneys may wish to have an independent translation of important clauses.

PANAMA OFFSHORE COMPANY FEES

• Click Here for Typical Panama Offshore Incorporation Fees
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OFFSHORE LEGISLATION

According to Panama's Corporation Law 32 of 1927 ("the Panama Corporation Law"), corporations may be created by any two persons of any nationality. The Panama Corporation Law is based on the Delaware Business Corporation Law of 1926. Unlike the laws of many offshore jurisdictions, there is no difference between domestic and offshore companies in Panama. All corporations pay taxes only on income derived from Panama.

Panamanian Law requires a minimum of three (3) directors and three (3) officers. These three directors may also act as officers of the company i.e. President, Secretary and Treasurer, or other positions as desired. Directors and officers need not be shareholders and they may be non-resident aliens. Directors may be companies or natural persons. Nominee Directors are provided by Maritime International Ltd. if desired, at no additional cost.

The following names may not be used without a licence or special permission:

Bank, Building Society, Savings, Insurance, Assurance, Re-Insurance, Fund Management, Investment Fund, Trust or their foreign language equivalent.

All Panamanian corporations must end with the suffix "Corporation", "Incorporate", "Sociedad Anonima" or the abbreviations "Corp". "Inc" or "S.A". They may not end with the suffix Limited or the abbreviation Ltd.

The standard authorised share capital is US $10,000 divided into 100 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. Higher capitalization requires higher government fees.

The advantages of incorporating in Panama are:

• Total secrecy and anonymity, protected by statute. 
• No requirement to disclose beneficial owners. 
• No requirement to file annual return/financial statements or hold annual general meetings of shareholders or directors. 
• Full exemption from taxation on any business activity or transaction carried on outside of Panama. 
• Reasonable formation and maintenance costs and fees. 
• No minimum nor maximum capital requirements. 
• Minimum registration fee on capital. 
• Corporations may engage in any lawful business in any country and may carry on transactions in whatever currencies they choose. 
• Companies may issue Registered or Bearer shares, preferred shares and non-voting shares. 
• The shareholders, directors and officers may be of any nationality and may be residents of any country. Neither the directors nor the officers need be shareholders. 
• Shareholders and/or directors may hold their meetings in any country and they may attend such meetings by proxy.

GENERAL INFORMATION

The Republic of Panama, with an area of approximately 76,900 square kilometres, is located between Costa Rica and Colombia, and forms the narrowest and lowest portion of the Isthmus that links North and South America.

The population of Panama is approximately 2.4 million, about 52 percent of which is urban.

Spanish is the official and spoken language. English is also spoken widely in urban areas and is used daily in commerce and international trade.

The Isthmus of Panama was discovered in 1501 by Rodrigo de Bastidas and Casco Nunez de Balboa, who played a leading part in the establishment of Santa Maria La Antigua del Darien in 1510; the first permanent settlement on the mainland of the Americas. In 1513, Balboa led an expedition, in Panama, that discovered the Pacific Ocean. Panama City was founded by Pedro Arias Davila on 15th August 1519, almost a hundred years before Jamestown, the first permanent English settlement in North America was founded. Panama was a Spanish colony until 1821 when it became part of the Gran Colombia of Simon Bolivar. In 1903, Panama broke its alliance with Colombia and became an independent republic.

GOVERNMENT

There are free and democratic elections with universal suffrage.

The executive branch of the goverment is at present composed of a President and two Vice- Presidents, elected for a five year term by direct election.

LEGAL

The legal system is based on Spanish Civil Law with many Common Law influences; particularly regarding Company Law which is based on the Delaware model. Generally, corporations are incorporated under the Corporation Statute Law 32 of the 1927 Commercial Code.

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