Private Limited Company Incorporati...
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Panamanian Corporations are incorporated under the law no. 32 of the year 1927 and the Commercial Code. In terms of offshore company incorporation of Panama being the most desirable jurisdictions. The Republic of Panama, located between Costa Rica and Colombia has a population of approximately 2.4 million. English is widely spoken in urban areas and used daily in commerce and international trade. In this article we will discuss how to incorporate company in panama?
Panama is a proud member of a select group of Latin American countries. Panama is quite frequent to foreign investment. Panama is a trade and distribution center. Panama[1] is not only used for trade and distribution but also serves as a financial center and suitable jurisdiction to establish regional offices for multinationals as well as other types of businesses and of course, tourism.
The basic features of Panama corporations are that there lies no corporate tax for the profits sourced outside of Panama. These Companies function outside of Panama and requires a minimum of three Directors. There are nonresident directors who are allowed to function and also corporate directors can be appointed. There is no requirement of annual accounts filing or keeping requirements. The standard share capital is 100 shares of US dollar of 100 each.
This is mostly used for asset protection purposes which separate the Founder from its property, once and for all and guarantees the interests of the beneficial owner(s). There lies no corporate tax in such type of foundations and the names are disclosed in public records. There are no shareholders in private foundations and nonresident foundation council members are allowed. Also, there are no annual return filing requirements.
S. No | Characteristics | |
1 | Corporate Legislation | The Corporations Law |
2 | Confidentiality | High level of anonymity and privacy. |
3 | Accounting requirement | Yes, accounts need to be maintained on an annual basis |
4 | Taxation | No taxes |
5 | Legislation | Modern offshore legislation |
6 | Standard currency | US Dollar |
7 | Time taken for formation | fast and time efficient takes about 3-4 days for incorporation one the documents are submitted to the registrar. |
8 | Company Secretary | Optional |
9 | Paid up capital requirement | No paid up capital requirement |
10 | Legal system basis | Civil Law |
11 | Minimum number of Directors | Minimum of 1 director |
12 | Minimum number of shareholders | Minimum of 1 Shareholder |
13 | Registered office | The registered office has to be in Netherland |
14 | Bearer Shares | Bearer shares are not permitted |
15 | Filing of Annual Returns | Not required |
16 | E-signature option | Allowed |
17 | Directors, shareholders disclosure on a public forum | No |
18 | Re-domiciliation permitted | Yes |
19 | Annual Meetings of shareholders | Yes |
In general, Panama offers great opportunities to all areas of business is it in trade, manufacturing, services, and tourism with an overall advantage that it is politically stable, tax incentives are there for the investors and also there is a sense of protection of investments through special laws.
Panama also has opportunities for business such as those offered at the Colon Free zone or the Panama Pacific Economic Area. Both have certain incentives involved, but the notable one is the exemptions in the taxes (except the 5% tax on dividends generated from foreign income) and there are multitude businesses that can be done.
It is easy and cost effective to set up a new corporation or company while having the option to create the entities anonymously allowing total privacy to the investors in their financial affairs. Along with this Panama is considered s a tax haven because it does not generate taxable income outside of Panama. In the case of the incomes generated inside Panama, all of the normal business deductions are available (such as rent, utilities, wages, equipment, business entertainment, etc) while income tax rates are low. Thus, Panama is a favorable location for investors to invest in because of its flexible and easy going policies.
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