Panama’s Corporation Law was created in 1927, and remains to date largely in its original, simple form. The Panama offshore company is very flexible in its possible arrangements, fast, easy and cheap to set up, without complicated requirements --- which has led to the creation of nearly half a million corporations registered in Panama.

Corporations can be formed quite easily in Panama with a minimum of three directors required (including nominee directors, for added anonymity). Any natural person, of any nationality, residing in any country, can act as a director, as can juridical persons such as other corporations.

No minimum capital is needed to establish a corporation, and the ‘articles of incorporation’, or the company’s intended activities, can be as wide-ranging or as particular as you wish to make them.

Once registered, a Panama bearer share corporation can acquire and purchase property, open a bank account, take out loans and mortgages, make contracts, and carry out business inside and outside of Panama. Best of all, its offshore (outside Panama) earnings and activities are entirely tax-free.

Offshore Company - Useage

Offshore Companies in Panama are used by businesses and individuals across the globe seeking asset protection, tax minimization, privacy, investment diversification, affordability and convenience.

They are used for international trade, to settle trusts or foundations, to establish and own bank or brokerage accounts, and to hold ownership of real estate or any other type of asset. Panama offshore corporations can also be useful for real estate transactions; by transferring the shares of a corporation that owns only the real estate property of interest. Ownership of the property can be transferred without incurring some of the taxes involved in the sale of real estate.

In some cases, Panama corporations are formed in the interest of highly private and confidential business transactions such as the movement of funds to another jurisdiction for asset protection.

Offshore Privacy Protection

Panama offers the strictest corporate book and banking secrecy laws available in the world, providing legal protection for your assets and identity. Most other offshore jurisdictions, such as the British-influenced countries, have bowed down to recent legislation that has begun the removal of bank secrecy in those British colonies around the globe. Panama, however, is a wholly sovereign nation; it is not governed or controlled by any other country.

Panama Company Facts:

Second Most Popular Jurisdiction in the World - Panama has registered 400,000 corporations & foundations, making it the second most popular jurisidiction for incorporation in the world after Hong Kong.

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

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. Neither the directors nor the officers of Panama corporations need to be shareholders.

No Capital Requirements - Panama corporations do not require paid-in capital, nor is there a time limit in which authorized capital must be fully paid.

Directors - Every Panama corporation requires 3 directors/officers (President, Secretary and Treasurer). The directors/officers can be either individuals or entities. Panama corporations directors, officers and shareholders may be of any nationality and resident of any country. The director names and identifications must be presented in the public registry when the corporation is formed.

Nominee Directors - For purposes of confidentiality, most people prefer that their law firm provide them with nominee directors / officers to establish their corporations(s). In these cases you should receive pre-signed, undated letters of resignation from the directors so that you can replace those directors at any time.

Annual Corporate Franchise Tax - Panama corporations and foundations should pay a low annual corporate franchise tax of $250 USD to remain in good standing. The deadline for tax payment depends on when the entity was formed.

• Formed Jan1 - June30 --> Tax is due 30th of June
• Formed July1 - Dec 31 --> Tax is due 31st of December
• late penalty is $50 USD. Entity is charged $250 USD for missing a second deadline.

Convenience - It is not necessary for the interested parties to be present in Panama for the purpose of establishing a corporation. A law firm can handle everything on your behalf without you having to visit Panama.

Re-Domiciliation - Corporations from other jurisdictions may be "re-domiciled" to Panama and vice versa. Many people who have corporations in jurisdictions such as the Bahamas or other British territories are currently domiciling their corporations to more private and secure jurisdictions such as Panama.

Legal Address - When registering a new Panama corporation it must have a legal physical address that is included in the articles of incorporation. A law firm provides a legal physical address as the Registered Agent.

Panama Corporate Tax Advantages

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

Offshore Company Formation Services - What Should You Receive?

All incorporations of Panama Offshore Companies should include the following:

• Original Articles of Incorporation (in Spanish)
• Official English Translation of Articles of Incorporation
• Resident Agent
• Registered Office
• Optional Nominee Directors
• Pre-signed, undated nominee director resignation letters
• Share certificates issued to "the Bearer", or to any person or entity that you designate (foundations do not have shares)
• First Minutes of the Board (whereby the subscibers renounce their legal rights to one share each)

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