About Panama

Law 32 of 26 February 1927 on Corporations, complemented by Decree Law No. 5 of 2 July 1997.

Law 25 of June 12, 1995 for the Panama Private Interest Foundations.

Corporations (IBC) and Private Interest Foundations.

No minimum paid-in capital and no time limit in which said capital must be paid up.

Very competitive costs compared to other Jurisdictions.

US$ 300 (Annual Franchise Tax), for corporations, irrespective of the level of the authorized capital
US$ 400 for the Panama Private Foundations.

No tax on any transactions or business activities carried on outside Panama; no tax on any foreign source income.

Note: The above refers to Panama taxes only, the client must consult with a legal or tax specialist in his country of residence or nationality to comply with his local tax responsibilities.

Notary authentication and registration at the Panama Public Registry of Articles of Incorporation (for companies) and Foundation Charter (for the Private Foundations).

Two persons, either individual or corporate, of any nationality, usually a lawyer or one of their staff members. One person in case of a Private Foundations. Standard practice to facilitate and speed up the incorpoation procedures is to use nominee subscribers.

Company name, directors, officers and foundation council members can be changed in three to five business days. All changes shall be recorded at the Panama Public Registry.

Time frame for incorporation is 4 to 5 business days.

One

Registered agent is compulsory, but registered office is not.

Registered agent must be a Panama Lawyer or a Panama Law Firm.

Our law requires a minimum of 3 Directors – Officers. The client could appoint the directors as they do not need to be Panama nationals or residents; however, said directors’ identities would be recorded at the Panama Public Registry.

For Private Foundations a foundation council with a minimum of three members shall be appointed. (or one corporate entity).

Yes. Worldwide corporate entities are allowed to be appointed as Directors.

Yes, as there are no nationality requirements or restrictions. Directors could be appointed by the client.

The entity that regulates and supervises Resident Agents in Panama, called SSNF has created a private and closed system of Registration of Final Beneficiaries (RUBF). According to new legal provisions, it is now mandatory for Resident Agents to register in this private system the information of the final beneficiaries of the companies and foundations under their administration.

Beneficial owner identities remain private but guarded by a Panama Superintendence in case they are required by a Panamanian authority.

Shareholders / Board meetings – as established in the articles of incorporation. May be held anywhere in the world. No periodic meetings are required by law.

Annual returns filing not required for offshore companies and Private Foundations. Required only of entities operating inside the Panama territory.

However, Panama Offshore companies and Private Foundations are obligated by law to keep accounting records detailing its assets and support documentation, which could be held by the client outside Panama; however, the client shall send us a copy each year of said accounting records and shall be presented if a Panama authority requests them from us as Resident Agents.

Not for offshore companies and Private Foundations. However, Panama Offshore companies and Private Foundations are obligated by law to keep accounting records detailing its assets and support documentation.

Legal entities engaged exclusively in holding assets. — Please note that in the case of legal entities that do not engage in acts of commerce, and that are engaged exclusively in holding assets, regardless of their type, must provide information that demonstrates the value of the assets held and the income received from such assets. In this case said records do not require to be certified by an accountant. A scanned copy via email to us will suffice.

Legal entities that do engage in acts of commerce. — If the corporation carry out acts of commerce outside Panama, you must provide accounting records as follow: Data that accurately indicate the assets, liabilities, business operations, and net worth of a legal entity and which make it possible to determine the financial situation as well as financial statements of the same, according to International Financial Reporting Standards (IFRS). For companies that engages in acts of commerce, said accounting records and/or financial statements must be countersigned by a Certified Public Accountant, as established in Articles 3 and 4 of Executive Decree 258 of September 13, 2018. A scanned copy via email to us will suffice.

Not for offshore companies and Private Foundations. Only if the company / private foundation operates inside the Panama territory.

However, Panama Offshore companies and Private Foundations are obligated by law to keep accounting records detailing its assets and support documentation, which could be held by the client outside Panama; however, the client shall send us a copy each year of said records and shall be presented if a Panama authority requests them from us as Resident Agents.

Panama, as a financial center values and fights for privacy in business, however, is committed to preventing its legal and financial services platform from being used for illicit acts of any kind. It has therefore signed tax information exchange treaties with a large number of countries and is part of the OECD CRS.

Therefore, international standards must be complied and Panama must provide information about the companies and their beneficiaries in the event that international cooperation for any investigation or crime such information is requested from a Panamanian authority.

Migration of foreign companies and Private Foundations to Panama is allowed. Migration out of Panama depends on new jurisdiction. Companies and Private Foundations remain effective in Panama if not dissolved in Panama.