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.
Most used legal structures:
Anonymous IBC Corporation (Sociedades Anonimas – Law 32 of 1927).
Private Interest Foundations (Fundaciones de Interes Privado – Law 25 of 1995).
Type of structures preferred for international transactions:
Corporations (IBC) and Private Interest Foundations.
No minimum paid-in capital and no time limit in which said capital must be paid up.
Costs to incorporate, excluding government fees:
Very competitive costs compared to other Jurisdictions.
Annual fees paid to authorities:
US$ 300 (Annual Franchise Tax), for corporations, irrespective of the level of the authorized, share capital and US$400 for the Panama Private Foundations.
The taxation of companies:
No tax on any transactions or business activities carried on outside Panama; no tax on any foreign source income.
Method of Incorporation:
Notary authentication and registration at the Panama Public Registry of Articles of Incorporation (for companies) and Foundation Charter (for the Private Foundations).
Who may incorporate?
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 is to use nominee subscribers.
Are ready made companies available?
There are companies available for immediate delivery. Company name, directors, officers and foundation council members can be changed in three to five business days.
Procedure for making changes in the corporation?
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.
Length of time to incorporate a new company?
Time frame for incorporation is 4 to 5 business days.
Registered agent is compulsory, but registered office is not.
Can the registered office be a bank/ lawyer/ accountant’s office?
Registered agent must be a Panama Lawyer or a Panama Law Firm.
Directors and Secretary:
3 directors / officers minimum (usually President, Secretary and Treasurer, either individual or corporate). One corporate council members enough for Private Foundations. In order to gain more privacy our Firm could appoint a nominee board of directors or a nominee Foundation Council.
Must a director/ secretary be resident from Panama?
Are Corporate Directors allowed?
Yes. Worldwide corporate entities are allowed to be appointed as Directors.
Appointee directors/ secretary possible?
Yes, as there are no nationality requirements or restrictions. Directors could be appointed by the client.
Amount of fees payable to appointee directors/ secretary:
Approx. US$ 300 per year (US$100 per Director).
Shareholders / Board meetings – as established in the articles of incorporation. May be held anywhere in the world. No periodic meetings are required by law.
None for offshore companies and Private Foundations.
Required only of companies operating inside the Panama territory.
Must financial statements of a company be audited?
Not for offshore companies and Private Foundations.
Is disclosure of profits required by filing balance sheets with annual returns?
Not for offshore companies and Private Foundations. Only if the company / private foundation operates inside the Panama territory.
Are there any exchange control or other financial restraints imposed upon a company?
No exchange control. The US Dollar is the currency of Panama and US coinage circulates freely.
How, if any, is migration into and out of the jurisdiction achieved?
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.