Panama IBC Incorporation

FAQ

Frequently Asked Questions about Panama IBC Corporations


Incorporation Time Frame

How long does it take to incorporate a Panama IBC Company?
Our firm can have the corporate documents ready to be sent in approximately 5 business days.

About being present in Panama for the Incorporation.

Is it necessary to come personally to Panama to incorporate the Company?
No. It is not necessary to be present in Panama for incorporating a Panama IBC Company.

About the Authorized / Registered Capital.

What is the Authorized / Registered Capital?
The Authorized Capital is a nominal figure which represents the initial capital of the corporation. The minimum authorized capital according our law is US$10,000; however, this does not limit the corporation for making transactions below or above the US$10,000.

Is it necessary to pay or deposit the Authorized or Registered Capital of US$10,000?
No. This is just a nominal figure. It is not required for said Authorized Capital to be paid or deposited in any of its parts.

It is possible to register the corporation with a higher Authorized Capital?
Yes. It is possible to register the corporation with an authorized capital higher than US$10,000. In this case, it will be necessary to pay an extra registration tax fee depending of the amount of the Authorized Capital.

It is possible increase the authorized capital in a future?
Yes. It is possible to increase the authorized capital in a future, in this case it will be necessary to modify the articles of incorporation registered at the Panama Public Registry.

About the payment options.

How do we pay for the incorporation services?
It is possible to make the payment by Bank Wire Transference, Visa and MasterCard  cards. Please contact us in order to provide further payment details and instructions.

About the annual maintenance.

How much are the annual payments for the corporation?
The only tax payment that Panama Offshore Corporations are required to pay annually is the Annual Franchise Tax of US$300. Our fees for being the Resident Agent of the Corporations are US$ 350 per year. Nominee Directors services are charged additionally. * Local service taxes apply.

Who pays the annual taxes for my corporation?
Our Firm, as Resident Agents of your corporation takes care of paying the annual taxes; we will inform and remind you beforehand in order to make the payment with time and have your corporation in good standing.

About tax responsibilities in Panama.

Do I have to pay taxes in Panama for my corporation?
No, as long as the corporation activities are performed outside the Panama Territory the only tax responsibility shall be the annual franchise tax. This refer to Panama taxes only and under no circumstances exempt the client to consult with a legal or tax specialist in his country of residence or nationality to comply with his local tax responsibilities.

Do I have to pay taxes for the Interest of a bank account that the corporation has in Panama?
No, only income or profits generated within the geographic territory of Panama are subject to Panama taxes. Any profit obtained from activities outside of Panama, such as transfers or acquisition of securities, management of bank accounts and investments, the transfer or sale of real property or chattels, and the dividends received from companies operating abroad, will be exonerated from Panamanian taxes.

About the corporation books / accounting records

Can I keep the books and accounting records of the company or they have to stay in Panama?
Our laws does not require for the corporation books to be issued or kept in Panama. You can keep the books in your country. According to this provisions, the Minutes Book and the Shares Book can be obtained by the client in any library or kept by electronic means due to the fact that they no longer need to be registered or sealed in Panama. In other words, the client is entitled to obtain these books directly and keep the records on his own and in his own country.

Panama Offshore companies 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.

About the Corporation Resident Agent.

What is the corporation Resident Agent?
According to our law, corporations must have a Resident Agent that must be a Panama Lawyer or a Panama Law Firm. The Resident Agent role is to act and function as a link between the client and the Panama Government and assist with renewals and, when instructed, filling amendments at the Panama Public Registry. Resident Agent is also responsible for the client due diligence checks, beneficial owner registry and keeping copy of the company accounting records.

Who will be the Resident Agent of the Corporation?
When incorporating a Panama IBC through our firm, Mata & Pitti will be the Resident Agent of your Panama Corporation. As Resident Agents we will take care of paying the corporation annual taxes as well as any legal assistance you require in Panama for your corporation such as changes to the articles of incorporation, preparation of Board of Directors resolutions, Powers of Attorney, etc. Also to keep you up to date with any law changes that affect the requirements and operation of the legal entity.

Is it included in your incorporation cost the Resident Agent fee for the first year?
Yes, in our quotation is included our fees as the Resident Agents of the Corporation in Panama and Registered Office fee for the first year of incorporation.

Can we change the Attorney / Resident Agent?
Yes, if you desire in the future to change the Resident Agent, you are free to do so and it is totally possible. In this case, it will be necessary to modify the articles of incorporation. The new Resident Agent can take care of these modifications. Our firm can also take over an existing Panama corporation registered by a different Resident Agent if you want to change the administration from them to our law office; Mata & Pitti .

About the Panama Public Registry.

What is the Panama Public Registry?
Corporations in Panama are registered through the Panama Public Registry. This is the official government institution in charge of company registrations and all other legal procedures that are required by law to be Public in Panama.

Are the articles of incorporation registered in the Public Registry?
Yes; Articles of Incorporation are recorded at the Panama Public Registry, therefore all the general information regarding the corporation is available at the Panama Public registry, including the Directors identities.

Are the shareholder’s identities and personal information registered at the Panama Public Registry?
No, the information regarding the shareholders is not registered. Share Certificates are issued strictly and only through private documents.  There is an approved law for the registry of final beneficiaries of the companies; when in application, the shareholders identities will remain private but guarded by a Panama superintendence in case they are required by a Panamanian authority.

What if we don’t want our names to be registered in the Public Registry?
In order to keep anonymity we could provide a Nominee Board of Directors for your corporation. In this case the client will need to sign us a private declaration of indemnity document.

About the Directors / Officers.

What is the Board of Directors?
The management, administration and day to day business of the Corporation is administered and conducted by a Board of Directors, composed of at least of three members of full age, of any nationality. Usually directors are as well officers of the corporation (president, secretary and treasurer).

Is the identity of the 3 member of the Board of Directors public?
Yes, the Directors-Officers identities are public and are registered at the Panama Public Registry.

Is it necessary for the Board of Director Members to be shareholders?
It is not necessary for the members of a Board of Directors to be shareholders.

Can I be appointed as Director president, secretary and treasurer?
According our law, the Panama Corporations require a minimum of 3 Directors. They must be 3 different persons; it is not possible for one person to be appointed for the three Director charges. However, we clarify that one person could hold more than one officer positions.

Can I appoint my own directors?
Yes, they can be of any nationality and resident in any part of the world.

If we appoint our Directors, what information or documents do your require from them?
In this case, we will require from them to fill a “director due diligence form”, for their general details and simple copy of their passports or official ID, also an address confirmation document (example; utility bill or statement) for our firm private files.

About our Nominee Director Services.

Do you provide nominee director services?
Once we have clear due diligence checks in place, our firm can provide nominee director services. In this case the 3 Directors appointed would be persons from our staff. Said nominee directors will not participate in any way in the corporation activities, they will be appointed to comply with a legal requirement and facilitate the company formation.

How do I control the corporation if Nominee Directors are used?
In these cases you will issue a General Power of Attorney in order to grant you the power to act individually on behalf the corporation. This document can be issued as a private separate document in order to maintain private the identity of its holder.

Is it possible to change the Nominee Directors in the future?
Yes, it is possible to change directors; in this case it will be required to modify the articles if incorporation registered at the Panama Public Registry and to appoint the new Directors replacements.

Do you provide resignation letters when Nominee Directors are appointed?
Yes, in order for you to be free to change the nominee directors appointed by our Firm at any moment, our Firm provides undated letters of resignation signed by the directors.

About the Shares, the Share Certificates and the Shareholders.

Is it possible to issue bearer share certificates?
“Bearer Shares” are still possible in Panama; however, they shall be kept with the Resident Agent acting as Authorized Custodian of the share certificate (in this case, us as a law firm) along with a sworn declaration signed by the shareholder; it is no longer possible for the client to hold its own bearer share certificate. In this case, the company Articles of Incorporation should expressly state that the company commits to its bearer share certificates to an authorized custodian in Panama.

What is the difference between bearer share certificates and nominative share certificates?
The main difference used to be that in the bearer share, the owner was the person that physically holds and has the possession of the share. This mechanism is much more restricted with the immobilization of shares, however, bearer shares provide a little more flexibility for transfers and even the law includes advantages for hereditary dispositions of bearer shares when they are custody.

In nominative form, the shares clearly states who is the owner. Nevertheless, as mentioned in the above point, said flexibility of a bearer share certificates it is now limited as it has to be held by an authorized custodian in Panama.

Bearer or nominative share certificates, which one do you recommend?
We would suggest to issue nominative share certificates due to the fact the nominative share certificates are still private documents therefore the shareholder identity would not be exposed at any public documents and does not require custodian services.

Are the shareholders the maximum authority of the corporation?
Yes, shareholders are the maximum authority of the corporation. They are above the Directors-Officers of the company.

Is the shareholders information registered at the Panama Public Registry?
No, the information regarding the shareholders of the corporation is not registered at the Panama Public Registry or any public documents. Share Certificates are issued only through private documents.

Is it possible to have two share certificates?
Yes, it is possible to issue two or more share certificates, for example two certificates of 50% each, or 80% and 20%. The distribution is up to you.

About the Corporation Name.

Are there any requirements for the Corporation Name?
The name of the corporation, may be in any language, however, must include at the end a word or abbreviation which indicates that it is a corporation, such as: S.A. (Sociedad Anonima in Spanish), Inc, Incorporated, Corp, Corporation. The word Limited or its usual abbreviation Ltd will not be suitable for this purpose.

How do I know if the Corporation name is available?
Please send us the name alternatives and we will check the availability at the Panama Public Registry, free of charge.

About opening a bank account in a bank outside Panama.

Can I open a company bank account in a bank outside Panama with the documents you provide?
Yes. According to our laws, a Panama Corporation can establish a bank account in any country of the world; this will depend more if the bank accepts opening accounts for a Panama Company, as not all banks are focused on international operations. We will provide in our corporation package all necessary documents for you to open a bank account. Each bank will require different documents. However, the usually required documents are included in our package. If you need a particular document or assistance with the forms, we will be glad to assist you in complying with the bank requirements.

About opening a Panama Corporate Bank Account.

Is it possible to open a bank account in Panama for my corporation?
Yes, it is possible.

Do you provide bank introduction services in order to open a bank account in Panama?
Our Firm can refer high rated banks in Panama or abroad, however, the bank account opening procedures shall be discussed and arranged directly between the client and the banks. Our Firm does not act as intermediary for these procedures, we only assist on the side if any specific corporation legal documents are required by the banks.

Do I need to come personally to Panama in order to open the bank account?
Banks in Panama are required by law to know their very well their clients. For this reason it is always advisable for the client (account signatory) to come personally to Panama in order to have a brief personal interview with the bank, this will facilitate the account opening procedure. Usually a short trip of one or two business days is sufficient. Nevertheless, the banks we can recommend could accept a virtual interview and receiving the account application via email and waive the personal meeting requirement. According to current regulations, the new clients need to be involved directly with the banks when opening a corporate account to explain to the bank the business’s details, source of funds, details of transactions, and approximate balances.

What if I cannot personally go to Panama for opening the bank account?
The banks we can recommend could work with a virtual interview receiving the account application via email and  document hardcopies (if required) via courier.

How long does it take to open a corporate bank account in Panama?
According to our experience if all the documents and references provided to the bank are in order, the account opening procedure can take approximately 3 weeks (starting once all the documents are completed and presented to the bank).

What are the required documents by the Panama Banks in order to open an account?
This would really depend on each bank, nevertheless, according to our experience it will be necessary for the account signatory to provide personal bank references and personal commercial references, also, the bank will require documents proving the origin of the funds and documents proving the business activities of the corporation. Please contact us in order to provide the complete list of requirements usually requested by the banks in Panama. Banks nowadays are more and more often also asking documentation to verify that all the client operation is tax compliance.

Have a different question?

Feel free to email us if you have any further inquiries. We will be glad to assist and guide you through the process of incorporating your Panama Offshore Company.