Advantages of Panama Incorporation

Panama has a number of unique features that make this a great asset protection jurisdiction for corporations.

Important features:

  • No restrictions on nationality.
  • No requirements to disclose ownership.
  • No restrictions concerning ownership of shares.
  • No residence requirements for Directors/Officers.
  • No paid up capital requirements.
  • No income tax, if income is produced outside Panama.
  • Total tax exemption on all and any business activity or transaction carried on outside the jurisdiction.
  • No exchange controls.
  • No requirements to file annual Financial Statements.
  • No requirement to hold annual General Meetings of Shareholders or Directors.
  • Total Secrecy and Anonymity.
  • Reasonable Annual Registration Tax and Resident Agent Fees.
  • Articles of Incorporation may be done in any language.

The major advantages of a Panamanian Corporation:

  • The freedom to appoint directors and officers of a any nationality and country of residence.
  • The freedom to appoint nominee directors and officers (provided by by our associates in Panama).
  • The legal protection afforded for the confidentiality of business and banking transactions.
  • The tax exemption status provided to offshore companies.
  • The complete anonymity afforded to owners of Panamanian Corporations through the use of bearer shares.
  • The freedom of capital movement in and out of Panama and the absence of regulatory supervision.

Taxes

Offshore derived Income is not taxed and does not need to be reported. You can have a Panama Corporation, and/or Foundation that banks in Panama and has an office in Panama and yet will not pay any Panama taxes if all the income is derived from offshore.

Bearer Share Corporations - S.A

Bearer share corporations allowed in Panama. They are referred to as an S.A. Corporation having this designation after the corporate name. This means the ownership of the Corporation is not recorded anywhere just the directors - which can be nominee directors provided by us.

The owner has the stock certificates of the company which can be transferred privately as often as needed with no reportage of the new owners. No one need know who owns the corporate shares except the original owner and new owner.

Corporate Law

Corporations in Panama are governed by Law 32 of February 26, 1927. Two or more persons of legal age, not necessarily Panamanian citizens or residents of the Republic of Panama, may form a corporation for any lawful purpose. It is not necessary that the capital be even partially held by Panamanians. Under Panama's Corporation Law it is possible to organise a corporation owned by only one person. Subscription to all or any percentage of the capital stock is not required. It is acceptable for incorporators to agree to the subscription of stock shares. The usual practice is to state that each incorporator agrees to subscribe to one share.

Law 32 of 1 927 requires a minimum of three officers (a president, a treasurer, and a secretary) and three directors. However, one person may hold two or more offices. It is not necessary that the directors or officers be Panamanian nominees or shareholders. Finally, it is not even necessary for the interested parties to be present in Panama for the purpose of organizing a corporation.

Panama Bearer Share Corporation Advantages

Under Panama law a bearer share corporation can be incorporated that is owned by the possessor of the physical certificates of stock with no recorded owner on record anywhere. This is a bearer share corporation. In Panama there is no registry with any ownership records for a bearer share corporation.

No Corporation Ownership Registry in Panama

The lawyer in Panama may only have knowledge of the person who incorporated the company but not knowledge of others he may have transferred the corporation to since formation. Such transfers need not be reported and the new owner(s) need not be on file anywhere. They just need to physically have the shares of the corporation. The transfer process could be completed in minutes. The new owner(s) may reside outside Panama. The new owners could be a corporation, foundation or be a trust in another country, etc. making any trails extremely difficult, time consuming, expensive and in general for most people not feasible to follow especially when you consider that no one really knows how many times the ownership may have been transferred. The nominee Directors can be appointed and thus are not owners and their names are recorded publicly. We provide the three required directors for you complete with signed undated letters of resignation and they do not know who you are. You can effectively transfer the stock certificates privately with no record of the sale appearing anywhere. The new owner can replace the directors with his own directors at will.

Panama Corporation Unique Tax Benefits

One benefit is there is no tax imposed by Panama on any offshore derived income and there is not even a need to file any tax returns for the corporation if all the income was offshore derived. If you maintain an office in Panama, have a phone in Panama, have a Panama Corporation, and even have a bank account for the corporation in a Panama Bank yet there is still no need to pay taxes or even file tax returns if all the income is offshore sourced. In other words your income comes from payments made to you in Panama from entities not in Panama. For example if you decide to open a hot dog stand in Panama then you would need to pay taxes on this income since it would be derived from within Panama. If you sold goods to customers who were not in Panama and they wired you money into your Panama bank account from outside of Panama this would be offshore derived non-taxable income.

Panama Corporation Privacy

There is no registry in which to record owners of Panama Bearer Share Corporations. There is also no registry to record transfer of the corporation ownership. Even if one had a court order or subpoena from a Panama Court there is no registry to serve the court order on. To transfer the ownership of the Bearer share Corporation one need only hand the new owner the stock certificate.

Panama Corporation and Real Estate Ownership

Anonymous Panama Corporations may own property anywhere in the world. To sell the property one merely transfers the shares of the corporation along with a bill of sale signed by the nominee directors who don’t know who you are. This could reduce taxes resulting from the sale of the property, since the property is not really being sold it is the corporation that owns the property that is being sold, the property is still owned by the same corporation. Remember there is no reportage of the sale of the corporation required in Panama. A Panama Corporation (or Foundation) can own real estate anywhere in the world and this makes the ownership anonymous. The Panama Corporation can own income producing property anywhere in the world and could collect rents (if the property is not in Panama would be tax free income to the corporation), hire property managers, etc.

Panama Corporation as a Holding Company for Intellectual Property, Copyrights, Patents or Royalties

The Panama Corporation can purchase or own these rights to use or sell licenses to this property. You could transfer these rights to the Panama Corporation in return for an annuity or other property the corporation may transfer. This could have tremendous asset protection value since the assets of the corporation belong to the corporation, not you.

Additional Advantages of Company Formation in Panama:

  • Yearly fees Panama Government charges for a non-resident Panamanian Corporations is low.
  • There is no taxation in Panama on any transaction or business activity taking place outside of Panama.
  • Panama requires no minimum amount of capital for opening a S.A. Corporation.
  • No paid up capital required.
  • There is no law requiring disclosure of the beneficial owner(s).
  • No requirement to file any annual returns or financial statements.
  • For a S.A. Corporation in Panama the shares may be issued in physical bearer share form with or without any par value assigned to the shares. The only documents publicly recorded are the articles of incorporation which typically will list the officers and directors who are not owners, plus the registered agent (the registered agent who was on record at the time the incorporation was filed. The actual owners (possessors of the bearer shares) do not appear in any public record of any sort.
  • Annual general meetings of either shareholders or directors of the corporation are not mandated or required and can be held anywhere in the world even online.
  • The corporate bookkeeping/financial records of the Panama Corporation can be stored anywhere in the world which makes legal discovery difficult to say the least especially if they are encrypted and stored on a server somewhere in the world.
  • With a Panama S.A. corporation the registered agent does not have any obligation to keep or maintain any records for the corporation, this makes legal discovery difficult to say the least especially when the registered agent is a lawyer so attorney client privilege is now entered into the equation.
  • Panama SA Corporation complete including incorporation papers, nominee directors, taxes for first year, translation, nominee directors resignation letters, resolution from the board of directors authorizing the opening of the bank account, etc. and this includes the Panama Bank Account opening without having to come to Panama.