Panama - Company Incorporation

Panama Compan y Incorporate

Incorporate Procedure in Panama

To incorporate a company - to execute the Articles of Incorporation in conformity with the laws of the Republic of Panama, the following data must be furnished:

  • Name of the corporation and must indicate that it is a corporation by adding to it S.A. or Inc., or Corp.
  • Its general object or objects.
  • The amount of its capital and the number of shares of stock into which it is divided may be expressed in the currency of any country.
  • Since the shares of capital stock may be par value or non par value, when the shares are without par value, that amount of the capital need not be mentioned, but it will be necessary to state the total amount of shares of stock that the corporation is authorised to issue.
  • Whether the corporation may issue its certificates of shares to bearer, or on nominative form, or either way.
  • If the corporation is to issue shares of different classes: the number of shares of each class and the designations, preferences, privileges, voting rights, restrictions and requisites of the shares of each class of the statement that said designations, preferences, privileges, voting rights, restrictions and other requisites may be determined by a resolution adopted by the majority of the Directors.
  • The names and addresses of the Directors of the Corporation, which may not be less than three, and who need not be stockholders and may have any nationality and be residents of any country.
  • The names of the first officers of the Corporation which need not be directors or stockholders, and may have any nationality and reside in any country. The law requires corporations to have at least a President, a Treasurer and a Secretary, but one person may serve in more than one of said capacities.

Advantages of a Panamanian Corporation

  • Setting up a corporation takes, once the required information is received, approximately 24 hours for its incorporation and four days to be registered at the Public Registry.
  • A fixed number of stockholders is not required by Panama law for the corporation to exist. Therefore, it may be wholly owned by a single person.
  • All the shares of stock of the corporation may be issued to the bearer. In that event, there would be no official record of, nor the need to disclose, the identity of the stockholders.
  • The capital of the corporation need not be paid at the time of the incorporation. Thus, it is possible to have the corporation in existence without unnecessarily tying up funds prior to the time in which these are really needed.
  • Panamanian law does not require any correlation between the paid in capital and the value of the assets of the corporation. Thus, a corporation with a paid-in capital of US$10.000.00 may have assets worth several millions.
  • The Directors and officers of the corporation need not be Panamanians, may have any nationality and may be residents of any country.
  • The Board of Directors must be composed of at least 3 members which is the minimum established by law but any higher number of Directors may be appointed.
  • The meetings of the Board of Directors of a Panamanian corporation may be held in any country.
  • The Directors of the corporation may attend the meeting of the Board of Directors personally or by proxy.
  • The meetings of stockholders of the corporation may be held in any country.
  • The stockholders of the corporation may attend the meetings of stockholders personally or by proxy.
  • The corporation may engage in any lawful business, even if it is not similar to any of the objects of the corporation specified in the articles of incorporation.
  • The corporation may, according to Panamanian Law, undertake any kind of lawful business in any country outside of the Republic of Panama.
  • Corporations only have to pay income tax in Panama for income derived from sources within the territory of the Republic of Panama, regardless of the place in which it is received by the corporation.
  • Income obtained from business effected outside the territory of the Republic of Panama is not income derived from a source within Panama, and therefore, is not taxable under Panamanian Law.
  • A Panamanian Corporation engaging in business in the Republic of Panama and also in other countries, will only pay income tax in Panama on the part of its income obtained from business transacted in Panama.
  • Panamanian legislation does not tax dividends received by corporations, if said dividends are paid out of income produced outside the Republic of Panama. Therefore, a Panamanian corporation receiving dividends from another corporation paid out of income produced outside of the Republic, is not subject to tax in Panama.
  • Employees, Officers or Directors of a Panamanian Corporation residing in foreign countries do not have to pay income tax or any other tax in Panama on the compensation which they receive for their services.
  • Panama has not entered into any tax treaties with other countries.