The Panamanian Corporation
Investors around the World prefer the Panama S.A. Corporation due to the different advantages offered for investment and privacy. Panama’s corporation are used every day in modern commercial activities such as legal affairs, minimize tax issues, insurance matters and others.
Since the year 1927, the Republic of Panama has a special law regarding corporations. The Panamanian Company Law encompasses all the important aspects pertaining to this type of moral person, without making distinction amid the place were the company carries out its’ activities or amid the source of it’s income, this is to say, the Panamanian Law does not distinguish amongst "in-shore" and "off-shore" companies. Panama has been able to invigorate and to ameliorate the corporation Law throughout time by means of decrees and ordinances; managing to keep intact it’s simplicity. The Panamanian Company Law respects the principle of free will in private matters, and it is materialized in the Articles of Incorporation of each company.
The Panamanian tax system is based on the principle of territoriality, this is to say, every company, be it Panamanian or foreign, which carries out activities and/or obtains income from a Panamanian source is subject to every applicable tax regulation and to the payment of a fixed annual tax of US$250.00 dollars for the first year, thereafter the amount is US$300.00. as of the date of incorporation. On the other hand, Companies that do not engage in business activities within the Panamanian territory and which do not obtain income from a Panamanian source, are only subject to the fixed annual tax previously stated.
It’s important to point out that the fees to incorporate a Panama Corporation or Foundation are accessible to everyone and the registration fees are tied to the amount of the estimated investment capital.
Panamanian Company Law is simple it allows the incorporation, administration and amendment of articles of incorporation. At the same time, the Law allows the redomiciliation of corporations to other jurisdictions.
Panama defends the client-attorney privilege as long as the issues arising from each particular case are in accordance with the Law, public order and with the good moral habits. The attorneys are obliged to know their clients and have the means to identity them.
Two or more persons, from any country, with or without being domiciled in the Republic of Panama, may create a Panamanian corporation, for the accomplishment of any lawful objective, having to comply solely with the conditions required by the Law. It is important to point out that incorporation is considered a commercial act, requiring that the subscribers have legal capacity to do so.
The Articles of Incorporation may be subscribed in the Republic of Panama or in any part of the world and said document may be prepared in any language. The formalities required by the Panamanian Law for incorporation are:
- The name and address of the subscribers of the Articles of Incorporation.
- The name or identification of the company, which may not be identical to that of an existing company. The name may be expressed in any language and it shall always contain a word, phrase or abbreviation that indicates that a corporation is being created, for example: Corporation, Corp., Sociedad Anónima, S.A., Incorporated, Inc., A.G., etc. If the company is intended to carry out banking activities, insurance activities, to function as a trust or as a trustee, a word or phrase indicating the above mentioned activities needs to be added, for example: Bank, Banco, Insurance, Risk Management, etc. However in order to carry bank or insurance activities, the corporation may be subject to other requirements and prices will be different.
- The objectives and purposes for which the company is created. The Law does not require an exhaustive enumeration of all the objectives and purposes pursued by the company. If the company is intended to carry out banking activities, insurance activities, to function as a trust or as a trustee, these activities have to be clearly mentioned in the Articles of Incorporation.
- The amount of the company’s authorized capital, the way in which it is to be divided and the value of the shares of stock . The authorized capital may be expressed in any legal currency and the shares that compose it may have or may not have a nominal value. It is important to note that there is no obligation to disburse the capital in order to start with the activities of the company.
- The qualification of the shares of stock which integrate the company’s authorized capital (nominative, to the bearer or both), their different classes and categories if they exist and the special rights and obligations for each particular case.
- The amount of shares of stock each subscriber is engaged to subscribe.
- The domicile of the company. Normally the domicile indicated is that of the company’s Registered Agent, however, the company may celebrate its meetings and its assemblies in any part of the World.
- The duration of the company, it may be limited or unlimited.
- The number, name and domicile of the Directors and of the Officers. The Law requests the existence of at least three (3) Directors, which may be physical persons or legal entities, from any nationality and do not need to be shareholders. The Minimum Officers that the company shall have is also three (3), this is to say: a President, a Secretary and a Treasurer. However there is no restriction that one person may hold various officer positions. A special signatory right (individually or joint) may exist as long as it is included in the Articles of Incorporation or in a document that needs to be registered in the Panama Public Registry.
- The name and domicile of the Registered Agent, which shall be an attorney or a law firm in the Republic of Panama (that will be us).
- Any other lawful clause, which the shareholders or the subscribers require.
Once all of the above mentioned formalities have been met, the document is presented to a Notary Public of the Republic of Panama, who will prepare a Public Deed based on the document, which is afterwards registered in the Panama Public Registry. The corporation will deploy its effects in relation to third parties as of the moment of its registration in the Panama Public Registry.
We can supply you with “nominee Director ” and/or “nominee Officer ” following your instructions.
We currently have a group of incorporated companies, which may be modified according to your instructions in a short period of time.
Please do not hesitate to contact us if you have any questions. |
