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Panama

Excelling as a tax-planning instrument, Panamanian corporations are widely known and used throughout the world. Panamanian corporations offer many tax benefits when used as Offshore Corporations, also taking into account that the Republic of Panama is considered a tax haven country.

Established as an offshore corporation, Panamanian corporations are also commonly used as the perfect asset protection tool since Panamanian corporations can function as a holding company or own assets kept anywhere or real estate property located in any country without having to pay taxes in Panama for those properties held outside.

Advantages

  • No obligation to pay income tax when its income is obtained from a source outside Panama. So, no income tax will be paid for offshore operations or activities
  • Maintenance costs, including annual corporate taxes and resident agent fees are only USD 550.00
  • Shareholders may be Panamanians or foreigners and may even be Panamanian or foreign corporations
  • No nationality or residence requirement for the Panamanian corporations’ Directors and Dignitaries
  • Meetings of the stockholders assembly or the Board of Directors may be held anywhere in the world and can be held via telephone, fax, email or any other electronic method
  • Corporate assets or capital of a Panamanian corporation may be kept outside Panama
  • Panamanian corporations may have any licit objectives and carry out any commercial or industrial activity. Corporate objectives do not need to be explicitly expressed in the Articles of Incorporation, while Panamanian Law on Corporations allows having general corporate objectives
  • One person alone can be owner of 100% of the corporate stocks comprising the entire corporate capital of a Panamanian offshore corporation, after its incorporation and registration.

Company Incorporation

Incorporation time

Panamanian corporations may be incorporated in just five days. As ordered by law, the Articles of Incorporation must, at least, contain the following information:

  • Name of the Corporation
  • Name and domicile of the subscribers of the corporation
  • Corporate objectives
  • Corporate Capital (a description of the amount, if the corporation has par value or non par value stocks, number of stocks, distribution, classes, etc.)
  • Duration of the corporation, which can be perpetual
  • Name and complete address of directors and dignitaries
  • Name and address of the Resident agent

Corporate Capital

Panamanian corporations are not required to have a paid capital to be valid after its incorporation and these corporations may issue nominative or bearer stocks. When corporate stocks are issued to the bearer, share in the corporate capital corresponding to those stocks issued to the bearer is presumed paid.

Any kind of person, a natural person or other corporation or company, can become a holder or owner of the corporate stocks, with no need for having legal residence or being present in the Republic of Panama. Any nominative stock may be issued in favour of more than one person.

Tax Benefits

Panamanian Corporations are subjected to a territorial tax system, a regime that only requires payment of taxes for operations done or considered done within the territory of the Republic of Panama. Under Panamanian Tax Law, commercial operations executed, taking place, or taking effects outside Panama will be considered offshore and are not taxable, without considering that these operations may be managed or directed from an office located in Panama. Except for the annual corporate tax in the amount of USD 300.00 that all corporations and private interest foundations must pay, there would be no other tax obligations for Panamanian offshore corporations.

Annual Returns

Panamanian corporations have the obligation to pay annual corporate taxes in the amount of USD 300.00, while only the first annual tax is USD 250.00.

For corporations registered between January and June, June 30 of each year, will be the deadline for the annual tax payment, while for corporations registered between July and December, December 31 will be the deadline for paying annual corporate taxes. For this purpose, registration date is that of the inscription in the Public Registry, as written in the stamped seal at the end of the Articles of Incorporation.