Gem Torres y Asociados Derecho Corporativo y Comercial

Panamanian Corporations Guide

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Panamanian Corporations are regulated by Law No. 32 of 1927.

 

 

A. General Information on Panamanian Corporations

Panamanian Corporations can be used for the following purposes:

  • Holder of bank accounts, fixed deposits, investment plans and any other financial or commercial title.
  • Owner of the shares of other companies or legal entities.
  • Owner of apartments, houses, buildings, vessels and any other movable or immovable property or goods.
  • Manager and promoter of international business transactions.
  • International leasing of vehicles, machinery, vessels and others.
  • Adequate instrument for borrowing or lending money, paying or receiving commissions, royalties or others.
  • Marketing and promotion of products and services.
  • Other commercial and financial activities.

 

B. Advantages of Panamanian Corporations

Incorporating a Panamanian Corporation is a simple and expeditious procedure, and has wide range of benefits such as the following:

  • There is legal protection based on the principle of confidentiality of bank accounts and bank transfers.
  • No requirement to file annual returns or financial statements.
  • No requirement to hold annual general meetings of shareholders or directors.
  • Full exemption from taxation for any business activity or transaction carried out outside Panama.
  • Speedy incorporation procedure and simple ongoing administration.
  • Reasonable formation and maintenance costs and fees.
  • No minimum or maximum capital requirements.
  • No paid-in capital is required.
  • Panama corporations may engage in any lawful business in any country and may carry on transactions in whatever currencies they choose.
  • Nominative or bearer shares at owner’s option.
  • Shareholders, directors and officers may be of any nationality and may be residents of any country.
  • Neither the directors nor the officers need to be shareholders.
  • Shareholders, directors and/or officers can be either corporate entities or natural persons.
  • Shareholders and directors may hold their meetings in any country and may attend such meetings by proxy or by any electronic means (phone, fax, etc).
  • The accounting books, records and minutes of the company may be kept in any place or country.
  • Use of Apostille if the documentation needs to be legalized. Legalization through a Consulate is also available for some countries.
  • Incorporation documents may be drafted in any other language together with their Spanish translation.

 

C. Requirements for incorporating a Panamanian Corporation

Any client interested in forming a Panamanian Corporations shall provide the following information, either by phone, fax, or electronic mail:

1. Name of the Corporation

It is advisable to provide us with three names of choice (in order of preference) in case the first preference is already registered in Panama. The name may be in any language and must include one of the following words or abbreviations: Corporation, Corp., Incorporated, Inc., Sociedad Anónima or S.A.

2. Directors

There must be at least three directors, providing there complete names and addresses. The Directors may be individuals or corporations of any nationality and residents of any country.

3. Officers (President, Treasurer, and Secretary)

In most cases the Company Directors also hold the position of Officers and vice versa. More than three Officers may be appointed. Any Officer may hold more than one position; however, it is advisable that the President does not also hold the position of Secretary. 

4. Main Objects

Clients may provide us a general indication of the type of business in which the company will be engaged, since Panamanian Law allows corporations to undertake any lawful business that is not specifically illegal or licensable, even though the nature of such business need not be specified in the Articles of Incorporation.

5. Authorized Capital

There are no paid-in capital requirements, which mean that the corporation can exist without unnecessarily tying up funds until they are actually needed. There is no requirement insofar as a correlation between the corporation’s paid-in capital and the value of its assets, therefore the assets may well be considerably greater than the paid-in capital. 

We normally advise our clients to form their companies with a capital of US$10,000.00, which is the maximum capital to which the minimal duty applies, divided into one hundred shares of US$100.00 each. It is necessary to state whether the shares should be issued to the bearer (the identity of the shareholder is not registered) or the name of the registered holder (the name of the shareholder is revealed).

6. Name and Address of the Correspondent

Full names, titles, and addresses of any persons other than the sender, authorized to give instructions in matters pertaining to the corporation, and the full name, position, and address of the person responsible for paying the Annual Filing Fee, and the fees for Resident Agent and Officers and Directors.

 

D. Incorporation and Registration

Once the required information is received, it takes only five working days to establish and register the Corporation, provided that the name of choice is acceptable to the Registrar, and that our standard articles of incorporation are used.

It is allowed to reserve for thirty days a corporate name before the Public Registry of Panama. In cases when documents are required with haste, we can send the corporate documentation by courier, which will add approximately US$60.00 to incorporation costs.

 

E. Corporate Services

  • Corpotarion name check.
  • Preparation, protocolization, and filing of Articles of Incorporation.
  • Preparation of Registration Forms.
  • Payment of first Government Filing Fee.

 

F. Corporate Documents

Each Corporation includes the following books and documents:

  1. Articles of Incorporation, recorded by a notary public, registered, and translated by an authorized translator.
  2. Certificate of Incorporation.
  3. Registered transfers of subscription.
  4. Share Certificate Registry Book.
  5. Board Resolution authorizing the issuance of Share Certificates.
  6. Issued Share Certificates.
  7. First Annual Government Filing Fee Receipt.
  8. CD with business form and template.

 

G. Annual Fees

Once the company is established, there is only an annuity payable to us as Resident Agents of the Company in the Republic of Panama. (It is a legal requirement that all Panamanian corporations must have a local attorney as Resident Agent.)

If our firm provides Nominee Directors/Officers, an additional yearly fee per Director/Officer, will be charged.

 

H. Additional Services

  • Resolution to open a bank account.
  • Resolution to rent an office.
  • General Power of Attorney.
  • Minutes of Board Meetings.
  • Receipt and forwarding of correspondence.
  • Use of our telephone and fax numbers on the company’s letterhead.
  • Opening and management of corporate bank accounts.

The fees for these additional services depend on the extent of the work involved.

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