Frequently Asked Questions
1. DO I HAVE TO PAY TAXES IN PANAMA FOR THE PROFITS OBTAINED FROM THE CORPORATION OR FOR THE MONEY I KEEP IN ACCOUNTS IN THAT COUNTRY? NO, income is not taxed in Panama unless the corporation carries out commercial acts in this country on a regular basis only.
2. IF I APPOINT OTHER DIRECTORS SO THAT I DON'T APPEAR, WILL THEY HAVE CONTROL OVER THE COMPANY? NO, we added a clause in the agreement that states that the directors may not act without written authorization from the shareholders of the corporation, which is totally anonymous, and they may not request information about the bank account unless they are authorized by the shareholders before the bank to do so.
3. IF I OPEN A BANK ACCOUNT AND I AM NOT A DIRECTOR OF THE COMPANY, HOW CAN I HAVE CONTROL OF MY MONEY? The purpose of the company is in its own name "Joint Stock Company", i.e. the shareholders have the control but remain anonymous; The opening of the bank account is a contract between the corporation and the bank, the corporation authorizes the persons who will sign the checkbook, who will be given the secret pin of online banking, and who will be the person authorized to act in the account with exclusive and unique rights and duties for them on behalf of the corporation, which can be the anonymous shareholders or even a third person designated, no director may act on behalf of this unless otherwise agreed in writing.
4. IF I APPEAR AS A SIGNER AT THE BANK, THEN I AM NO LONGER ANONYMOUS: NOT necessarily the bank in Panama is strictly confidential no entity anywhere in the world can request information from a bank in Panama these are not required to lift the corporate veil, to do so violate the law of anonymity which carries millionaire fines, plus criminal violations of bank secrecy, without prejudice to claim for damages, the only cases that are excepted are the information required by suspicion of money laundering or terrorism and through Panamanian authorities with summary evidence of this.
5. CAN I DO DIFFERENT BUSINESSES WITH A SINGLE COMPANY? Yes, the use has no commercial limits as long as they are legal, you can do all the business you want and anywhere in the world, you can obtain trading licenses under a single company.
6. IF I WANT TO SELL OR ASSIGN MY COMPANY TO A THIRD PARTY? You only endorse the shares you have in your possession as if you were endorsing a check and handing them over to him, in addition to registering the transfer in the share ledger and with this you make the transfer.
7. HOW SHOULD THE NAME OF A COMPANY APPEAR? R. The name for the corporation may be in any language, however it must end with the abbreviation that indicates that it is a company, usually S.A. (corporation) Corp. (corporation) Corp. or Inc.
8. Is it necessary to be personally in Panama to incorporate a corporation? R. No. According to our law, it is not necessary for the interested parties to be physically in Panama for the purpose of incorporating a corporation in our country.
9. What is the Registered Capital of the Company? R. The Registered Capital, also known as Authorized Capital, is a nominal figure which projects an estimate of the funds to be managed by the corporation. According to our law, the minimum Registered Capital to incorporate a corporation is US$10,000.00.
10. Is it necessary to pay or deposit in any way the Registered Capital of US$10,000.00? R. No, it is important to point out that it is not necessary that this capital be paid or deposited in any of its parts.
11. It is possible to incorporate a company in Panama with a Registered Capital greater than US$10,000.00. R. That is correct. If you wish you can incorporate the company with a Registered Capital greater than the US10,000.00 normally used, in this case an additional tax must be paid at the time of registration depending on the registered capital selected. It is important to note that the additional cost for such increase is considerably low.
On the payment of taxes in Panama for corporations. |
12. Is it necessary to file income tax returns with the Panamanian authorities for the corporation I have in Panama? R. No, according to our law, the corporation is exempt from filing income tax returns if the activities of the corporation are carried out outside the territory of Panama.
13. I do not carry out commercial activities in Panama, but I have a bank account in Panama, is it necessary to pay taxes on the interest or dividends generated by this account? R. No. Dividends and interest generated by your bank account in Panama are not taxable according to our law.
14. Who pays the annual fee for my company? Our firm is in charge of making the annual payments of your corporation. Each year of validity of the corporation counting from its registration you must pay the annual fee which is UYS$300.00 plus $300.00 as resident agent, if there are directors appointed by us you will pay US$200.00 for each one...You send us the money and later we send you the original voucher of payment, which indicates that your corporation is in force and up to date with its annual payments to the government of Panama (if you pay after the anniversary date you must pay a surcharge of $100.00).
15. Can I keep the books of the corporation in my country or do they need to be in Panama? Our legislation does not require that the books of the corporation be kept or maintained in Panama. You can keep these books in your country, in fact, according to our law, they do not need to be issued or stamped in Panama, therefore, these books can be obtained in any bookstore and can be kept also in electronic format. In other words, the client can acquire these books and keep the records on his own and from his own country.
16. What is the Board of Directors of the company? R. The management and administration of the corporation is carried out by the board of directors of the corporation. According to our law, the Board of Directors must be formed by a minimum of 3 persons, of legal age, of any nationality, usually these directors are also appointed as officers, normally (President, Secretary and Treasurer).
17. The identity of the 3 members of the Board of Directors of the company is Public? R. That is correct, the Articles of Incorporation of the corporation and the information contained therein, including the identity of the 3 Directors / Officers of the corporation will be registered in the Public Registry of Panama.
18. Is it necessary for the shareholders to be directors of the company? R. No. It is not necessary that the members of the board of directors of the corporation be shareholders of the corporation.
19. Can I hold the position of President, Secretary and Treasurer of my company simultaneously? A. Yes, according to our law, corporations in Panama must be formed by a minimum of 3 persons as directors, but if you wish, a single director may exercise all the functions of officers.
20. Can I appoint my own directors? R. Directors can be of any nationality and from any part of the world.
21. Is it possible to change the Nominee Directors or the Directors Appointed by me in the future? R. That is correct. It is possible to remove and change the Directors of the corporation if you wish. In this case it will be necessary to modify the Articles of Incorporation of the corporation registered in the Public Registry of Panama.
About the Company's Shareholders and the Share Certificates |
22. Is it possible to issue "bearer" certificates for the company? R. That is correct, according to our legislation it is possible to have bearer shares, but if you are going to open a bank account outside Panama, there are banks that do not allow this type of shares, so if you want bearer shares and you are going to open a bank account you should consult with your bank beforehand.
23. What is the difference between nominal certificates and bearer certificates? R. The main difference is that in bearer shares, the owner of the company is the person who physically holds the share. In shares issued in nominal form, the share certificate expressly indicates who is the owner of the company. Considering the above, it can be noted that bearer shares are more flexible and easier to transfer, however, registered shares provide greater security. It is important to note that most banks today prefer to work with registered shares.
24. Are the shareholders the highest authority of a company? R. That is correct, the Shareholders are the highest authority of the corporation, and their decisions are above the directors of the corporation.
25. Will the identity of the Shareholders be registered in the Public Registry of Panama? R. No, it is important to point out that according to our law the information and identity of the shareholders of the corporation is not registered in the Public Registry. The share certificates are issued privately and the information of the shareholders of the corporation is equally private.
We are two partners, is it possible to have two share certificates? R. That is correct. It is possible to have two or more share certificates, in this case you can issue two certificates of 50% each or for example; 80% and 20%, you can choose how the shares will be distributed.
On the opening of a bank account for the company. |
27. Can I open a bank account for the corporation in a bank outside Panama? R. That is correct. According to our law, a Panamanian corporation can open a bank account anywhere in the world or any country you wish, however, it is good to consult with your bank beforehand, since there are banks outside Panama that do not allow the corporation's shares to be bearer shares, in which case it must be indicated in order to issue nominative shares only in the corporate charter.
28. Can I open a bank account for the company with the documents that will be sent to me? R. That is correct. Our incorporation package includes all the necessary documents to open a corporate account. However, each bank has different requirements so it is possible that in some cases they may request some additional documentation, if this is the case, our Firm will gladly assist you to comply with all the bank's requirements.
29. If the bank asks me who is the owner of the company? The owner of the company are the holders of the shares, you must show if the legislation so requires the share certificate of the company where it indicates the shareholder or shareholders of the same.
30. Does your Firm provide account opening services in Panama? R. Our Firm provides the service of bank introductions for the purpose of opening a corporate account in Panama, you should contact us first.
31. If I want to modify the Articles of Incorporation or change the directors, what should I do? Any amendment to the Articles of Incorporation must be made by means of minutes of a shareholders' or board of directors' meeting or by decision of the General Power of Attorney, if any, and is recorded in the public registry.Example: increase of capital, change of directors, appointment or removal of a general power of attorney, addition or modification of clauses to the Articles of Incorporation, anything that implies modifying or adding to the articles of incorporation of the company.
Our firm is in charge of this process and the cost is US$750.00 for each certificate (includes expenses and fees, authentications and shipping to your offices).
What you should know about Corporations in Panama
There are several reasons why a company is incorporated or becomes offshore. The first one is the Tax Reduction, because when an offshore company is incorporated, the income received abroad is not taxable, which constitutes a substantial saving between 20 to 40% of the profits.
Example: if you are in the business of buying merchandise in Asia, United States, Colon Free Zone Panama, or anywhere in the world, you can buy or invoice the container through a Panamanian corporation or company, this in turn will sell the container to your company or the one that will receive the final merchandise whether it is in the United States, Venezuela, Colombia, Mexico or anywhere in the world.
The main advantage of this operation is that the purchase and sale of this container will not pay income tax, since it was made through a Panamanian company, which exonerates the payment of tax on this operation, as long as the final destination of the merchandise is not Panama.
In short, the Panamanian company will buy the container and re-invoice it to your company, which will alleviate the tax on the latter's profit. This in turn allows you to save substantial sums of money in taxes to your company in your country, which allows you to cheapen the products you export and be more competitive in the market.There are other legal methods to minimize taxes (income taxes, withholding taxes) through re-invoicing or offshore transfers. Our firm provides its clients with the necessary structure to carry out such operations, through offshore trading accounts.
We provide complete and continuous advice to our clients to make their international transactions a complete success.
The incorporation of a Panama Corporation (Offshore Corporation) is the solution. Corporations provide protection and confidentiality to your assets.
Costs of Corporations in Panama
The total cost of our firm for incorporating a corporation in Panama including expenses, authentications, taxes, shipping via currier and fees is US$1,750.00
This cost includes the following:
- All upfront costs and fees
- Fees for registration in the Public Registry, based on an authorized capital of US $10,000.00.
- Our first year's Resident Agent fees and the annual tax rate paid for the first year.
- English translation of the Social Pact. (If necessary).
- Two share certificates issued in bearer or nominative form.
- Certificate of good standing of the company.
- Curier's expenses. In case the country where the company is going to be used is a signatory of the Apostille Convention, the Articles of Incorporation, the Certificate of Good Standing and the General Power of Attorney may be authenticated at no additional cost.
ANNUAL MAINTENANCE
Nominee Directors:
For privacy purposes or if you wish to maintain anonymity, our firm can designate by name the three directors / officers required by law. The additional charge for this service is US$600.00 (US$200.00 per year).
*General Power of Attorney issued in private document:
If you require the General Power of Attorney in a separate Deed duly authenticated. There is an additional charge of US$300.00.
*Important: On each anniversary of the date of registration of the company, the following must be paid US $300.00 for the Single Corporate Tax, US $300.00 for our Resident Agent fees.
In the event that, at the client's request, our firm has appointed a Director / Dignitary, the following will be charged US$200.00 for each (Panamanian corporate law requires a minimum of 3)
Panama Corporations
Advantages of Incorporating a Corporation in Panama
The Panamanian Corporation Law presents very special characteristics, tending to facilitate its incorporation for both nationals and foreigners. Among these, the following are the main ones: The tax system in the Republic of Panama is based on the principle of territoriality of the source of income.
Therefore the profits, income, dividends of a corporation resulting from activities originating outside of Panama (Offshore) are not subject to taxation under Panamanian law.
Two or more persons of legal age, of any nationality, even if they are not domiciled in the Republic of Panama, may incorporate a corporation for any lawful purpose in accordance with the formalities prescribed in said Law.
It is not necessary that the capital stock be subscribed or paid up in any of its parts.
It is not necessary that the parties interested in the incorporation of such corporation be present in Panama. It is enough that two persons, in this case, generally members of a Law Firm, sign the Articles of Incorporation.
INCORPORATION FEES OF THE CORPORATION:
The total cost of our firm for incorporating a corporation in Panama including expenses, authentications, taxes, shipping via currier and fees is US$1,750.00
This cost includes the following:
- All upfront costs and fees
- Fees for registration in the Public Registry, based on an authorized capital of US $10,000.00.
- Our first year's Resident Agent fees and the annual tax rate paid for the first year.
- English translation of the Social Pact. (If necessary).
- Two share certificates issued in bearer or nominative form.
- Certificate of good standing of the company.
- Curier's expenses. In case the country where the company is going to be used is a signatory of the Apostille Convention, the Articles of Incorporation, the Certificate of Good Standing and the General Power of Attorney may be authenticated at no additional cost.
ANNUAL MAINTENANCE
Nominee Directors:
For privacy purposes or if you wish to maintain anonymity, our firm can designate by name the three directors / officers required by law. The additional charge for this service is US$600.00 (US$200.00 per year).
*General Power of Attorney issued in private document:
If you require the General Power of Attorney in a separate Deed duly authenticated. There is an additional charge of US$300.00.
*Important: On each anniversary of the date of registration of the company, the following must be paid US $300.00 for the Single Corporate Tax, US $300.00 for our Resident Agent fees.
In the event that, at the client's request, our firm has appointed a Director / Dignitary, the following will be charged US$200.00 for each (Panamanian corporate law requires a minimum of 3)