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Panama

Introduction

Panama officially called the Republic of Panama, is a country in Central America.

It is bordered by Costa Rica to the west, Colombia (in South America) to the southeast, the Caribbean Sea to the north and the Pacific Ocean to the south. The capital and largest city is Panama City, whose metropolitan area is home to nearly half of the country's 4 million people. The total of area in Panama is 75,417 km2.

Population:

Panama had an estimated population of 4,034,119 in 2016. More than half the population lives in the Panama City–Colón metropolitan corridor, which spans several cities. Panama's urban population exceeds 75%, making Panama's population the most urbanized in Central America.

Language:

Spanish is the official and dominant language. The Spanish spoken in Panama is known as Panamanian Spanish. About 93% of the population speak Spanish as their first language. Many citizens who hold jobs at international levels, or at business corporations, speak both English and Spanish.

Political Structure

Panama's politics take place in a framework of a presidential representative democratic republic, whereby the President of Panama is both head of state and head of government, and of a multi-party system. Executive power is exercised by the government. Legislative power is vested in both the government and the National Assembly. The judiciary is independent of the executive and the legislature.

Panama has successfully completed five peaceful transfers of power to opposing political factions.

Economy

Panama has the second largest economy in Central America and is also the fastest growing economy and largest per capita consumer in Central America.

Since 2010, Panama has been the second-most competitive economy in Latin America, according to the World Economic Forum's Global Competitiveness Index.

Currency:

The Panamanian currency is officially Balboa (PAB) and United States dollar (USD).

Exchange Control:

There are no exchange controls or restrictions on the free movement of currency.

Financial services industry:

Since the early 20th century, Panama has with the revenues from the canal built the largest Regional Financial Center (IFC) in Central America, with consolidated assets more than three times Panama’s GDP.

The banking sector employs more than 24,000 people directly. Financial intermediation contributed 9.3% of GDP. Stability has been a key strength of Panama's financial sector, which has benefited from the country's favorable economic and business climate. Banking institutions report sound growth and solid financial earnings.

As a regional financial center, Panama exports some banking services, mainly to Central and Latin America, and plays an important role in the country's economy.

Corporate Law/Act

Panama has a civil law system.

Governing corporate legislation: The Panama Supreme Court of Justice is the governing authority and companies are regulated under the Law 32 of 1927.

Type of Company/Corporation:

Panama is one of the most well-known and recognised offshore jurisdictions worldwide thanks to its high level of confidentiality and highly efficient registry. We offer incorporation company in Panama with the type Non Resident.

Business Restriction:

Panama company cannot undertake the business of banking, trusteeship, trust administration, insurance, assurance, reinsurance, fund management, investment funds, collective investment schemes or any other activity that would suggest an association with the banking, finance, fiduciary, or insurance businesses.

Company Name Restriction:

A Panamanian corporations must end with the suffix Corporation, Incorporated, Sociedad Anónima or the abbreviations Corp, Inc, or SA. They may not end with Limited or Ltd. Restricted names include those that are similar or identical to an existing company, as well as names of well-known companies incorporated elsewhere, or names that imply government patronage. Names including such words as the following or their derivatives require consent or a licence: “bank”, “building society”, “savings”, “insurance”, “assurance”, “reinsurance”, “fund management”, “investment fund”, and “trust” or their foreign language equivalents.

Company Information privacy:

Upon registration, the company directors' name will appear in the register, available for public inspection. Nominee services are however available.

Incorporation Procedure

Just 4 simple steps are given to incorporate a Company in Panama:
  • Step 1: Select basic Resident/Founder nationality information and other additional services which you want (if any).
  • Step 2: Register or login and fill in the company names and director/ shareholder(s) and fill in billing address and special request (if any).
  • Step 3: Choose your payment method (We accept payment by Credit/Debit Card, PayPal or Wire Transfer).
  • Step 4: You will receive soft copies of necessary documents including: Certificate of Incorporation, Business Registration, Memorandum and Articles of Association, etc. Then, your new company in Panama is ready to do business. You can bring the documents in company kit to open corporate bank account or we can help you with our long experience of Banking support service.
* These documents required to incorporate company in Panama:
  • Passport of each shareholder/beneficial owner and director;
  • Proof of residential address of each director and shareholder (Must be in English or certified translation version);
  • The proposed company names;
  • The issued share capital and par value of shares.

Compliance

Capital:

The standard authorised share capital for a Panamanian company is US$10,000. The share capital gets divided into 100 common voting shares of US $100 or 500 common voting shares at no par value.

The capital may be expressed in any currency. The minimum issued capital is one share.

Share:

Share Capital does not have to be paid into a bank account before the incorporation. Shares may be of par or no par value.

Director:

Both corporations and individuals may act as directors and we can supply nominees if required. Directors may be of any nationality and need not be residents of Panama.

Panamanian companies are required to appoint a minimum of three directors.

Shareholder:

The minimum number of shareholders is one, who may be of any nationality. The name of the shareholder is not required to be registered in the Panamanian Public Registry, providing you with complete confidentiality.

Taxation:

Non-resident Panama Corp. is 100% tax-free on its activities outside of Panama. An annual corporate franchise fee of US$250.00 is charged to maintain the Panama company in good standing.

Finance statement:

There is no requirement to prepare, maintain or file financial statements for offshore Panama companies. If the directors decide to maintain such accounts, they may be done anywhere in the world.

Local Agent:

A company secretary must be appointed, who may be an individual or a company. The company secretary may be of any nationality and need not be a resident in Panama.

Registered Office and Registered Agent

A Panamanian registered office is required for your company. Panamanian law requires all companies to have a resident agent domiciled in Panama.

Double Taxation Agreements:

Panama has treaties for the avoidance of double taxation in force with Mexico, Barbados, Qatar, Spain, Luxembourg, The Netherlands, Singapore, France, South Korea and Portugal. Panama has also negotiated, signed and ratified a tax information exchange agreement with the US.

License

License Fee & Levy:

Government Fee US$ 650 include: Submission of all documents to the Financial Services Commission (FSC) and attending to any clarifications on the structure and applications required and submission of application to the Registrar of Companies.

Payment, Company return date Date:

Directors' Report, Accounts and annual returns are not filed in Panama. In Panama they do not file tax returns, annual returns or financial statements - There is no need to file any tax returns in Panama for the company if all the income was offshore derived.

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