A company in Panama
Panama is next to the Cayman Islands and the Virgin Islands one of the oldest “tax havens.” This country of Central America is a country with very high financial freedom, and at the same time a stable legal and tax system. Therefore, establishing a company in Panama is attractive for many entrepreneurs.
Taxes in Panama
Company formation in Panama allows you to run your business in any country all over the world. Company registration in Panama is widely appreciated by foreign entrepreneurs due to the lack of taxation of income of foundations and offshore companies generated outside of Panama.
At the same time, this means that if such economic activity is also not taxed in the country of its actual conduct, the business in Panama is completely exempt from income tax.
Accounting in Panama
Accounting is not mandatory in Panama due to the lack of taxation. However, the bank where the account was opened may in some cases request an invoice explaining certain transactions.
Share capital and shares
Panama Corporations do not have to comply with any maximum or minimum capital requirements. The standard capital in is USD 10,000, but there is no obligation to make a deposit within the specified time. In practice, this creates the possibility of establishing a company with capital worth of USD 1. It is not required to cover real share capital nor issue the shares however the shareholders may decide to issue registered or bearer shares with mandatory supervision.
Directors, board members and shareholders
Business in Panama allows not only natural person but also legal person to assume function of director of Panama Corporation, including the trustee director. In the final instance, the natural person who signs the articles of incorporation may be a local lawyer who cannot disclose his principal. However, the actual owners of a company in Panama are holders of share documents. To open a company in Panama it is required to appoint at least three directors. Any change of directors or officers must be notified to the public register. Directors, officers and shareholders may be of any nationality and reside in any country. The company’s directors and employees are not obliged to act as shareholders. Shareholder meetings can take place in any country. However, shareholders may be represented by issuing a power of attorney or communicate with each other by any electronic means. The only publicly available document that indicates the company’s ownership status are the articles of incorporation, which indicate the first members of the management board of the company – where such members of the management board may be the nominee directors acting on behalf of third parties that are not disclosed in the registers.
Opening a company in Panama is associated with the fact that it is not mandatory to issue annual or financial reports or to convene annual meetings of shareholders or directors, unless: the company has been registered with the tax office.
In Panama, there is a very wide catalog of names to use for your company. The terms may be used, i.e. Corporation, Incorporated, Societe Anonyme, Sociedad Anonima, Inc., A.G., CORP.
Company books, protocoles and orders can be stored anywhere or in accordance with the director’s instructions.
Corporate seal and apostille
The company seal is not mandatory. Apostille can be used to certify documents for legalization purposes. This can also be done at your local consulate.
Establishing a company in Panama and legal activities
To open a business in Panama it is required to ensure the legality of its operations in both Panama and the country in which it will operate. The creation of a foreign company should not and cannot be used to legitimize illegal activities.
Ready-made company in Panama
It is also possible to buy a company in Panama that is already registered. As a rule, a ready-made company in Panama exists for a relatively short time, has not conducted any activity before and was created for its subsequent sale. However, due to the legal regime of companies in Panama, the purchase of a company in Panama may prove unprofitable.