Basically used for the commercial practice in general, and is the most commonly used, but the Panamanian Incorporated Companies have another series of advantages and uses. Most of interested people choose to make Incorporated Companies, since these provide a protection for their assets, minimize their taxes and provide privacy to their shareholders. At the same time, the Incorporated Companies facilitate the management of their investments locally as well as internationally.
The Panamanian Incorporated Companies are used for different purposes, from just protecting the assets keeping it out of the commerce to using it for commercial practices outside the country as business strategy (offshore companies).
In addition to the privacy provided by the Panamanian Incorporated Companies in relation to their shareholders, the banking secrecy also provide higher security when realizing bank operations.
CREATION OF A CORPORATION
It can be formed by Panamanian and/or foreign individuals, as well as other by other companies. The minimum capital is ten thousand US dollars (US$10,000.00), however, it does not have to be totally subscribed or paid. It is mandatory the Resident Agent shall be a local lawyer or law firm. The Resident Agent does not have to submit any type of report to the Panamanian Government. The function of the Resident Agent is to act as a link between the incorporated companies and the Panamanian Government in case it is required.
The requirements for the incorporation of a company are:
- Name of the company. It shall include some of the following words or abbreviations: Corporation (Corp.); Incorporation (Inc.); or Incorporated Companies (S.A.). Names in foreign languages are allowed. Name availability shall be verified with the Public Registry Office, reason why a minimum of three name options is requested, to be able to apply for the next available option in the event the previous one is already registered. A name reservation can be made for a period of 30 days that can be renewed.
- Purpose/objective of the company. The objectives may be specified, otherwise ample objectives are established.
- Authorized Social Capital, indicating the number of shares and their respective nominal value (if shares without nominal value are used, the government assigns a value of US$20.00 to each one, for the purpose of calculating the register rights, based on the authorized social capital).
- A minimum of three (3) directors, who may be individuals or other companies. For natural persons, complete names (no initials are allowed) and the address is required. For companies, the complete official name and address is required, together with a notarized or authenticated certification, issued by the proper authority of the corresponding jurisdiction, indicating that the entity is legally registered and who is the legal representative. Sometimes for anonymity purposes, the interested party prefers to take the option of a lawyer or lawy firm to provide the service as director. This option has a charge for annual charges.
- Full names of directors: president, secretary and treasurer. These may be natural persons or juridical entities. One director may occupy one or more positions. Vice-presidents and other directors are not mandatory (one person may occupy two positions). The directors and representatives do not have to be shareholders, neither Panamanian citizens nor residents in Panama.
- Extent of the company, which regularly is perpetual.
- Name and address of the Resident Agent, who shall be a local lawyer or a local law firm.
- Company address, which is a registered address.
The registration on the authorized social capital have to be paid only once at the Public Register at the time of company inscription as follows:
- US$50.00 (minimum) on the first US$ 10,000.00
- 0.75 for each US$1,000.00 on the following US$90,000.00
- 0.50 for each US$1,000.00 on the following US$900,000.00
- 0.10 for US$1,000.00 in excess of US$ 1,000,000.00
- More than US$1,000,000.00, an additional charge of 20%
The organization and registration of a corporation takes from three (3) to five (5) working days. The process is the same as in an Offshore Company, where the activities of it are executed outside of Panama, where there is not the obligation to declare or pay local taxes. Companies that have commercial activities within the Panamanian territory are required to make tax declaration as well as to have an Operation Notice (Known as Commercial License).
- The Panamanian government has established an annual tax of US$300.00 as an annual rate for companies. The delayed payments are subject to an additional charge of US$50.00, and the delay of payment of the tax for two consecutive periods causes a fine of US$300.00. The payment of this tax for companies organized during the first semester of the year is due on June 30 and for those organized on the second semester payment is due on December 31.
- The annual fees for the Resident Agent are US$250.00.
- The annual fees for the service of directors and/or representative are US$200.00 per each Director.
In the event of requiring a company with the service of directors and representatives, a General Power of Attorney is given to the interested person to act on behalf of the company. The offer (package) may include the bank account opening. If it has commercial activities in Panama, the offer is complemented with the inclusion of the Operation Notice, Municipal Registration, and Registration before the Income General Direction. It is noted that depending on the industry where commercial activity is desired to develop in Panama, additional permits may be required, such as it is for food, tourism or construction industries.
Our offer for incorporated companies include the following:
- Registration of Incorporated Companies
- Tax and registration cost
- Shares renunciation deed of subscribers
- Share certificate and minutes
- Cost: US$1450.00