PANAMA CORPORATION – PROCEDURES – BENEFITS AND ADVANTAGES
Panama Corporation with bank account is a simple and fast procedure.
Meaning
Every time you want to start a business in Panama, the first step is the creation of an anonymous society, or SA. The corporation is named S.A. (in Spanish: Sociedad Anónima) because the owner, or owner thereof, is held under complete anonymity as this does not appear on the public registry of Panama; it is something that only appears in the shareholder’s documents, which are private documents of each business.
The corporation requires a minimum of three directors, usually a president, a secretary, and a treasurer, who are all appointed. The directors of the company do not necessarily have to be the real owners of the corporation. Their function is to represent the company, and they appear on the public registry of Panama.
The resident agent of the company
The resident agent of the corporation is the lawyer or law firm that represents the company. This agent carries the theme of the single annual fee and is responsible for the annual maintenance of society. And it is usually done once a year to remind the customer to pay the annual fee. Importantly, the resident agent has no responsibility for the actions of society. Neither the directors of the company
Panama Corporation Tax: Annual Rate
The companies pay the government of Panama an annual rate of 300 USD. It is important for the companies to pay these taxes because the banks and government institutions will ask for the good standing certificate of the corporation. To proceed with any proceeding or need to be licensed, you must be up to date. In addition, a defaulting company paid a penalty of $50 per year.
Foreign clients
For all foreign clients of any nationality, it is not necessary to come to Panama for the constitution of the corporation. We designate the figures of two subscribers, and once society makes them waive this right, If it is important to come to Panama for a bank interview for the bank account, we also support the opening of the bank account for our clients.
The difference between a corporation and an offshore company is basically the same; the difference is that an offshore company is managed from abroad.
Thousands of offshore companies in Panama are recorded annually from all over the world, and the reasons are many, including tax savings.
An offshore company is usually accompanied by a bank account, and we support our customers in opening accounts in the best banks in Panama.
Panama Corporation Law, Law No. 32 of February 26, 1927
Corporations are governed by Law 32 of February 26, 1927, which is considered a fairly flexible law.
Panama Corporation Benefits and Advantages
- For companies that operate out of Panama, it is not necessary to pay income tax on income from sources outside of Panama; the territoriality principle applies. While all transactions are developed and Panama capitalizes on the tax revenue, payment of the same will not be necessary.
- The annual maintenance cost of the company is relatively low; the annual fee is 300 USD, and the maintenance payment for the resident agent or attorney is only 300 USD, giving a total of USD 600.00.
- The shareholders or members of the company may be foreigners and may also be other foreign or Panamanian corporations.
- The directors of a Panamanian corporation can be from any country; they need not be Panamanian.
- The company and its capital may be located outside of Panama.
- One person can own 100 percent of the shares of the company.
Panama Corporation Requirements
It’s simple to create a corporation in Panama.
We, as a law firm, will deliver you a form by mail that the client must send with a completed copy of the passport. You will be the main shareholder of the company.
The questions on the form are the same as below:
Name: The customer must provide the attorney with three possible names, which the society will look up in the Panamanian public register in that order to see if the names are available.
Abbreviations: The name of the company may end up with the 3 following acronyms: Corp., SA, and Inc., all of which represent the same, and the customer can choose any of the 3 stands for society.
Activity: The activity or activities that will be developed by society.
Directors: Provide three directors and their positions in the corporation.
Capital: The minimum amount required to establish a society’s capital is $10,000, but this is only on paper and does not have to be proven.
The company’s capital is variable, and each company can be formed with capital equal to the quantity that the company will have.
The cost of the corporation fees varies depending on the company capital, since the payment for entry registration fees is assessed based on the amount of such capital.
Panama Corporation processing Time: The time it takes for the establishment of a corporation is 3–5 business days. After that, we will send you the document via DHL.
Responsibilities
It is important to understand who is responsible within the corporation.
According to Law 32, the company directors don’t have criminal or civil responsibility; those who are responsible are the owners or shareholders in that corporation. But you have to understand the following: it is the directors of a company who represent it; they are the ones who appear in the public registry. They are the ones who show their faces, and their names are registered. Therefore, we must understand that their figure is important, and it is precisely the directors who control all the movements in a society.
Actions that cannot be carried out without the approval of the directors.
You cannot open a bank account without their approval. No acts or changes can be made within the company without their approval.
It is precisely the president of a company who is authorized to open bank accounts in banks, hence the importance of these positions.
In our experience as lawyers, we have even seen that sometimes the Public Prosecutor’s Office sees the directors of a company as responsible and has charged them with being responsible for the actions of the company. Many times the prosecutors do not handle the issue of companies or the commercial issue, much less the law 32 with which it is governed, but all this is important to mention so that the scope and responsibilities that the directors have in a company are known. .
In conclusion, we create Panamanian corporations; the process is simple and fast, and you don’t need to come to Panama for that.
Business license or commercial license (only for clients that will operate in Panama)
The business license in Spanish is called «aviso de operación» (only for companies that will operate in Panama).
We can also support you with this process. This license is authorized by another institution called the Ministry of Commerce and Industry.
The commercial license is distinct from society, and it is required of any company operating in Panama.A corporation is granted legal status as well as operational reporting.The commercial license will have the following information: the name of the company, the names of the directors, the activity developed, the address of the company, and the name of the resident agent.
The business license, once obtained, should be placed in a visible place in the business that will be developed, and the government should check this license annually, either once or twice per year.
These are some questions that clients ask us.
1. Can I create a corporation where I am the only person who appears? I am the owner of the company, with 100% of the shares.
It is not possible; the law establishes a minimum of three directors.
What is possible is that after the three directors contribute, one of them occupies the three main positions of president, secretary, and treasurer.
2. Can I create a company with more than three directors?
Yes, it is possible to create a company with more than three directors. The positions would be the following: president, vice president, secretary, treasurer, and member.
NOMINEE DIRECTORS
3. I want to create a company or companies in Panama, but I would like you to provide the directors.
Yes, we offer this service, which is known as nominee directors. Each director has an additional cost.
THE CAPITAL
4. Do I have to pay the $10,000 capital?
No, you don’t have to pay the $10,000 capital; it’s just a paper amount.
ANNUAL TAXES
5. How much should I pay in total every year for the company?
The total you must pay is 600 USD, corresponding to 300 USD as annual tax and 300 USD to the law firm as a resident agent. We will remind you every year to make this payment.
6. What happens if the name I choose for my company has already been taken?
It is common for it to coincide due to the large number of names that appear registered; for this same reason, we give the client the option to write us three different names. We do some research, check the system, and put in a name that hasn’t been taken before.
7. If I stop paying company taxes, do I have any legal problems with the Panama tax authority?
The answer is no; the tax authority cannot penalize anyone for the debts of a company. Who would have the tax debt is the corporation.
BANK ACCOUNT
8. I want to open a company, but I also need to open a bank account. Would you recommend a bank? Or would you support me with a bank?
Yes, we not only recommend the banks,, but we also provide assistance with all the documentation to support you with the bank account.
PANAMA PAPERS
9. Are companies still safe after the Panama Papers?
They are still safe and you can open bank accounts if the businesses are well structured.
If you have good capital to invest in real estate, this gives you the opportunity to have residence and banks are flexible to open accounts for investors.
Panamanian Corporations are still used all over the world, they are still good and the tax benefits remain the same.
10. Do I have to travel to Panama to create a company?
It is not necessary, we take care of all the creation so that the client does not have the need to travel to Panama and only has to come for the interview with the bank.
11. What is the name of the company that is most used in Panama?
Because in other countries the LLC and others are used.
The company that is most used in Panama is the Panamanian Corporation
Request your corporation’s cooperation with us. We will send you the information needed for this simple process.
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