Offshore Company Formation - Panama

Background

The Republic of Panama is an isthmus that links North and South America, with the Panama Canal crossing the nation from north to south at the narrowest point of the country. Panama has an estimated heterogeneous population of 2,839,177 persons, and a long tradition in international trade dating from colonial times that has been a magnet in attracting people from different nationalities, races and religions.

The spirit of openness that characterizes Panama has led to a calculated development of international trade policies, and the creation of legal entities consistent with the strategy of promoting services for the benefit of the international community and the welfare of the Panamanian economy, amongst which stand out the Panama Canal, the Colon Free Zone, the International Banking Center, the Transshipment Center for Containers, as well as a liberal and open legal system which has allowed, since 1925, the development of the leading Merchant Marine in the world, and has provided a reliable jurisdiction for the incorporation of companies to be used in the international commerce since 1927.

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Basically, the formation and operation of corporations ("Sociedades Anónimas") are matters governed by Law Number 32 of 1927.

Among the interesting features of Panamanian Corporations, we can find the following:

1. Panamanian Companies can be incorporated without regards to the nationality of its directors and shareholders.
2. Income generated by a Panamanian Corporation outside of the Panamanian Territory is tax exempted.
3. There is no need to file any financial reports or tax returns to the Panamanian authorities, if the company does not operate in Panama.
4. Companies may act as directors, officers and corporate liquidators.
5. There is no need to hold annual meetings of Directors or Shareholders in Panama.
6. Directors and Shareholders may attend to the meetings personally, by proxy, by phone or by any other electronic means.
7. Shares may be issued to the bearer or registered. In any event, the name of the shareholder is not disclosed to the Public Registry.
8. There are no restrictions for the objects of a Panamanian Corporation, as long as they are not considered illegal by the authorities.
9. The time of incorporation is around three to five working days.