Form of government:Presidential Republic
Area:78 200 км2
Currency:Balboa (PAB); Dollar (USD)
Corporations in Panama
Limited Liability Corporations
Companies in the form of corporations with limited liability are most commonly used to create offshore companies in Panama. The corporation is created by two founders that conclude Articles of Incorporation in the presence of a notary, register such Articles in the state registration service and pay a registration fee (at least $60.20 with a standard authorized capital of $ 10,000). Сompanies are required to pay annually a fee of $300. All commercial and industrial enterprises are required to have a Permit for carrying out activities, if they are not exempted from its obtaining. The cost of obtaining such a permit is 2% of the net asset value, but can not exceed $60,000. Companies that operate in one of the free trade areas are required to pay an annual license fee of 1% of the net asset value, but not more than $50,000 .
After registering a company, only one shareholder can own it. The company’s shares can be of various types, they may have a nominal value or not, may be registered or bearer. There are no requirements to the minimum paid amount of authorized capital, except that bearer shares must be fully paid after issue. At the moment, strict rules apply to bearer shares: a registered agent is required to receive a certificate of bearer shares into custody and notify the state registrar of the availability of such shares.
The number of directors of a limited liability company can not be less than three, and their names must be specified in the company’s Articles of Association, the changes in the composition of directors must be submitted to the state registrar.
A foreign company may be registered in Panama provided that the following documents are submitted to the state registrar:
- Articles of Association with certified translation into Spanish;
- Minutes of the Board meeting of the company, at which a decision of registering a company in Panama was made;
- Copies of the company’s latest financial statements;
- A certificate issued by the consular office of Panama that the company was established in accordance with the laws of the place of registration;
- A certificate of the distribution of the capital of the newly established company.
A foreign company can change the location of its main office (the location of the administration and the management of the company’s activities) and define that it is in Panama, in this case the company will be taxed according to the laws of Panama, in other respects the company will adhere to legislation of the country of its registration. A lawsuit may be filed against a foreign company that operates but is not registered in Panama, while the company can not file claims.