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Panamanian Offshore Corporations
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Excelling
as a tax planning instrument, Panamanian corporations
are widely known and used throughout the world. Panamanian
corporations offer many tax benefits when used as Offshore
Corporations or IBC’s, as called in other jurisdictions,
also taking into account that the Republic of Panama
is considered a tax haven country.
Panamanian
corporations are easy to manage offering versatility
and security. Ruled by
Law 32 of 1927, Panamanian corporations
can also be used for establishing local business, within
the Republic of Panama.
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Established
as an offshore corporation, Panamanian corporations
are also commonly used as the perfect asset protection
tool since Panamanian corporations can function as a
holding company or own assets kept anywhere or real
estate property located in any country without having
to pay taxes in Panama for those properties held outside.
A great
advantage Panama laws offer Panamanian Offshore Corporations
(a.k.a. IBC’s) is the possibility of developing tax
free offshore activities, since Panama has a territorial
tax system.
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PANAMA,
GREAT PLACE FOR
OFFSHORE CORPORATIONS
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Panamanian
corporations thus serve businessmen, investors, or foreign
companies for making savings on tax payments.
An offshore
corporation may open bank accounts in or outside Panama
and own property located outside Panama without having
to pay taxes in Panama for this.
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PANAMANIAN CORPORATIONS LAW (.doc
file in spanish)
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Form to order a panamanian
corporation or private interest foundation
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Benefits and Advantages
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No obligation to
pay income tax when its income is obtained from a source outside
Panama. So, no income tax will be paid for offshore operations
or activities.
According to Panama Tax Laws, no income tax is paid for the
following corporate activities:
a. Invoicing
the sale of goods and merchandise through a Corporation’s office
in Panama at a price greater than the one invoiced to the corporation
in Panama for the same goods or merchandise, as long as those
products or goods stay out of Panama;
b. Directing,
through a Corporation in Panama, transactions that will become
effective, consummate or perfect outside Panama; and
c. Distributing
dividends and participations from Panamanian Corporations or
other juridical persons when income is not produced in Panama,
including the above mentioned situations.
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Maintenance
costs, including annual corporate taxes and resident agent fees
are only USD 550.00
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Stockholders may
be Panamanians or foreigners and may even be Panamanian or foreign
corporations
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No nationality
or residence requirement for the Panamanian corporations’ Directors
and Dignitaries
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Meetings of the
stockholders assembly or the Board of Directors may be held
anywhere in the world and can be held via telephone, fax, email
or any other electronic method
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Corporate assets
or capital of a Panamanian corporation may be kept outside Panama
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Panamanian corporations
may have any licit objectives and carry out any commercial or
industrial activity. Corporate objectives do not need to be
explicitly expressed in the Articles of Incorporation, while
Panamanian Law on Corporations allows having general corporate
objectives.
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One person alone
can be owner of 100% of the corporate stocks comprising the
entire corporate capital of a Panamanian offshore corporation,
after its incorporation and registration.
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Incorporation of Corporations
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Panamanian
corporations may be incorporated in just three days.
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For the
incorporation of a Panamanian corporation,
Law 32 requires
the celebration of an agreement between two or more
persons of legal age, who are required to subscribe
at least one corporate stock, each, without consideration
to their nationality or domicile. This agreement, called
Articles of Incorporation, must be done before a Notary
Public in Panama, who transcribes it in a Public Deed.
The Deed must then be inscribed or registered in the
Public Registry.
To facilitate
this incorporation process, usually two persons from
our Law Firm in Panama would sign the required agreement
and after registering the corporation, these two persons
issue and sign a resignation to all their rights and
interests in the corporation as subscribers of the Articles
of Incorporation.
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Panama
City
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The Articles of
Incorporation will reflect the terms and conditions agreed and,
after its registration in the Mercantile Section of the Public
Registry, this document will be effective against third parties
as well. Law No. 32 of 1927 on Corporations, in many aspects,
works only as a secondary source of rules.
As ordered by law,
the Articles of Incorporation must, at least, contain the following
information:
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Name
of the Corporation
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Name and domicile
of the subscribers of the corporation
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Corporate objectives
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Corporate Capital
(a description of the amount, if the corporation has par value
or non par value stocks, number of stocks, distribution, classes,
etc.)
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Duration of the
corporation, which can be perpetual
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Name and complete
address of directors and dignitaries
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Name and address
of the Resident agent
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Corporate Capital
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Panamanian
corporations are not required to have a paid capital
to be valid after its incorporation and these corporations
may issue nominative or bearer stocks. When corporate
stocks are issued to the bearer, share in the corporate
capital corresponding to those stocks issued to the
bearer is presumed paid.
Any kind
of person, a natural person or other corporation or
company, can become a holder or owner of the corporate
stocks, with no need for having legal residence or being
present in the Republic of Panama. Any nominative stock
may be issued in favor of more than one person.
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Tax Benefits
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Panamanian Corporations
are subjected to a territorial tax system, a regime that only
requires payment of taxes for operations done or considered
done within the territory of the Republic of Panama. Under Panamanian
Tax Law, commercial operations executed, taking place, or
taking
effects outside Panama will be considered offshore and are not
taxable, without considering that these operations may be managed
or directed from an office located in Panama. Except for the
annual corporate tax in the amount of USD 300.00 that all corporations
and private interest foundations must pay, there would be no
other tax obligations for Panamanian offshore corporations.
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Corporate annual Tax
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Panamanian
corporations have the obligation to pay annual corporate
taxes in the amount of USD 300.00, while only the first
annual tax is USD 250.00.
For corporations
registered between January and June, June 30
of each year,
will be the deadline for the annual tax payment, while for
corporations registered between July and December,
December
31 will be the deadline for paying annual corporate
taxes. For this purpose, registration date is that of
the inscription in the Public Registry, as written in
the stamped seal at the end of the Articles of Incorporation.
Corporate
taxes not paid on time will have a USD 50.00 overcharge
for each year due and a USD 300.00 fine for delays
of two or more annual tax payments.
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The Law Firm
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The Law
Firm BRIN FABREGA, HAMMERSCHLAG & CO (BFC LAWYERS)
renders legal services having the satisfaction of the
client’s needs and interests as a priority, with personalized
treatment and high quality, efficient, and ethical standards.
for more information visit Brin
Fábrega, Hammerschlag & Co.
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