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A Panama IBC is popular with foreigners. The Republic of Panama enacted its corporation law in 1927 which governs the formation and activities of Panama International Business Companies.
Panama is a Central American country. Its official name is the “Republic of Panama”. It is bordered by Colombia (in South America) to the southeast, Costa Rica to the west, the Pacific Ocean to the south and the Atlantic Ocean & Caribbean Sea to the north. Its total land area is 28,600 square miles (74,100 square kilometers). Panama City is its capital and largest city is home to nearly half of the country’s 4.2 million people.
With help from the U. S., Panama seceded from Colombia in 1903. The Panama Canal was built by the U.S. Army Corps of Engineers between 1904 and 1914. In 1977 an agreement was signed for the total transfer of the Canal from the United States to Panama by the end of the 20th century, which culminated on 31 December 1999.
Panama is an independent, sovereign state, run by an elected presidential government. Globally, it has earned the reputation as being one of the best business and financial centers in the world. The economy in Panama is both growing quickly and currently boasts of having the biggest income per capita found in Central America.
Panama corporation has some benefits including:
Panama corporations must select a unique name, in any language, that does not match the names of any already existing corporations. This name needs to also end with Corporation, Incorporated, Sociedad Anonima, Corp., Inc., or S.A.
A Panama corporation can have a corporate address anywhere in the world. However, the corporation must have both a registered office address located in Panama, as well as an approved agent residing in Panama for process service and official notices.
Panama corporations are required to have at least one shareholder. Nominee shareholders are allowed for privacy, and shares can be held by either private individuals or legal entities. There are no residency requirements.
Panama corporations are required to have three directors/officers (President, Secretary and Treasurer). The directors/officers can be either persons or legal entities. The directors and officers can be the same three persons or legal entities. Panama corporations’ directors, officers and shareholders may be residents of any country. The directors’ names must be filed in the public registry when the corporation is formed. However, nominee directors are permitted for privacy.
Panama corporations are not required to have a minimum authorized share capital.
Panama Tax Haven Benefits
One of the reasons corporations in Panama are so popular for both offshore business operations and global asset protection is because Panama does not require them to pay income, dividend, or capital gains tax on money earned outside of Panama. However, U.S. citizens and others residing in countries taxing worldwide income are required to declare all income to their tax authorities. One of the important tips to note is that U.S. people are taxed on worldwide income. So, even if there are no taxes in Panama, a U.S. person is expected to report the income.
Corporations in Panama are required to pay annual renewal fees which cost $300 USD plus the company formation and registered agent fees.
The Public Registry Office does not require corporations to file the names of shareholders and owners, so this information never becomes available to the public. However, the Articles of Incorporation do require names and addresses of the directors to be listed, so this information is open to public record. However, nominee directors are permitted in Panama for privacy.
There are no statutory requirements of accounting and audits for Panama corporations. It’s totally up to the corporate directors, what kind of records they would like to keep.
No annual general meeting is required for corporations formed in Panama.
When all required documents are filed, it typically takes five business days to be registered as a corporation. However, for an extra $250 USD, this process can take one day.
Purchasing a shelf company for faster incorporation is allowed in Panama.
Panama offers many benefits to its corporations including: tax free income for doing business outside its borders, privacy for owners and shareholders from public records, bearer shares for additional privacy to shareholders, only one shareholder required to incorporate, no annual meetings, no authorized share capital, no reporting or submitting records to the government, U.S. Dollar economy, low annual renewal fees, banking secrecy, fast incorporation, easy permanent residency for citizens of 50 nations, the world’s 2nd most popular offshore corporation jurisdiction.