Panama company formation
When starting a business in Panama, I always advise my clients to get to know the country. The southernmost part of Central America is the Republic of Panama, or simply Panama, which is one of the offshore states. This area is not only economically important, it is also a a very high priority area because of its geography, as it forms a natural bridge between North and South America, and therefore plays a key role in transport, transportation and the trade network.
How do we know Panama?
It is also popular with tourists, as it is located on the border of holiday paradises such as Costa Rica and Colombia, with an ocean washing both shores from north to south. Opened in 1914, the Panama Canal is one of the world's most important shipping routes, with more than 800,000 ocean liners passing through over the years. With its constant development, the expansion of the canal is essential, thanks to the ever larger ships. The importance of the canal is also demonstrated by the fact that around 10% of world trade passes through it.
Population of Panama
Panama is a very stable country, both politically and economically. It is a presidential republic, where the president is elected every 5 years by democratic vote. Unlike other offshore states, Panama is quite populous, with 4.5 million people, and more importantly, it is a young nation, with 30% of the population under the age of 14, ensuring continuous development and renewal. Panama has a good education and protects its skilled labour market, but welcomes good professionals. Half of the population lives in Panama City.
Taxation of companies in Panama
Turning to the state's offshore policy, Panama bears similarities with Hong Kong's tax regime. First of all, and perhaps the biggest difference with respect to the usual offshore jurisdictions, Panama is not a tax-exempt jurisdiction, nor does the IBC law provide for tax exemption. The Republic of Panama has a so-called territorial tax regime, which affects offshore companies in such a way that income from abroad is 0% Tax charged. This is why incorporating in Panama has been popular with entrepreneurs for decades.
While Hong Kong has reporting requirements for all companies registered in Hong Kong, offshore companies in Panama have been exempted. So it is simple and easy to run an offshore company incorporated in Panama.
Since 1927, the Republic of Panama has had a law in force regulating the registration and operation of offshore companies. With this law, Panama was one of the first countries to allow offshore incorporation and has since been considered the Switzerland of the Americas. It is discreet, secretive, strict, extremely stable, reliable and, among other things, economically successful. It is among the world's leading offshore centres.
There are great banks and lawyers working in Panama, so incorporating in Panama is a great option for building a stable company.
Operating a company in Panama
Foreign income of offshore companies incorporated in Panama Taxation 0% applies. They also provide firms with complete anonymityi.e. it is not necessary to provide the names and details of the owners or directors to the Panamanian government. It is therefore almost natural that the the use of nominal directors is also allowedor these roles can be filled by the same person.
For ease of operation in the Republic of Panama, no annual accounts are required and there are no restrictions on the nationality of shareholders or directors. What's even easier is that we don't need an office in Panama, which reduces our costs. Offshore companies registered in Panama can hold meetings anywhere, even differences in time do not cause disruption - i.e. a decision can be signed by the parties in different places and at different times.
For an offshore company in Panama must have at least 3 directors, have a local proxy to represent the company before the state, and have minutes of meetings and share turnover, but this can be held anywhere. If someone wants to incorporate on their own, we can provide the right number of directors.
In June 2000, the FATF designated it as a non-cooperating country in the fight against global money laundering, but removed it from the blacklist a year later. It has signed a Memorandum of Understanding with the OECD but has not initiated further negotiations on the matter. It has not signed a tax information exchange agreement with any country. Any request for data can only be made if there is double criminality. This means that what you have done is a crime in both countries. There is no tax crime in Panama.
Panama company formation process
One person is enough to set up a company. No need to travel, our European representative will guide you through the whole process. The incorporation of the company is done by a Panamanian lawyer signing the articles of incorporation. The deed will contain the following information: the name of the company, the address and names of the signatories to the deed, the amount of share capital and the allocation of shares, the names and addresses of the directors and officers, the name and address of the local representative.
Panama Permanent establishment
Panama is one of our favourite places to visit, as it is a country where companies and individuals can pay tax on favourable terms, and all foreign income is tax-free, while at the same time it is relatively quick and easy to obtain a permanent residence permit and eventually citizenship is.
The price includes: the preparation and filing of the company incorporation documents, government fees, notarisation and apostille, the annual fee of the registered agent, the lawyer and all other costs necessary for the full operation of the company.
- Setting up a company in Panama: €1 600, for nominal registration: €2500
- Costs from the second year: €1100 for a nominal service: €1500.