ORGANIZING A PANAMANIAN CORPORATION
The Corporation Law of Panama Law 32 of 1927 governs the law relating to organizing a Panamanian Corporation. The corporation law of the Republic of Panama provides that any two natural persons acting as the organizers and the subscribers may appear before a Notary Public to organize and constitute a corporation. It is the usual practice for natural or juridical persons outside of Panama to accomplish the formation of a Panama corporation through a local Panamanian law office, a trust company, or a professional
management services firm.
ORGANIZING A PANAMANIAN CORPORATION
To organize a Panamanian corporation, one may provide the name of the corporation, the names and addresses of the Directors, the names of the Officers and the desired capital. Once this information is received, it will take no more than five (5) working days to protocolize the Articles of Incorporation and register them in the Public Registry.
A preferred name, with two or three alternatives in the event that the desired name may conflict with a name already in use, expressed in any language, The name must also include a corporate ending such as Anonymous Society, Corporation, or Corp, Incorporated, or Inc., Limited, or Ltd. to clearly denote that it is an incorporated company.
After its availability has been verified, the name of a corporation may be reserved in the Public Registry for a period not to exceed thirty (30) days, by filing a written petition before the Public Registry, once the Public Registry confirms their availability for a US$25.00 fee. After this period has expired, the name reservation will lapse without the need a notation by the Registry in said respect.
Articles Of Incorporation
One must specify the purpose of the company and certainly that can be as broad or specific, as he/she would wish. It is certainly possible to indicate a number of activities, if that is desired.
To execute the Articles of Incorporation in conformity with the laws of the Republic of Panama, the following data must be furnished:
- Name of the corporation (which may not be similar to the name of any corporation already recorded in Panama) and must indicate that it is a corporation by adding to it S.A. or Inc., or Corp., or any other acceptable formula that indicates it is a corporation.
- Its general object or objects.
- The amount of its capital and the number of shares of stock into which it is divided. It is noted that said amount may be expressed in the legal currency of any country.
- Since the shares of capital stock may be par value or non par value, when the shares are without par value, that amount of the capital need not be mentioned, but it will be necessary to state the total amount of shares of stock that the corporation is authorised to issue.
- Whether the corporation may issue its certificates of shares to bearer, or on nominative form, or either way.
- If the corporation is to issue shares of different classes: the number of shares of each class and the designations, preferences, privileges, voting rights, restrictions and requisites of the shares of each class of the statement that said designations, preferences, privileges, voting rights, restrictions and other requisites may be determined by a resolution adopted by the majority of the Directors.
- The names and addresses of the Directors of the Corporation, which may not be less than three, and who need not be stockholders and may have any nationality and be residents of any country.
The names of the first officers of the Corporation which need not be directors or stockholders, and may have any nationality and reside in any country. The law requires corporations to have at least a President, a Treasurer and a Secretary, but one person may serve in more than one of said capacities.
Capital Required and Fees for registration
The capital of a Panama corporation is expressed as Authorized Capital, and there is no minimum capital that must be paid in. The minimum, initial capital registration fee is US$60.00 (based upon $ 10,000 authorized share capital). One may need the services of a notary and accountant to make this declaration for him/her, which costs less than $ 100.00
A minimum (with no maximum) of three directors is required. These may be of any nationality, residence or occupation. Nominee directors are permitted and many offshore formation firms will try and convince you to use their nominees for this purpose. The decision to use nominee director is yours to make and really comes down to trust.
A President, a Treasurer, and a Secretary are required. These may be natural or juridical persons, and there are no requirements as to nationality, residence or occupation. While one person may hold more than one office, it is customary that the President should not also be the Secretary. One of the officers is usually named Vice-president. There may be as many Vice-presidents as required. Managers or other positions may also be named if desired. Normally the directors and the officers are one and the same, but they certainly do not have to be.
The company can be domiciled anywhere in the world, but I advise that you stay with Panama or another tax haven as the domicile of the Panamanian Company. The Panamanian Company must have a Registered Agent domiciled in Panama. It is required that the agent is a practicing lawyer or law firm. Domicile of registry is not necessary domicile of Business. A very important point to understand when planning tax strategies.
The Corporation may have a limited or unlimited life, however, it is customary for the duration to be perpetual.
Time Required To Establish The Company
In Panama the incorporation process can be done in about one week to ten days. If the paperwork is being accomplished by mail, and the check needs to clear, then of course the process can take a month. But anyone in a rush can incorporate in person in about one week.
Annual Franchise Tax
Every corporation must pay an Annual Franchise Tax of US$150.00 to maintain its good standing. If the Annual Franchise Tax is not paid within the three months from the anniversary date of the organization or the corporation payment of the Franchise Tax will be subject to a surcharge of US$30.00.