General Introduction

Panama is an international service center that substantially benefits persons and companies wishing to use Panama based corporations for holding purposes or for directing business activities in different parts of the world.

Among the many advantages Panama offers are:

  • A geographic location and infrastructures which permit it to offer the best services of airfreight and maritime transport, both for passengers and cargo.
  • The Panama Canal with major ports located on the entrances in both oceans.
  • Further to, an excellent telecommunication system, with state-of-the-art technology.
  • The Colon Free Zone, located at the Atlatic coast of the country, is the biggest one within the western hemisphere, which offers unique opportunities for tax free storage, repackaging and re-exporting of every kind of merchandise.
  • The Special Economic Zone, located in Howard, at the Panama Canal Pacific entrance, offers the opportunity of establishing to develop, among others, assembling activities and  rendering several services abroad.
  • A unique banking system, highly regulated, which gathers more than 87 institutions, included some of the most important and renowned banks operating internationally.
  • There is no change control because the economy is based in the US Dollar.  No registries with the authorities or permits for transactions involving receipt or transfer of funds, are required.
  • The Panamanian corporations are exempt from payment of taxes over capital (shares of stock, bonds and other investments).
  • Low cost of living.
  • Stability and governmental infrastructure.
  • Tropical climate and natural paradise with the most beautiful beaches in both oceans and great rainforest with an immeasurable biodiversity.

Panama Income Tax Law specifically exempts from its provisions the following activities and sources of income:

  1. To manage operations from an office inPanama, provided these are completed, executed and take effect abroad.
  2. To invoice from an office established inPanama, the sale of  merchandise or goods for an amount greater than that in which said goods or merchandise have been invoiced to the office inPanama, provided same be exclusively handled abroad.
  3. Incomes from International Maritime Commerce originating from ships registered under Panamanian flag.
  4. Corporate dividends or participations when said dividends or participations come from incomes not produced within the territory of theRepublicofPanama, including incomes resulting from the activities as mentioned in points 1 and 2.
  5. Interests earned from funds maintained in time deposits or savings accounts.



The Republic of Panama has always played an important role in international commerce because of its geographic position, well-trained bilingual manpower, the U.S. dollar as our currency, an excellent telecommunications system and political stability.

All of these factors, together with Law No. 32 of l927 covering the organization and operation of Panamanian corporations, have helped to make Panama one of the most important corporate centre in the world and have made Panamanian corporations accepted by bankers, investors and governments .

Advantages of Panama.

The advantage which Panama offers as an international service centre may substantially benefit persons and companies wishing to use Panama based corporations for holding purposes or for directing business activities in different parts of the world.

Among the many advantages of Panama, an interested party will find the following:

  1. Privileged geographic position and infrastructure
  2.  Unique banking system, which includes 82 banks with offices inPanama, among them some of the largest and best known banks operating internationally, supported by strong bank secrecy laws.
  3. No exchange controls. No registration with the authorities nor any permits are required for any transaction involving the receipt or transfer of funds .
  4. The monetary system of the country uses the international free U.S. Dollar as its medium of exchange.
  5. No taxes on capital (stocks, bonds and other investments) held byPanamacorporations.
  6.  The income tax law ofPanamaspecifically exempts from its provisions the following:
    1. Directing from an office established inPanama, operations which are completed, consummated or take effect abroad;
    2. Invoicing , from an office established inPanama, the sale of merchandise or products for a sum higher than that at which said products or merchandise had been invoiced to the office established inPanama, provided that said merchandise or product s are handled exclusively abroad;
    3.   Income from International Maritime commerce of vessels registered under thePanama fag.
    4. Corporate dividends or participations when said dividends or participations are derived from income not produced within the territory of theRepublicofPanama, including the income derived from the activities mentioned in points a and b above.
    5. The interest earned for funds kept in time deposits or savings accounts.
  7. There are no tax treaties with any other country.
  8.  The Colon Free Zone offers unique opportunities for the duty free storage, repackaging and reshipment of goods of al l sorts.

How to Incorporate.

 Usually, the client will simply fax or mail to us a request to organize a Panamanian corporation and will 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.

Incorporation Cost.

The incorporation cost of a Panamanian corporation with a standard capital of US$10,000.00 covers the following:

  • Notarial and registration fees,
  • Share certificates,
  • First year of annual government license tax and registered fees
  • First year nominee fee for Secretarial/Director and Shareholder services.

Name reservation.

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 filling a written petition before the Public Registry.

After this period has expired the name reservation will lapse without the need for a notation by the Registry in said respect.

Capital .

There are no legal requirements regarding a minimum of capital.

According to law, there is no need to state that the capital subscribed has been paid in.

Panamanian law allows l00% foreign ownership of an international Panamanian corporation.


As long as the corporation is not doing business in Panama, it does not incur in any tax liabilities.

Maintenance fees and surcharges.

For subsequent years after the organization, it only costs US$300.00 annual license tax paid to the government plus the fee payable to our firm as Registered Agent of the corporation inPanamaand nominee service provider.

The due date of the annual license tax is as follows:

June 30t h of every year for companies incorporated in the first semester of the calendar year and December 31st of every year for companies incorporated in the second semester.

The surcharge for late payment of the annual license tax is US$50.00. In addition to this surcharge, a restoration fee of US$300.00 will be required to restore the company after the second period of non payment.

Amendments to the Articles of Incorporation.

Subsequent amendments to the Articles of Incorporation and elections of officers and directors must be filed for registration with the Mercantile Registry of Panama.

Registered Agent .

Regarding the appointment of the Registered Agent in Panama, which is required by law, the usual procedure is to appoint our Agent in Panama, as such Registered Agent.

The corporation is not deemed to have legal existence, with respect to third parties, until the date it is registered in the Mercantile Registry.

Therefore, business should not be conducted under the corporate name prior to said date.

Power of Attorney.

The corporation may execute in favor of one or more individuals abroad Power-of-Attorney to operate the company.


With the exception of corporations engaged in the retail business in Panama, stockholders need not be nationals or residents of Panama.

Meetings of stockholders may be held outside of Panama, if so provided in the Charter.

Stockholders may be represented by proxy.

Board of Directors:

There must be at least three (3) directors, who may be either natural persons or corporations or a combination of both, but unless other wise provided in the Articles of Incorporation, directors need not be stockholders, nor nationals or residents of Panama.

Meetings of director s may be held outside of Panama, and directors may be represented at meetings of the Board by proxy, who need not be a director.

The Board of Directors is elected by the stockholders, but vacancies, whether resulting from an increase in the authorized number of directors or otherwise, may be filled by the vote of a majority of the directors then in office.

There must be at least a President, a Secretary and a Treasurer but the corporation may also have additional officers, agents and representatives, who shall be chosen by the Board of Directors.

The same natural person or corporation may hold two or more off ices, if so provided by the Articles of Incorporation or by the By-Laws.


A corporation formed and in good standing under a foreign legislation, may opt to continue its existence underPanamalaws, notwithstanding the provisions of the legislation of its country of origin, by filling in the Public Registry, the following documents :

  • evidence of its good standing;
  • certified copy of the corporate resolution authorizing the continuation;
  • articles of incorporation subscribed in accordance with the laws of theRepublicofPanama, with an indication that they substitute the incorporation document of the foreign corporation.

A corporation formed and in good standing under a foreign legislation may conditionally register in the Public Registry its continuation in theRepublicofPanama, under the condition that said continuation becomes valid (effective) upon the registration of a declaration to that effect by the corporation’s duly authori ed representative or attorney -in-fact .

A corporation formed in accordance with the laws of Panama may, as provided for in its articles of incorporation or amendments thereto, continue under the laws of another country or jurisdiction as long as the laws of said country or jurisdiction so allow it and the corporation is up to date in the payment of the annual license tax to the government of Panama.

Trustee Services .

In addition to company formation and management we may also provide trustee services and advise with respect to the establishment of trusts subject to the Panamanian trust legislation (Law No.1 of Januar y 5, 1984) .

IMPORTANT NOTE: In accordance with regulatory and legal provisions, our firm maintains internal policies related to the processes of “Due Diligence” and “Know your Client ” , as routine to avoid the occurrence of illicit activities, protecting our clients and our business.

For incorporation queries in this jurisdiction, please complete and return to us our Company Formation Questionnaire.

For further information on our services provided in this jurisdiction, please Contact Us.


Company Law Company Law No. 32 1927
Type of Company Corporation
Language of Legislation and Corporate Documents Spanish (English translation optional)
Taxation of Foreign Profits None
Exchange Controls None
Length of Time to incorporate 3 working days
Shelf Companies available Yes
Name Restrictions Names identical or similar,offensive words
Endings and Abbreviations Required Corporation/ Corp. Incorporated/ Inc., Sociedad Anonima/S.A.
Length of Time to Verify Name Availability 3 hours
Reservation of Names Permitted Yes
Language of Name Any language using the Latin alphabet
Name of Banks, Insurance, Investment Fund, Trust Company or their equivalent require consent and/or licence Yes
Minimum Number of Shareholders One
Local Shareholders Required No
Corporate Shareholders Permitted Yes
Disclosure of Shareholders No
Minimum Authorized Capital Required No minimum
Authorized Capital/Number of shares that the company is allowed to issue No minimum
Bearer Shares Permitted Yes
Registered Shares Permitted Yes
No Par Value Shares Permitted Yes
Minimum Number of Directors Three natural persons or corporate figures or any combination thereof
Qualifications of Directors Legal age
Officers Required Yes. President, Secretary & Treasurer
Corporate Directors/Officers Permitted Yes
Nominee Directors/Officers/Shareholders Permitted Yes
Appointment of Subsequent Directors/Officers Articles of Incorporation
Annual General Meeting of Shareholders Required No
Annual General Meeting of Directors Required No
Location of Directors and Shareholders Meetings Anywhere
Adoption by Consent Permitted Yes
Quorum required for purposes of meetings Articles of Incorporation
Local Qualified Registered Agent/Office Yes/Yes
Filing of Register of Shareholders Optional
Filing of Register of Directors/Officers Yes
Filing of Register of Charges No
Register of Directors/Officers to be kept at Registered Office Yes
Company Seal Required No
Copy of Minutes to be kept at Registered Office No
Copy of Share Register to be kept at Registered Office Yes
Minimum Annual License Fee or Franchise Tax US$300
Annual License Fee or Franchise Tax Due Date June 30th (1stsemester Co’s)December 31st (2nd semester Co’s)
Applicable Surcharges for late payment and Restoration fees  US$50 (between 1 up to 12 months late payment)  US$300 (penalty applies for non-payment of two franchise tax)
Requirement to File Annual Returns No
Requirement to Submit Annual Audited Accounts No
Member of Apostille of the Hague Convention Yes
Increase or Reduction of Capital Shareholder’s resolution
Re-domiciliation/Continuation Allowed Yes
Reinstatement at Registry Yes
Dissolution/Striking-off for not payment of annual license fees Compulsory or voluntary winding up and dissolution; and striking-off for non-payment of annual fees more than 10 years.


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