Why Choose Panama?  

Flexible, established and designed for a diverse set of investment vehicles. Welcome to Panama – the leading offshore jurisdiction in the world. 

Of all the decisions you make when starting a new business, choosing the right  legal structure in the most suitable jurisdiction is one of the most important ones. This will impact how you pay taxes, your personal liability and your ability to raise money. 

In this post we’ll explore why Panama may just be the right jurisdiction for you. 

Whether you are a solo entrepreneur or an established corporate group, look no further. 

You are at the right place. 

PANAMA COMPANY IN A NUTSHELL  Minimum 3 Directors required to start a non-resident Panama company. Any nationality and residents in any part of the world are accepted.  This entity type is legally recognized as International Business Company or IBC.  No requirements for a local director. Light-weight entity structure: no mandatory auditing or tax filing as long as the company keeps its accounting records, Minutes and a Register Book. 0% corporate income tax on foreign sourced income. This means all business income that is NOT generated within the borders of Panama are considered foreign profit.  No minimum paid-up capital required.

 

Here’s why Panama is a cool option 

As one of the leading offshore jurisdictions in the world, Panama as a legal landscape offers your international business a liberal and powerful model to operate across borders. 

Half a million strong in the number of incorporated corporations, Panama Companies are accepted in the worldwide banking and financial community as an established structure to carry on a diverse range of business activities. 

 

Panama International Business Company 

Not a resident? No worries, you don’t need to be. The Panama offshore company we talk about in this article is legally recognized as the International Business Company or IBC. An entity type that offers foreigners a flexible and versatile legal structure that suits all types of industries with 0% corporate tax on all foreign sourced income. 

Liberal and versatile legal structure 

Flexible and light on governance, Panama Companies are used for numerous different types of business interests. One of the most common uses of this type of entity is as a holding company to hold intangible assets such as trademarks, copyrights and IP rights in other companies across various jurisdictions. This can be used to centralize otherwise distributed assets and digital rights under one legal structure. Panama Companies can also act as holding structures for real estate assets worldwide.

Other uses of Panama companies include those that often don’t require strong physical presence such as consulting business, vessels and ships, offshore production, a range of online and data businesses, tech startups, software development, licensing and so on.  

No currency restrictions 

Standardized by the US Dollar, there are no currency restrictions in Panama. What this means in practice is that your company in Panama can enter any type of financial transaction without being subject to government approvals or authorizations. This is not to say you don’t need to comply with the law, but this enables an agile operating ground for capital-intensive activities from investments to asset acquisitions and corporate structuring. Additionally, this also provides an attractive environment for everything from international trading, family assets, leasing structures and complex corporate mergers and acquisitions.

Established financial ecosystem 

Considered as the most modern and established international banking center in Latin America, Panama offers a robust setting for banking options for international businesses. While both offshore and onshore banking are still very much available in Panama, the nation has been restricting its policies regarding opening bank accounts and requires a physical visit prior opening accounts. This has been increasingly translated into a strong governing system around its banking laws, supported by its growing economy and stable government. 

For those of you wanting to keep things fully digital, however, there are plenty of alternative banking options outside of Panama that are still possible without the need of a physical visit. 

Zero corporate tax

Panama has a Territorial Tax System which means that all corporate income sourced outside the borders of the country are subject to 0% corporate tax. This same exemption applies to dividends, capital gains, interests and stamp duties on business transactions. 

In order to comply with this  law, make sure your company  

• • does not carry business operations within the borders of Panama
  • may not own property or real estate in Panama
  • doesn’t operate certain businesses without appropriate licenses (e.g banking, insurance etc.) 

However, it is important to remember that while your business may not be subject to Panama corporate tax, you as a foreign citizen may be subject to resident taxes in your home country in accordance with your domestic tax regulations.

Privacy and confidentiality

Today privacy matters more than ever before. Articles of Incorporation are recorded at the Panama Public Registry which means all general company information is available for the public, including the Directos identities. Only this part of the company information is required by the Registry. 

Shareholders identities of Panama companies are not registered at the Panama Public Registry. Panama Company shares are issued through private documents, of which the registering agent is obliged to know the shareholder information at all times. This information is for the lawyers and law firm private files. 

What about those who’d like to keep full anonymity? This is where Nominee Directors come in, we can help with providing a Nominee Board of Directors.

Requirements to open a Panama Company

Have questions? Here are the mandatory requirements to start your Panama company – and how we can help. 

What will I need to get started?	We will need your company name, some basic information (amount of shares, the kind of business you’re planning) and shareholder/director information. Proof of address and passport copy will be also required to complete the first step. We will then take care of the rest.
How many directors do I need?	Panama companies require a minimum of 3 directors. They can be of any nationality and residents of any country. No local director required. Requirements for officers are a President, a Secretary and a Treasurer. Typically, the 3 directors also serve as required officers. Don’t have 3 directors? We can also help with nominee directors.
Mandatory annual reporting?	No mandatory auditing or tax filing as long as your company keeps its accounting records by international standards, keeps a Minutes book and Shares register book. Annual government franchise tax does need to be filed to keep your company in good standing but we will take care of this for you.
Mandatory annual meetings?	Not required.
What’s the corporate tax rate?	Zero tax. This is for all business income generated outside the borders of Panama. Applies also to capital gains, dividends and interests. No stamp duty on business transactions either.
How much paid-up capital do I need?	None. Although the standard practice in Panama is to specify an authorized capital of US$10,000 divided in 100 common voting shares at a par value of US$100 each; or 500 shares without par value. This registered capital is simply a nominal figure that projects the estimated value of the company.
Par value or no?	Available and allowed. Value per share in case of no-par-value is capped at US$20.
Disclosure of information?	Shareholders identity is not registered at the Panama Public Registry. However, Panama Company shares are always issued through private documents and the incorporation agent of the company is obliged to know the identity of shareholders at all times. This information is for the lawyer and law firm private files. If privacy is important to you, we offer nominee services. To learn more about our added services, please contact us at future@korporatio.com.
Do I need a company address?	Yes. And it’s automatically included in the incorporation package we offer.
How do I open a bank account?	We will assist you in opening a multi-currency e-bank account free of charge. For a local Panama bank account, we can also help to make the introduction and referral to our network banks. However, Panama banks do require a physical visit prior approval of opening accounts.
What is the process of incorporation?	Three steps: 1. Submit your order. 2. Provide company information. 3. Your company is created.
Any mandatory annual payments?	The only payment Panama offshore companies require is the Annual Franchise Tax of US$300. But this is already included if you decide to set up your company with us.
What else do I need to start a Panama company?	Here is a list of everything mandatory you need to have. We’ve included all of this into our incorporation already:  Name application Certificate of incorporation Memorandum and Articles Assignment of Founders Rights and obligations First board of councillors minutes Register of councillors, beneficiaries, founders and registered agents Registered agent services Business Address in the respective location of the jurisdiction Money Laundering (AML) – Know Your Customer (KYC) – Political Exposed Person (PEP) check and approval Digital mail forwarding Drafting of minutes and assistance with other ancillary documents Smart Company Deployment, establishment + Digital Dashboard Customized Corporate ERC-20 Token Customized Digital Voting System  Assist in opening multi-currency cross-border Bank Account
How long will this take?	7 days. We will process all your information within 48 hours but the Panama Registrar requires 5 working days.

Have more questions?
No worries. Drop us a note at future@korporatio.com or start a conversation here – we are always here to help!