Background & General Outline
The Republic of Panama lies in Central America between the Caribbean Sea and the North Pacific Ocean. There are land borders of 225 km with Columbia (on the west) and 330 km with Costa Rica (on the east). The land area totals 75,990 sq km. The capital is Panama City. The Panama Canal links the North Atlantic Ocean via the Caribbean Sea with the North Pacific Ocean.
The topography is varied. There are mountains towards the Caribbean coast, while small hills and vast plains lie towards the Pacific side. The climate is tropical with prolonged rainy periods between May and January. There is a brief dry season between January and May.
The highest point is Volcan de Chiriqui at 3,475 m. Panama’s natural resources include copper among other minerals, mahogany forests and fish, especially shrimp.
Panama’s international airport in connected by many international carriers to most world centres. There are two ports, Balboa and Cristobal (at either end of the canal). The time zone is 5 hours behind GMT (= US Eastern time).
In 2010, the population of Panama is estimated at just over 3.4 million with half the population residing in urban areas, and the majority of those (over 1m) in Panama City itself.
The legal system is based on the Spanish Civil Law. However, company law is based specifically on the Delaware legislation.
The unit of currency used in Panama is the Balboa (PAB), which is pegged at parity to the dollar. There is no Panamanian paper currency and the US dollar is the de facto official currency for all but minor transactions. As a result, the Government cannot print money, and inflation is low, estimated at 2.3% (2009 est)
Spanish is the official language, but English is widely spoken and understood in major cities.
Disclosure of the Beneficial Owner
When you Incorporate in Panama there is no requirement to disclose details of the Beneficial Owner to any Government Authority.
Provided that the company activities are carried on outside of Panama, the company you Incorporate in Panama will not be subject to any income taxes therein. The License fee of $250 is payable annually to the Government Authorities to maintain the good standing of the Panama Corporation
Double Tax Treaties
Since Panama does not levy taxes on foreign source income, it has until recently refrained from negotiating double tax treaties. However, renewed pressure from the OECD and the G20 on the issue of tax transparency has forced the country into a rethink.
In April 2009, following that month’s landmark G20 summit in London, Panama was placed on the OECD’s ‘grey list’ of territories which have committed to, but not yet substantially implemented, the internationally agreed standard in tax transparency and information exchange. Later that month, the government of Panama announced the conclusion of the first round of negotiations towards a double tax agreement with the Netherlands, including tax information exchange provisions in line with the OECD standard. Panama’s deputy Economy Minister, Frank De Lima explained at the time that these negotiations “marks progress towards the removal of Panama from the Organization for Economic Cooperation and Development’s ‘grey list.’”
In 2010, Panama also agreed to launch negotiations towards a double tax avoidance agreement with Japan and Singapore, including information exchange provisions. Negotiations towards an agreement for the exchange of tax information with France were also launched in May 2010.
Jurisdictions must conclude a total of twelve TIEAs to gain a place on the OECD white list of territories that have substantially implemented the internationally agreed standard and avoid the prospect of international sanctions.
Other International Treaties
Mutual Assistance Treaties: Panama has concluded mutual legal assistance treaties with the US, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Colombia. The treaties operate at the administrative level: in other words, Court procedures are not required, although there is an appeal procedure. The treaties cover serious crime, but do not include fiscal crime. The Panamanian authorities do not entertain requests for information on fiscal matters.
Panama’s Inclusion on FATF Blacklist: In June 2000, Panama was identified by the FATF as a non-cooperative tax haven in the global fight against money-laundering. The result of this was that Panama was one of fifteen tax jurisdictions placed on an FATF blacklist. Each offending tax haven had a year in which to correct its regulations and legislation.
The FATF released its annual report in June 2001, in which the organization revised its list of countries and territories deemed non-cooperative. Only four were removed from the list, including Panama (the other three being the Cayman Islands, Liechtenstein and the Bahamas). Panama was praised by the FATF for its substantial efforts to conform to forty recommendations set out in a code of good practice governing money laundering.
In 2000 Panama had adopted four anti-money laundering decrees: Legislative Assembly Law No. 41 of October 2, 2000, entitled “Capital Laundering” and amending the Penal Code by imposing harsh penalties of up to ten years imprisonment for publicly breaching the secrecy of information or carrying out unlawful transactions related to capital laundering; Legislative Assembly Law No. 42 of October 2, 2000, setting down Measures for the Prevention of the Crime of Capital Laundering; Ministry of the Presidency Decree No. 136 of October 3, 2000, creating the Financial Intelligence Unit for the Prevention of Capital Laundering; and Executive Decree No. 213 of October 3, 2000, amending the 1984 Decree relating to the practice of trusts and making it compulsory for banks and certain financial institutions to render information on “suspicious transactions”.
The Registrar of Companies reserves the right to refuse any name which is identical or strikingly similar to an existing company or, in his opinion, inappropriate or undesirable, for example, any name which suggests an Imperial connection, or any name which is deemed to be offensive or obscene. Names which include a reference to “Assurance”, “Bank”, “Building Society”, “Chartered”, “Co-operative”, “Municipal”, “Fund Management”, “Insurance” or “Trust”, require a special license and may not be used as of right.
Names must end with Limited, S.A., Inc., Corporation Incorporated, or, S.A., to denote limited liability.
A Panamanian Non-resident Company is not permitted to trade within Panama, nor may it offer its own Shares for sale to the public. It is also precluded from conducting or carrying out Banking; Insurance; Fund Management; Investment or Asset Management; Trusteeship; or any associated activity.
Summary & Features
Panama is probably one of the world’s most liberal country when it comes to taxing foreign and offshore entrepreneurs.
The most important of the numerous advantages of Panama Company Formation are:
- No income tax, no corporate tax, no sales tax, no value added tax, etc…
- Panama’s official currency is the US dollar – thus, no risk involving exotic inflationary central American “money” issued by corrupt governments;
- Panama’s corporation laws are modeled after the Delaware Corporation Law, which is among the most liberal in the world.
- No citizenship or residency requirements or restrictions with respect to owners, directors and officers as with most other tax havens. Stockholders’ and directors’ meetings may be held anywhere in the world.
- Funds and accumulated offshore profits can be deposited or invested in any country in the world without becoming subject to taxation in Panama.
But what can you actually do with your Panama Corporation?
Quite a lot of things!
- Set up corporate bank accounts all over the world;
- Manage Investments, funds and other holdings;
- Obtain international corporate credit cards, regardless of your current credit rating… we will show you how.
- Earn tax free income with your Panama corporation and spend it anywhere in the world using your corporate debit cards.
- Buy or sell tax free securities, precious metals, commodities, real estate, other companies, mutual funds, and more.
- Procure business loans, negotiate financing or joint venture agreements, mergers and acquisitions.
- Save LOTS of taxes!
- Avoid local zoning, labor, manufacturing, warranty and other restrictions.
- Facilitate international trade activities.
- Completely anonymize your assets.
Incorporate in Panama
Each company we Incorporate in Panama Includes:
- name check
- preparation of memorandum
- preparation of articles
- preparation of registration forms
- filing with the registrar of companies
- payment of filing fees
- certificate of incorporation
- share certificates
- 1st year registered office
- 1st year registered agent
- 1st year government administration and maintenance
- Assistance with the opening of an offshore bank account
Panama’s legislation has long created favorable tax conditions for offshore operations.
Incorporate in Panama Today!
Now is truly the time to Incorporate in Panama and get established offshore before it’s too late!
The total cost to Incorporate in Panama is only US $1,895 including all first years fees.
Contact Us to become a client and Incorporate in Panama Today!
Take advantage of our more than 18 years of experience and let us help you every step of the way.
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