Frequently Asked Questions

Corporate taxation

Panama executed territorial tax regime applied for both resident and non-resident companies, under which no corporation tax is levied on non-Panamanian sourced income including corporate income, capital gains, withholding tax or stamp duty.

Business operation

Cannot undertake the business of banking, trusteeship and trust administration, insurance, assurance, reinsurance, fund management, investment funds, collective investment schemes or any other activity that would suggest an association with the banking, finance, fiduciary or insurance businesses.

Generally, corporations are incorporated under the Corporation Statute Law 32 of the 1927 Commercial Code. Limited Liability Companies and Limited Partnerships are also used.

Company director/shareholder

Corporation laws demand at least one shareholder and three directors to form a company in Panama. Both corporations and natural persons may act as directors. They may be of any nationality and need not to be residents of Panama.

Panamanian companies are also required to appoint a minimum of three officers (president, secretary and treasurer) who may also be the directors.

Name and address of company directors would appear on the Public Registry upon company registration. However, the details in relation to shareholders are not made public.

A company secretary must be appointed, who may be a natural person or body corporate. The company secretary may be of any nationality and need not to be a resident of Panama.

Share capital

The minimum issued capital is either one share of no par value or one share of par value.

The usual authorized share capital is US$ 10,000 divided into 100 common voting shares of US$ 100 each or 500 common voting shares of no par value; the capital may be expressed in any convertible currency.

Non-voting shares, preferred shares and registered shares. Bearer shares can be issued but no-par-value and bearer shares must be fully paid when issued. The registered agent must keep the bearer shares certificate in safe custody and must notify the Registrar that the shares have been issued.

Annual maintenance

A company has to maintain its corporate structure and a local registered address in Panama. There is no need to file annual return or tax return given that the company only carries out its business outside the jurisdiction.

Whilst there is no requirement to file audited accounts with the authorities, a company is required to keep financial records, which reflect the financial position of a company.

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