Companies Corporations in Panama

Corporations in Panama

Introduction to Corporations in Panama and Offshore Finance

Most likely you have already heard the term Offshore, but may not be aware of what it implies. The term Offshore literally means offshore and was used by foreign bank account owners to refer to their foreign investments. Initially, offshore operations began in a formal way in Switzerland, at the beginning of the 20th century, by opening accounts.

In North America, the States had different laws on companies as well as antitrust laws, many entrepreneurs who had businesses that spanned several States placed or changed the headquarters of their businesses to the State where they had the most facilities. The State of Delaware was one of the first in which entrepreneurs saw that it was easier for their businesses, due to its strict rules on corporate anonymity.

Later, the Trusts began to be used to evade the antitrust laws, one of the first to use them was the magnate John D. Rockefeller and his company Standard Oil Company at the beginning of the 20th century, basically dividing his emporium into several trusts, as a mechanism to counteract antitrust laws, which prevented it from carrying out its entire operation from Oklahoma to New York, this operation was one of the first known that took advantage of another jurisdiction or legal persons (Trusts), to expand business. Later, in the United States in the depression of the 1930s, numerous investors, fearful of what could happen in the North American banks, moved their liquid assets to other jurisdictions, including Switzerland, which was the best known of the time for its characteristic neutrality.

The practice paid off and Switzerland emerged as an international powerhouse at the banking level. Decades later, but in a different way, other jurisdictions emerged, including Panama.

Through the years the geographical position of Panama acquired enormous importance for the Spanish Colony in the 16th to 19th centuries when Panama became independent from Spain. Panama was a must for passersby, merchants, immigrants, and diplomats. This condition was ratified with the choice of this country for the construction of an Interoceanic Canal that will cross from the Pacific Ocean to the Caribbean Sea. Later with the implementation of the Colon Free Zone. Due to this situation, Panama had to have an international banking center consistent with its commercial activities, since there were a large number of North American citizens stationed in the Old Canal Zone, which was a North American jurisdiction.

In 1927, the Corporations Law was promulgated, and almost without premeditation and in addition, Panama became an offshore operations jurisdiction. It was later that an attractive tax regime was defined for these operations to attract foreign investment.

It is necessary to note that other jurisdictions are eminently, infamous and deliberately instituted to be tax haven or tax havens, often classified as sellers of impunity. Over time, this activity is accepted under certain parameters, mainly those of foreign investment.

Main Advantages of Offshore Operations(Panama).

Initially we have to define what is an acceptable offshore jurisdiction, to carry out this type of operations.

There are various criteria to determine when and where a jurisdiction is acceptable for the incorporation of a legal entity, these are basically summarized in the following:

• Favorable Tax Regime: An offshore jurisdiction should not have a repressive tax collection authority and its main contributor to the country’s income should not be the collection of income taxes or corporate income taxes.
• Strict Anonymity Policies: It is considered that in an acceptable offshore jurisdiction, the disclosure of the corporate or financial veil of the company that is constituted should be punished or sanctioned.
• Stable State Policies: An offshore jurisdiction should not be in danger of a coup, it should be completely democratic and its rules on corporations should be stable, as well as the establishment of protectionist rules for foreign investors, this can be observed by qualifying of the different international firms that determine the investment risk in a country (Standard & Poor’s, Moody’s, etc).
• Modern Communications Structure: A country that intends to attract business or offshore operations must have an attractive Internet, financial and governmental communication structure, that is, the person abroad has complete accessibility to its operations.
• Easy to Incorporate: Companies or foundations in an offshore jurisdiction must be formed in less than four business days.

For foreigners, the Constitution of Companies in Panama or other jurisdictions is attractive. In Panama, according to the Corporations Law, two or more persons, even foreigners, can organize a local corporation known as Sociedad Anónima for any legal purpose.

Let’s see some features:

• Complete Confidentiality and Anonymity.
  In Panama there is no extra requirement for people who do not reside in the country.
  Revealing the Information of the owners or investors of the Company is not a requirement to be able to register it in the Public Registry.
• It is not required to present an accounting statement for companies that do business exclusively outside of Panama and it is not an obligation to maintain accounting books in Panama.
• Registered or bearer shares can be issued, with or without par value.
  The initial capital is not necessary to demonstrate it or to pay it.
• The annual meetings of the Board of Directors or the Board of Shares are not necessary and if they are held it is not a requirement that they be held in Panama.
• Directors and Shareholders can be citizens of any country in the world.
• Corporations with foreign capital can own and buy real estate in Panama and there is no restriction to conduct business in Panama, such as other jurisdictions.
• Directors do not need to be Shareholders, which provides a huge advantage for the investor who wants to do it anonymously.
• To carry out international trade, it is not necessary to have a special license to carry out local commerce, yes.
• In Panama there is much more possibility of doing business than in the offshore islands with an eminently tourist structure and asset protection, in Panama there are innumerable items in which you can invest.

Panama has qualities that place it above its competitors in terms of investment, in other offshore jurisdictions you limit yourself to investing in Bonds and Shares, however in Panama there is a range of possibilities for investment in agro-industrial, tourism, goods real estate, electronic commerce, re-export center, insurance, franchises, retail and wholesale trade, telecommunications, among others.

Unlike other countries in Panama, it is intended that foreigners come to invest and for that reason, it opens its doors wide, our officials have been instructed to treat foreigners who come to invest well, since it is intended to minimize unemployment and the Government is convinced that for this there must be more foreign investment. For these purposes, we have the investor protection law, investor visas, work permits for trusted persons, among others. People armed with only good ideas and a willingness to invest have done very well in Panama.

In recent years there have been various foreign investments in different topics that have brought positive results, Mexican engineering companies have been given in concession the construction of huge highways, on the other hand, they have been given in concession the exploitation of tourist resources in Bocas del Toro and Chiriquí (two Panamanian provinces with many resources).

The largest shopping center in Central America recently built in our country is owned by North American and Colombian capital. The largest Telecommunications company in the Dominican Republic, recently opened its doors in Panama with excellent results.

But not only large investments are attracted in Panama, there are small and medium investors which are also accommodated in our system, especially in the commercialization of products over the internet, retail trade and services, such as printing and photocopying, restaurants, Internet cafes, recycling of scrap metal and plastics, supermarkets; In short, there is no limitation, after you open a corporation, you can do any type of business in Panama, such and such a Panamanian.

Another advantage of setting up a corporation is that by making it and moving your assets to it, you have the legal protection of them, no one can seize your assets if they are in the name of the company, for inherently personal matters, however It is necessary to note that if they can be subject to legal actions for actions of the company, but for this there are what are known as private interest foundations that are described in detail below.

Panama as an Offshore Jurisdiction and as a Nation to Invest

Panama General

• Population: 3 Million (2004)
• Per capita income: USD 4,115 (2004)
• Currency and Exchange Rate: 1PAB / USD
• Type of Government: Constitutional Republic
• Risk Rating: BB + Fitch & Duff & Phelps
• Ba1 Moody’s
• BB Standard & Poor’s

Economic activity is concentrated in the service sectors (80%), particularly financial services, commerce and transport. The main commercial partners of Panama are the United States, Germany, Japan, Costa Rica,Mexico, Ecuador and Venezuela. Panama, for having its parity with the dollar and for having a stable economy, does not generate almost inflation (1.3%)

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Estimate from Business Monitor Internacional (BMI), Latin American Monitor; Central America. Vol 21, No. 5. May 2004

In this document the currencies are designated by the ISO code: PAB for the Panamanian Balboa and USD for the United States of America dollar. In Panama there is a system of exchange parity between the balboa and the dollar.

Conclution

There are other uses not mentioned in this presentation such as the incorporation of private mutual funds and other investment mechanisms, offshore companies and incorporations, there are also captive offshore insurers, in principle we wanted to explain the offshore uses in the simplest way, if you are interested In more detailed information and operation of both re-exports, accounting management and other aspects, do not hesitate to contact us. , It does not matter if you are a student we love to serve you, the consultation is free.

If you want to continue your preparation, contact us or request the offshore operating manual in which it is shown in a graphic and explanatory way, specific cases used by offshore users.

Source: Monografias .com

Why a Corporation in Panama?

As one of the freest and most vibrant economies in the world, Panama is a country rich in opportunities for local and international entrepreneurs & Corporations in Panama.

Fueled by foreign direct investment and its import and export market, Panama is the best option for companies & Corporations that want to expand their presence in Latin America, and international companies looking for a site abroad to house their assets and protect their business. in uncertain times.

Below, we’ve rounded up some of the top reasons why Panama should be on your list when considering a new Company Corporation in Panama, and share tips on how to be successful in a Latin American business environment at a time when competition levels are higher than never.

Why form a Company Corporation in Panama? – Growing Economy

Panama has grown at an unprecedented rate in the last ten years. Between 2013 and 2018, GDP per capita increased from US $ 11,841 to US $ 15,090, and its GDP nationwide increased by a third, from US $ 45.6 billion to US $ 61.8 billion. The country, on average, is growing more than 5% annually and several new infrastructure projects, such as the additional bridge of the Panama Canal and the Colón Urban Regeneration scheme, are helping to boost the economy and encourage foreign direct investment (FDI). ).

In addition to these new developments, the Government of Panama has been executing a five-year Strategic Development Plan, which began in 2015 and ends this year (2019). The scheme covers five key concepts, all designed to drive inclusion and competitiveness in the country.

Panama business training

The country, on average, grows more than 5% annually and several new infrastructure projects.

1. Improve productivity and diversify growth.

2. Improve the quality of life.

3. Strengthen human capital.

4. Improve infrastructure

5. Improve environmental sustainability, including its management.

This new strategic plan is accompanied by the recently announced ‘Vision 2030 Panama’ plan, which was presented by the Vice President of Panama, Isabel de Saint-Malo de Alvarado, and the President of the Council, Luis Ernesto Carles. The plan is to encourage foreign investment and build a smart city for current and future generations, based on the macroeconomic stability created by the Panama Canal and other infrastructure projects announced since then.

Few Barriers to Entry in Panama

At a time when Companies Corporation leaders have to fight through a bureaucratic ribbon to get their startups off the ground, it is good to know that there is at least one country where it is easy to incorporate a company and start a new international experience.

Panama is a unique country because it makes it possible to register a Company Corporation in Panama in approximately two weeks and it is not necessary to be physically in the country during or after the incorporation process. In fact, several high-profile entrepreneurs have never visited the country, but they have managed to build successful Companies Corporations globally and record hundreds of millions of dollars in profits.

Directors, shareholders and officers of the company can be of any nationality when registering the Companies Corporations in Panama and can live in any country in the world.

Accounts do not have to be presented to the government, and Companies Corporation board meetings do not have to be held in Panama, which offers significant advantages for international companies.

The added benefits of registering in the country are that owners can remain anonymous, their Companies Corporation Panama goals do not have to appear in the Articles of Incorporation, and secrecy laws mean that account information cannot be disclosed to third parties, which offers an anonymous trading environment in which you can trade freely without reporting activities.

In addition, the process to obtain a visa in Panama is simple and timely, and the country actively welcomes people of all nationalities.

In fact, during its World Youth Day 2019, the government hopes to attract more than 200,000 young people to the country and place Panama on the world map of the expatriates of the millennium. As a country that relies on immigration for growth and development, it is clear that Panama works hard to build a diverse citizenship that not only helps innovate in the country, but also fills a skills gap and fosters local entrepreneurship. .

There is no income tax on foreign profits

One of the most common reasons for incorporating your company in Panama is due to its territorial system, where the income obtained outside the country is tax free.

For a Company or Corporation that has centers in several Latin American markets, Panama is the perfect offshore tax destination that allows companies or Corporations to maximize their profitability and reduce the amount of taxes they pay. Of course, there are some caveats to be aware of.

By establishing an offshore company Corporation in Panama, you can create an “Investor Society” that protects your assets and real estate from future liabilities. Since there are no restrictions on remittances or currency exchange controls, you can enjoy free-flowing funds and take your money in and out of the country as needed to use it for additional investments.

Prosperous Business Outlook

There are several key industries to consider when expanding to Panama.

With so many Latin American startups putting the territory on the world stage, there has never been a better time to start a new company in Panama. Thanks to its growing tourism sector, endless real estate projects, increased agricultural exports, and an impressive banking and financial sector, there are several key industries to consider when expanding to Panama. Additionally, the Panama Canal places the country in a unique position as an international trade center connecting the Atlantic and Pacific oceans, bringing quality imports from all over the world.

The country’s dollarization and strong expat community only add to the country’s thriving startup scene. With a high proportion of highly skilled workers and a culture similar to that of the United States, Panama is the best option for international companies & Corporations.

Strong Government

The “Panama Papers” undoubtedly had a great impact on the country and its perception around the world, but government regulations have gone a long way to ensure that companies or Corporations Panama are playing correctly. However, this has led the government to turn its attention to visa and tax programs, and there may be further changes on the way that may threaten foreign companies or Corporations for decades to come. For legitimate tax-paying businesses, there is nothing to worry about; in fact, the new legislation will only facilitate business in the country.

In his fifth year in office, President Juan Varela will face a leadership challenge in May 2019, but his impact on the economy, housing, education and justice will be felt for decades to come. The country’s government is stable, popular, and business-friendly, serving as the perfect environment for foreign investors and local entrepreneurs.

Source:bizlatin hub

What is a corporation in Panama?

A corporation in Panama is a legal body regulated by Law 32 of February 26, 1927. Where there may be a single owner or several (partners) who join together for a common commercial or patrimonial purpose, the partners (shareholders) must establish the percentage of participation equivalent to a number of shares.

A Panamanian corporation allows combining financial and intellectual capital.

When creating the corporation agreement, it must be signed by two subscribers who accept at least one share of the company and are not strictly the owners of the company. In practice, it is usual for the articles of incorporation to be signed by the lawyer (resident agent), together with another lawyer from his office. Once the contract is formalized, the subscribers renounce the subscribed shares or, if required by the client, remain with said shares for administrative reasons.

Panamanian corporations can conduct any lawful business that is not contrary to any law, they can also conduct business abroad and locate their offices anywhere in the world. The business possibilities offered by a Panamanian corporation are diverse, one of its main attractions is that when the commercial activity is not carried out in Panamanian territory, it is exempt from paying taxes on that activity and the money it generates can be received in Panama for free of taxes.

Another interesting point is that the social capital to form a corporation in Panama is a social capital and it does not need to exist in a liquid way in a bank account in Panama, this facilitates its constitution. However, if necessary through the company, a foreigner, whether natural or legal person, can open bank accounts or fixed terms in Panama, the latter with interesting returns of up to 5.5% in the banks of the Panamanian market .

A Panamanian corporation, as an organism for the protection of heritage:

Investing in real estate isn’t just about buying your first home or buying a second income-generating property – that’s just the beginning of the equation. As time goes by, other factors such as your retirement are being valued, which is something that we all aspire to achieve but few of us prepare for that longed-for moment. Another important element of the equation is the legacy that you will leave to your descendants or that you designate as worthy of your economic legacy.

When you wonder how to ensure that your assets are protected from any external factor, such as lawsuits of any kind, divorce proceedings, etc. A legal body such as a corporation can be your ally so that your assets reach your golden years optimally or that your legatees receive it according to your will.

3 Reasons to use a corporation in Panama  as a legal body for asset protection:

1. The corporation in Panama is a legal body independent of the shareholders:

This means that the obligations that you acquire with your creditors only correspond to you and the company has no responsibility for those obligations. The company is only established to manage assets and does not engage in any legal business that may pose a present or future risk to its assets.

2. It is a legal body of international protection:

Article 90 of Law 32 of February 26, 1927 establishes that “a foreign company may have offices or agencies and do business within the Republic of Panama.” This is possible after complying with some requirements established in the same article, but the important thing about this point is that if you have assets outside of Panama under a corporation, you can domicile or open a branch of the same corporation in Panama, so that this same legal vehicle acquires new assets in Panama. In this way you make sure that your assets are protected under a single legal body and that it is easier for you to manage or transfer your assets to whoever you decide.

3. It is a safe and easy to transfer body of law:

Corporations in Panama, due to the formality required for their constitution, entail that the document where it is constituted and the modifications are registered in the public registry. This formalism gives greater protection to the patrimony, the assets that the company maintains and the changes that are made in the composition or operation of the company are public information. It is important to clarify that the data of the company’s shareholders are not public knowledge, this corporate protection is important when it comes to protecting its assets, as mentioned in point one.
In addition, it is easy to transfer the company with the only exchange of the shares, whether bearer or registered. As it is a private transaction without the need for further paperwork, it is easy to handle and when it comes to a better life for the shareholder, If the legal vehicle is structured in the correct way, time-consuming probate processes can be avoided. and in some cases compromise the will of the original shareholder, in the event of the possible appearance of other alleged heirs.

4. Discretionary when issuing its shares:

Panamanian Public Limited Companies have the ability to issue shares in the manner that their shareholder decides, Article 20 of Law 32 of February 26, 1927 establishes: “the company will have the ability to issue one or more classes of shares, with the designations, preferences, privileges, voting power, restrictions or requirements and other rights determined by its corporate deed. “This point is relevant when talking about patrimonial protection because if necessary you can divide the shares of the company in the way that you decide between your heirs or legatees and in this way you establish before your death a real division [js1] of one or more real estate or other assets.

You can also trade or sell a portion of your assets without actually having to divide the asset, by selling shares in the company that owns the asset.

5. Possibility of merging with another corporation in Panama:

Having its assets under a Panamanian corporation, allows to unify them under a single legal body by merging the companies that own each of the assets, this avoids the payment of high sums of taxes in the case of real estate and preserves the distribution of shares to it. leave as a surviving company the merger to the one with the ideal or required share distribution, as established in Article 71 of Law 32 of February 26, 1927: “subject to the provisions of the articles of incorporation, two or more companies will be constituted under this law may be consolidated to form a single company. ”

Source: J Santos F