GENERAL INFORMATION
The Republic of Panama, with an area of approximately 76,900 sq km, is located
between Costa Rica and Colombia, forms the narrowest and lowest portion of the
isthmus that links North and South America.
POPULATION
The population of Panama is approximately 2.4 million, about 52% of which are in
urban areas.
POLITICAL STRUCTURE
The Isthmus of Panama was discovered in 1501 by
Rodrigo de Bastidas and Vasco Nuņez de Balboa, who had a leading part in the
establishment of Santa Maria La Antigua del Darien in 1510, the first permanent
settlement on the mainland of the Americas. In 1513, Balboa led an expedition,
in Panama, which discovered the Pacific Ocean.
Pedro Arias Davila founded Panama City on
15th August 1519, almost a hundred years before Jamestown; the first permanent
English settlement in North America was founded. Panama was a Spanish
colony until 1821 when it became part of
the Gran Colombia of Simon Bolivar. In 1903, Panama broke its alliance with
Colombia and became an independent republic.
The executive branch of the Government is
at present composed of a President and two vice-presidents, elected for a
five-year term by direct election.
INFRASTRUCTURE AND ECONOMY
The Colon Free Zone is located on the Caribbean side of the Isthmus of Panama
near the Atlantic entrance to the Panama Canal. This Free Trade Zone is the
second largest in the world after Hong Kong.
Operations and transactions taking place in
the Free Trade Zone are subject to a special tax treatment whereby imports from
other parts of the world and re-exports to other countries are exempted from any
import or export taxes imposed by Panama. Income earned from re-exports is taxed
at specially reduced rates.
LANGUAGE
Spanish is the official and spoken language. English is also spoken widely in
urban areas and is used daily in commerce and international trade.
CURRENCY
United States Dollar.
EXCHANGE CONTROL
None.
TYPE OF LAW
Based on Spanish Civil Law with many Common Law influences, particularly
regarding Company Law, which is based on the Delaware Model.
PRINCIPAL CORPORATE LEGISLATION
Corporation Law No. 32 of the 1927 Commercial
Code, Decree Law 5 of 1997 and Executive Decree 296 of 1997.
COMPANY FORMATION
TYPE OF COMPANY FOR INTERNATIONAL TRADE AND INVESTMENT
Generally, corporations are incorporated
under the Corporation Statute Law 32 of the 1927 Commercial Code. Limited
Liability Companies and Limited Partnerships are used also.
PROCEDURE TO INCORPORATE
By presentation of the proposed corporation’s signed Articles of Incorporation
before a Notary Public who creates a Public Deed for registration at the Public
Registry.
RESTRICTIONS ON TRADING
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.
LANGUAGE OF LEGISLATION AND CORPORATE
DOCUMENTS
Spanish and certified English translations.
REGISTERED OFFICE REQUIRED
Yes, must be maintained in Panama at the address of the Registered Agent.
NAME APPROVAL REQUIRED
Yes.
shelf COMPANIES AVAILABLE
Yes.
TIME TO INCORPORATE
One day, subject to name approval.
NAME RESTRICTIONS
A name that is similar to or identical to an existing company. Names of well
known companies incorporated elsewhere or a name that implies government
patronage.
LANGUAGE OF NAME
Names may be expressed in any language using the Latin alphabet. A Spanish or
English translation may be requested by the Registrar.
NAMES REQUIRING CONSENT OR A LICENCE
Bank, building society, savings, insurance,
assurance, reinsurance, fund management, investment fund, trust or their foreign
language equivalents.
SUFFIXES TO DENOTE LIMITED LIABILITY
All Panamanian corporations must end with the suffix Corporation, Incorporated,
Sociedad Anonima or the abbreviations Corp, Inc or SA. They may not utilise the
suffix Limited or Ltd.
DISCLOSURE OF BENEFICIAL OWNERSHIP TO
AUTHORITIES
No requirement.
SHARE CAPITAL, TAXATION, LICENCE FEES AND COMPLIANCE MATTERS
AUTHORISED AND ISSUED SHARE CAPITAL
The standard authorised share capital is
US$ 10,000 divided in to 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. The minimum issued capital is either one share of no par value or one
share of par value.
CLASSES OF SHARES PERMITTED
Non-voting shares, preferred shares, bearer shares and registered shares.
BEARER SHARES PERMITTED
Permitted, have to be paid for in full.
TAXATION
No corporation tax is levied on non-Panamanian
sourced income.
DOUBLE TAXATION AGREEMENTS
None.
LICENCE FEES
Annual Franchise Tax of US$ 150.
FINANCIAL STATEMENT REQUIREMENTS
No requirement if income is of non-Panamanian sources.
STRUCTURE OF MANAGEMENT
DIRECTORS
Both corporations and natural persons may act as directors and the minimum
number of directors is three. They may be of any nationality and need not 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.
COMPANY SECRETARY
A company secretary must be appointed, who may be a natural or corporate person.
The company secretary may be of any nationality and need not be a resident of
Panama.
SHAREHOLDERS
The minimum number of shareholders is one.
