Panama Incorporation - How to Choose An Offshore Agent

Incorporating a corporation or forming a foundation in Panama is quite easy and speedy; in fact if all the necessary documents and funds are received in a reasonable time frame incorporating in Panama could take one day. The Republic of Panama is one of the most well respected offshore jurisdictions today registering thousands of companies and forming scores of foundations each year. Panama began incorporating corporations as far back as 1927 and its corporation laws have been the foundation for many offshore jurisdictions.

In order to register/ incorporate a Panamanian Foundation or Corporation the assistance of an agent must be employed by the client. The incorporation of corporation and formation of foundation in Panama can only be processed through registered agents. In Panama these agents are mostly lawyers and law firms who work on behalf of clients. It is very important to choose the right agent as this determines how fast a corporation can be incorporated. Choose an agent who has experience in incorporating companies to ensure that the process goes smoothly. The client should ensure that the agent is registered in Panama as only agents registered in Panama can incorporate. It is very important that clients check the background of agents to make certain that the services provided are up to standard.

Acquiring a second citizenship is a big decision but a necessary one given the times we live in. Some countries impose residency requirements for obtaining citizenship but there are those where two systems operate whereby there are residency requirements for citizenship but there is also a citizenship by investment route that allows nationals of foreign countries to apply. The latter qualify to apply by investing economically through real estate or an industry. Certificates of Naturalization are issued to successful applicants while a passport can be applied for once citizenship is granted. Having a second passport provides a greater sense of safety and makes travel easier. The Financial Services Commission is responsible for regulating and proposing legislation and enforcing regulatory measures for second citizenship programs.

To incorporate a corporation in the Republic of Panama two persons/subscribers are needed to sign the articles of incorporation. These persons can be of any nationality and the articles must ne notarized by a Notary Public of the Republic of Panama. A company’s name must be given but it is wise to prepare substitute names since according to the legislation a company will not be registered if a company is already registered with the same name. Furthermore a corporation will not be incorporated if its name is similar to that of an existing company that is causes confusion or misleads people. The name of a Panama corporation must end with Corporation or similar corporate endings or abbreviations. The names can be in any language.

The articles of Incorporation of a Panama Corporation must include the following:

  • The objectives/purposes of the corporation
  • Types of shares to be issued
  • Number of shares to be issued
  • The names and addresses of the three (3) directors of the company
  • The startup capital
  • The address of the corporation
  • The prolonged existence of the corporation
  • The by-laws of the corporation

The process for registration of a corporation in Panama can take between 1-7 days. A copy of the articles must be presented to a Notary Public in the Republic of Panama. A Public Deed prepared by the Notary using the articles is then registered at the Panama Public Registry making the corporation a legal entity in the Republic of Panama.

The laws which govern the registration of Panama Foundations were passed in 1995. Since then a number of foundations have been set up in the jurisdiction. Panama Foundations are primarily used as a vehicle to ensure estate protection and to reduce tax liability. Panama foundations are easy to form. The Panama Foundation laws states that one or more persons or a corporation can create a foundation. To create a foundation a foundation charter must be fashioned. A foundation has a founder who is the person(s) who creates or establishes the foundation charter, a council which is made up of three or more persons who acts as directors of the foundation, a protector who owns and controls the assets in a foundation and the beneficiaries who upon the dissolution of the foundation are entitled to a percentage of the foundation as cited by the laws of the foundation charter.

The Panama Foundation Charter contains the following:

  • The initial capital of US$10,000
  • Purpose of the foundation’
  • Names and addresses of the council members
  • Lifespan of the foundation
  • How the fund is to be dissolved and how the assets are to be distributed
  • The beneficiaries of the foundation
  • The country of registration
  • Name and address of the agent
  • The by-laws

There are no obligations to register a Panama Foundation Charter in the Registry or any other authority. The foundation is basically governed by the laws contained in the foundation’s buy-laws. The formation of a Panama Foundation usually takes between 1-5 days. The incorporation of Panama Corporation and Foundations are handled efficiently by trustworthy agents. Foundations and Corporations registered in Panama pay no local taxes on capitals gained outside of Panama.

 
 
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