Company Formation Survey 2008


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		1. Company law	Law 32 of 26 February 1927 on Corporations, complemented by Decree Law No. 5 of 2 July 1997; Law 25 of 1995; Executive Decree 418 of 1995.
		2. Types of company:	Corporations (Sociétés Anonymes with Limited Liability); Private Foundations; Limited Liability Companies (S.R.L).
		(a) type of company preferred for international transactions:	Corporations and Private Foundations.
		(b) shareless companies:	Not requested by clients for carrying out international transactions.
		3. Capital requirements:	No minimum paid-in capital and no time limit in which capital must be paid up.
		4. Costs to incorporate, excluding government fees:	Approximately USD150 for minimum registered Authorised Share Capital of USD10,000, plus notarial expenses (not including registered agent fee), plus first year Annual Franchise Tax of USD250.
		5. Fees paid to authorities to incorporate:	USD60 for a minimum capital of USD10,000, plus first year Annual Franchise Tax of USD250,? plus USD60 notarial expenses.
		6. Annual fees paid to authorities:	USD300 (Annual Franchise Tax), irrespective of the level of the authorised share capital.
		7. Taxation rates applied to companies generally:
		(a) the taxation of companies in 2 (a)	No tax on any transactions or business activities carried on outside Panama; no tax on any foreign source income. Local income tax rate 30%.
		8. Method of incorporation:	Notarial protocolisation and registration of articles of incorporation / foundation charter ? in Public Registry.
		9. Who may incorporate - specify what, if any, local representatives/ professionals required?	Two persons, either individual or corporate, of any nationality, usually lawyers or their staff members. One person in case of a Private Foundation.
		(a) are ready made companies available?	Available for immediate delivery. Company name, directors, officers and foundation council members can be changed in three to five working days. Special governmental acceleration fee obtains the change in a few hours.
		10. Length of time to incorporate:	Two to four working days.
		11. Minimum members:	One.
		12. Registered office:	Registered agent is compulsory, but registered office is not.
		(a)Can the registered office be a bank/ lawyer/ accountant's office (brass plate)?	Registered agent must be a lawyer or a law firm authorised to practice in the Republic of Panama.
		13. Directors and secretary:	Three directors minimum and three officers minimum (President, Secretary and Treasurer, either individual or corporate). One corporate council member is enough for Private Foundations.
		(a) Must a director/ secretary be resident?	No.
		(b) Are Corporate Directors allowed?	Yes.
		14. Appointee directors/ secretary possible?	Yes; no nationality requirements. Can be furnished by the client.
		15. Amount of fees payable to appointee directors/ secretary:	Varies from USD500-700 per year (three directors/ three officers).
		16. Meetings:	Shareholders/board meetings - as established in the articles of incorporation. May be held anywhere in the world. No periodic meetings are required by law.
		17. Annual return:	None for offshore companies and private foundations. Required only of companies operating inside the Panamanian territory.
		(a) Must financial statements of a company be audited?	Not for offshore companies.
		18. Is disclosure of profits required by filing balance sheets with annual returns?	Not for offshore companies and private foundations. Then income tax returns are required.
		19. Are there any exchange control or other financial restraints imposed upon a company?	No exchange control. The US Dollar is the currency of Panama and US coinage circulates freely.
		20. Companies formed in the last year:	71,178 corporations up to 31 December 2007. 5,395 Private Foundations up to 31 December 2007.
		21. Number of companies on the company register altogether:	529,073 Active Corporations. 26,357 Private Foundations.
		22. How, if any, is migration into and out of the jurisdiction achieved?	Re-domiciliation of companies and private foundations to Panama is allowed. Re-domiciliation out of Panama depends on new jurisdiction. Companies and private foundations remain effective in Panama if not dissolved in Panama.
		23. Is migration out of your country provided for?	See above.
		24. Any amendments to company law over the last 12 months:	None.
		25. Anticipated amendments to company law over the next 12 months:	None.
S I T E M A P BACK TO TOP			Compiled by Mossack Fonseca & Co