Panama Companies:

Panama Corporation (Sociedad Anonima):

The corporation limited by shares is the most frequently used corporate form in Panama, and is the usual choice for an offshore operation.

Corporations are formed under the Law No. 32 of 1927 and the Commercial Code (Decree-Law No. 5 of 1997, Article 5). A corporation is formed by two subscribers (or nominees in the case of absent foreign subscribers) who execute the Articles of Incorporation (Statutes) before a notary and then record them at the Public Registry Office, paying a capital tax (minimum $60.20 on the usual capital of $10,000 - see Direct Corporate Taxation for details of tax on higher amounts of capital). There is an annual registration fee of $300 (2006 level).

Following incorporation, only one shareholder is necessary. Shares can be of various classes, can have par value or not, may be registered or bearer. There is no minimum capital, and no paying-up rules, except that no-par-value and bearer shares must be fully-paid when issued. Strict regulations now apply to bearer shares: the registered agent must keep the bearer share certificate in safe custody and must notify the Registrar about such shares.

There must be at least three directors, and their names must be in the Articles as filed; changes to directors must also be filed. Each corporation must have a resident Panamian agent (a lawyer), named in the Articles; there are no other filing requirements unless the Articles are changed or the corporation is merged or dissolved.

Panama Foreign Corporation:

A foreign company can be registered in Panama by depositing the following documents at the Public Registry Office:

A notarised Spanish translation of the Articles of Association;

A Board minute authorising the Panamian registration;

Copies of the most recent financial statements;

A certificate from a Panamian Consul confirming that the company is organised according to the laws of its place of incorporation;

Notification of the allocation of capital to the Panamian operation. Capital taxes on formation and annual registration fees are payable as for Panamanian corporations (see above).

A foreign company can transfer its 'seat' (meaning roughly speaking the place from where its directors control the company) to Panama, and will then be subject to Panamian laws regarding public policy, while remaining under its originating law in other respects. A foreign company operating in Panama but not registered there may be sued in the courts of Panama but does not have the right to sue.

Version date: 07.05.06