The Republic of Panama has always played an important role in international commerce because of its geographic position, well-trained bilingual man power, the U.S. dollar as our currency, an excellent telecommunications system and political stability.

All of these factors, together with Law No. 32 of 1927 covering the organization and operation of Panamanian corporations, have helped make Panama one of the most important corporate centers in the world and have made Panamanian corporations accepted by bankers, investors and governments.

Advantages of Panama

The advantages which Panama offers as a tax heaven may substantially benefit persons and companies wishing to use Panama based corporations for holding purposes or for directing business activities in different parts of the world. Among the many advantages of Panama, an interested party will find the following:

1. Privileged geographic position and infrastructure.

2. Unique banking system, which includes 82 banks with offices in Panama, among them some of the largest and best known banks operating internationally, supported by strong bank secrecy laws.

3. No exchange controls. Neither registration with the authorities nor any permits are required for any transaction involving the receipt or transfer of funds.

4. The monetary system of the country uses the international free U.S. Dollar as its medium of exchange.

5. No taxes on capital (stocks, bonds and other investments) held by Panama corporations.

6. The income tax law of Panama specifically exempts from its provisions the following:

a. Directing, from an office established in Panama, operations which are completed, consummated or take effect abroad;

b. Invoicing, from an office established in Panama, the sale of merchandise or products for a sum higher than that at which said products or merchandise had been invoiced to the office established in Panama, provided that said merchandise or products are handled exclusively abroad;

c. Income from International Maritime commerce of vessels registered under the Panama flag.

d. Corporate dividends or participations when said dividends or participations are derived from income not produced within the territory of the Republic of Panama, including the income derived from the activities mentioned in points a and b above.

e. The interest earned for funds kept in time deposits or savings accounts.

7. There are no tax treaties with any other country.

8. The Colon Free Zone offers unique opportunities for the duty free storage, repackaging and reshipment of goods of all sorts.

How to Incorporate

Usually, the client will simply fax or mail to us a request to organize a Panamanian corporation and will provide the name of the corporation, the names and addresses of the Directors, the names of the Officers and the desired capital. Once this information is received, it will take no more than five (5) working days to protocolize the Articles of Incorporation and register them in the Public Registry.

Incorporation Cost

The incorporation cost of a Panamanian corporation with a standard capital of US $10,000.00 covers the following: notarial and registration fees, share certificates, first year of annual government license tax and registered fees.

Points of Interest

With respect to cost and several other points, which may be of interest to you, we are pleased to report as follows:

1.Name reservation.

After its availability has been verified, the name of a corporation may be reserved in the Public Registry for a period not exceeding thirty (30) days, by filing a written petition before the Public Registry. After this period has expired, the name reservation will lapse without the need for a notation by the Registry in said respect.


There are no legal requirements regarding a minimum of capital. According to law, there is no need to state that the capital subscribed has been paid in. Panamanian law allows 100% foreign ownership of an international Panamanian corporation.


As long as the corporation is not doing business in Panama, it does not incur in any tax liabilities.

4.Maintenance fees and surcharges.

For subsequent years after the incorporation, it only costs US$ 300.00 annual license tax paid to the government plus the amount payable to our firm as legal and intermediary fees plus the fees of the Registered Agent of the corporation in Panama who is an associate law firm duly registered and operating in Panama. The due date of the annual license tax is as follows: 30 June of every year for companies incorporated in the first semester of the calendar year and 31 December of every year for companies incorporated in the second semester. The surcharge for late payment of the annual license tax is US $50.00. In addition to this surcharge, a restoration fee of US $ 300.00 will be required to restore the company after the second period of non-payment.

5.Amendments to the Articles of Incorporation.

Subsequent amendments to the Articles of Incorporation and elections of officers and directors must be filed for registration with the Mercantile Registry of Panama.

6.Registered Agent.

Regarding the appointment of the Registered Agent in Panama, which is required by law, the usual procedure is to appoint a local law firm through our office, as per our recommendation.

7. There are no tax treaties with any other country.

The corporation is not deemed to have legal existence, with respect to third parties, until the date it is registered in the Mercantile Registry. Therefore, business should not be conducted under the corporate name prior to said date.

8.Power of Attorney.

The corporation may execute in favor of one or more individuals a broad Power of Attorney to operate the company.

9.Corporate Bodies:


With the exception of corporations engaged in the retail business in Panama, stockholders need not be nationals or residents of Panama. Meetings of stockholders may be held outside of Panama, if so provided in the Charter. Stockholders may be represented by proxy.

b.Board of Directors:

There must be at least three (3) directors, who may be either natural persons or corporations or a combination of both, but unless otherwise provided in the Articles of Incorporation, directors need not be stockholders, nor nationals or residents of Panama. Meetings of directors may be held outside of Panama, and directors may be represented at meetings of the Board by proxy, who need not be a director. The Board of Directors is elected by the stockholders, but vacancies, whether resulting from an increase in the authorized number of directors or otherwise, may be filled by the vote of a majority of the directors then in office. There must be at least a President, a Secretary and a Treasurer but the corporation may also have additional officers, agents and representatives, who shall be chosen by the Board of Directors. The same natural person or corporation may hold two or more offices, if so provided by the Articles of Incorporation or by the By-Laws.


A corporation formed and in good standing under a foreign legislation, may opt to continue its existence under Panama laws, notwithstanding the provisions of the legislation of its country of origin, by filing in the Public Registry, for recordal, the following documents: evidence of its good standing; certified copy of the corporate resolution authorizing the continuation; articles of incorporation subscribed in accordance with the laws of the Republic of Panama, with an indication that they substitute the incorporation document of the foreign corporation.

• A corporation formed and in good standing under a foreign legislation may conditionally register in the Public Registry its continuation in the Republic of Panama, under the condition that said continuation becomes valid (effective) upon the registration of a declaration to that effect by the corporation’s duly authorized representative or attorney-in-fact.

• A corporation formed in accordance with the laws of Panama may, as provided for in its articles of incorporation or amendments thereto, continue under the laws of another country or jurisdiction as long as the laws of said country or jurisdiction so allow it and the corporation is up to date in the payment of the annual license tax to the government of Panama.

Trustee Services In addition to company formation and management, we may also provide trustee services and advise with respect to the establishment of trusts subject to the Panamanian trust legislation (Law No. 1 of January 5, 1984).

Please contact us for further information on our Trustee Services on