Panama Anonymous Bearer Share Corporations

Executive Summary on Panama IBC Anonymous Bearer Share Corporations – We are discussing the Panama corporations here. Please be advised that Panama is not the privacy and tax haven it was two years ago (date now is 07/2011). Panama has signed a Tax Information Exchange Agreement with the US which was ratified by their legislature. This opens up bank records and corporation records. They even had the nerve to make this treaty retroactive for three years before the signing date. Retroactive laws are a violation of the constitution of just about any nation. Yes, Panama does have a constitution. It appears that the government does not want to extend the protections of it's constitution to those banking there, owning Panama Corporations or Panama Foundations. They went further than the Swiss. Panama is also signing what they refer to as double taxation treaties with other nations. Panama has also been talking openly about ending corporation secrecy and we would of course assume this includes foundations. It would be foolish to eliminate corporation secrecy laws and not do the same for foundations. The Panama banks will not open accounts for people unless they appear physically at the bank. They also require two bank references generally speaking. We consider a bank reference letter to be a suspicious transaction as far as banks in many countries are concerned. The banks have been in the habit of not opening new accounts for Americans and Canadians. We suggest that you listen to the message that the government of Panama is transmitting and that message is not one designed to attract foreigners into their banking system. We will go on and further explain the problems currently associated with Panama.

Panama Corporations and Fraudulent Conveyance – When you have money in an offshore haven there is always the possibility that a financial enemy of some sort will pursue you. This is generally done through the court system of the country where the bank account is. We take great pains to make sure all the offshore banking jurisdictions we use are private and secure. This does not mean you really are in debt to the the alleged creditor. It can be emotionally charged. This occurs in divorce, bankruptcy, fights between business partners, supplier and customer disputes, etc. In many countries the court system is corrupt and can be used to get judgments against people in an unjust manner. The defendant may not be able to pay massive legal bills to defend against the action. This often happens in the USA. Well my point is now you have a financial enemy chasing you offshore and you bank in Panama. How will they get at your money. They will use fraudulent conveyance. This is the collection attorney catch all to bring an action offshore. Fraudulent conveyance is a term that describes an action when a defendant intentionally moves money out of the reach of a creditor and places it in another jurisdiction out of reach of the creditor. Panama laws allow the creditor to come to Panama and allege a fraudulent conveyance has taken place. This is a civil action. The creditor or their attorney files a case in Panama. The time period for such a filing is three years from the date of the transfer of the assets. So every time a transfer is made into the corporation a new three year window is opened up for a financial enemy to attack those transferred assets. The three year window has nothing to do with the date of the formation of the corporation. It can get worse.

Panama does practice reciprocity of judgments from foreign countries. If another country recognizes Panama judgments, they will recognize judgments from that country. This make understanding their reciprocity of judgment practices vague and not predictable. These reciprocity arrangements can change form time to time both ways. This is not a good thing. And it gets worse again.

The creditor can attempt to get a sequestro order against your assets or bank account even if the bank account is in the name of a Panama Private Interest Foundation or Corporation owned by such a foundation. This is a process where they get a freeze order on a specific amount of your assets pending the trial. In some countries this is called a lien or levy or attachment. They “should” have to post a 10% bond to freeze or sequestro your bank accounts or they could freeze the title to any real estate, boats, cars that the corporation or foundation owns. If they have an allegation for say a $100,000 debt. They would add in legal fees, costs, interest etc and say seek a freeze order for say $150,000 or so. They post a $15,000 bond and $150,000 of your money is frozen for several years pending the trial. Normally the plaintiff tries to increase the amount of the freeze order as high as possible. It gets worse yet. Panama foundation assets have been frozen. If the foundation itself directly does something actionable it can have it's assets frozen. A fraudulent conveyance into a Panama foundation would be one instance of this. And it gets worse yet!

The Panama courts can be approached to get a sequestro order without any names of bank accounts or account numbers. The court is set up to send a fax out to every Panama bank ordering the freeze (sequestro) that has an account where the personal name of the defendant is associated to it even if the account is in the name of a corporation or foundation. The banks then have to comply. Wait is gets much worse yet. Yes, it is hard to believe but keep reading.

In Panama if a person alleges that a civil fraud has been committed and files a civil suit they can ask the court for “Preventive Detention”. This means that you can go to prison awaiting the trail, based on nothing more than allegations contained in a civil lawsuit. The time wait is about three years in jail, could be less and could be more. Of course you could settle with the plaintiff from jail to get out. The plaintiff may be in a position to bargain for a high settlement. So you could be in jail on a civil allegation, pre-trial. If you think this is a lie check it out. It is 100% true. But wait it gets worse yet if you can believe it could be any worse.

A person or a corporation can retain counsel in Panama and never come to Panama. A Power of Attorney is executed from outside of Panama. They can have their lawyer do all this to you when they do not even set foot inside of Panama. Where we are going is you never get to confront your accuser. Let's say after months of serious stress from being in prison in Panama, a small fortune spent on lawyers etc., you manage to show the court the allegations were not based in fact and you get out of jail. Can you do anything to the person who deceitfully put you in jail? If they are not in Panama you are probably not able to do anything to them. So just because you were in Panama you can be attacked including prison on a civil allegation and your right to retailiate and recover damages is not there. Perhaps they may not be able to come to Panama, but they probably never came to Panama in their life and knowing what they know about the Panama Legal System they probably will never come to Panama. Talk about a stacked deck. I would say 95% of the people that move to Panama have no idea that this goes on. Don't despair there are better solutions available today.

The Belize Corporation, Belize Trust, Andorra Bank Account – Do not be frustrated about Panama and the negative changes they have made. The Belize Trust is a superior instrument to the Panama Foundation. It can protect against fraudulent conveyance, which no other trust or foundation does. It also protects against the decisions of foreign courts. The Belize Corporations are anonymous bearer share corporations and you get to keep all the bearer share certificates. The country of Belize is a former British Territory and has a logical legal system. Their banks speak English and have good customer service. They are not a dollarized economy like Panama which is just a matter of time until this causes major problems effecting their economy, banks, etc. The USA can print all the dollars they want, Panama can not do this. This is a big difference. We can use the Belize Trust to own a Belize or Nevis Corporation that banks in Belize. We can also use it in Andorra to be the beneficiary owner of a Belize or Nevis Corporation corporation banking in Andorra. Both Belize and Andorra have serious banking secrecy laws. None require a bank reference letter. Andorra even has numbered accounts which Panama eliminated many years ago. One can own allocated gold and silver in the Andorra bank through your numbered account and even trade stocks on all the exchanges around the world. In Belize one can have five currencies in their account and in Andorra ten. None of our solutions requires a bank reference letter. We suggest you follow these links to learn more about these offshore banking strategies:

Bank Accounts in Belize

Belize Trusts and Belize Bank Account

Andorra Offshore Bank Accounts

All this being said we will go on to explain the Panama Corporations even though we no longer offer these structures.

Panama Bearer Share Corporation Advantages:

Under Panama law a bearer share corporation can be formed that is owned by the possessor of the physical certificates of stock with no recorded owner on record anywhere. The government of Panama does not even know who the owner of the offshore corporation is. Shares for a Panama Corporation do not have to have the owners name on them and they do not have to be kept in Panama. The books and records do not have to be kept in Panama either. If the offshore corporation is Panamanian, banks in Panama, has a resident address in Panama yet has offshore derived income it pays no Panama taxes and does not even need to file a Panama tax return. This is a true bearer share corporation.

They have mostly been eliminated in the world since 9-11. When sending and receiving wires from a Panama Bank Account under the Panama Corporation name no one monitoring the wires can tell who the owners of the corporation are. It is just like the old Swiss numbered bank accounts that are long gone except a corporation name is used instead of a number. Panama has 400,000 corporations registered for a reason – it is the best jurisdiction. Each offshore corporation pays $300 a year in tax (that is it for taxes by the way assuming your money is offshore derived), which totals $120,000,000 and this is for a country with 2.9 million people. The Panama Canal only nets Panama about $335,000,000 and requires 9,000 employees. How many people are required to run a corporate filing dept., maybe 200? Panama is a country very unlikely to violate corporate privacy, which is why all these corporations are here.

No Corporation Ownership Registry in Panama

The lawyer in Panama may only have knowledge of the person who formed the company but not knowledge of others he or she may have transferred the corporation to since formation. Such transfers need not be reported and the new owner(s) need not be on file anywhere they just need to have the shares of the corporation physically. The transfer process could be completed in minutes if not seconds. The new owner(s) may reside outside of Panama, the new owners could be an offshore corporation, foundation or be a trust in another country, etc. making any trails extremely difficult, time consuming, expensive and in general for most people not feasible to follow especially when you consider that no one really knows how many times the ownership may have been transferred. There is no ownership database for anyone to snoop into, period. Thus the possibility of a fishing expedition is non-existent.

Remember Panama has no tax treaties of any sort with any country and this is where fishing expeditions come from. The nominee Directors we provide can be appointed and thus are not owners and their names are recorded publicly. We provide the three required directors for you complete with signed undated letters of resignation and they do not know who you are. You can effectively transfer the stock certificates privately with no record of the sale appearing anywhere. The new owner can replace the directors with his own directors at will. We can provide a blank bill of sale for the corporation signed by the nominee directors as an optional extra service, see our price list. If you do not wish to have nominee directors on your corporation we can use three different anonymous Panama Bearer Share Corporations instead of nominee directors which makes for a more confusing harder to follow trail but it can be so hard to follow the banks will not let you open an account because the due diligence would be too difficult.

Anonymous Corporate Ownership of Assets

A Panama Bearer Share Corporation can own bank accounts, real estate, boats, planes, cars, art, jewelry, businesses, and other valuable assets all without revealing the actual natural persons who own the corporation (the bank records is covered by Panama Bank Secrecy Laws). Additional complex strategies can be employed using the lawyer to perform certain functions for the corporation. You could have a Panama Foundation own the shares of the Panama Corporation so you do not own the corporation and no one under Panama law can own a Foundation. You control the corporation and foundation through a general power of attorney signed, notarized and apostilled by the nominee directors. You would be the signatory on the respective bank accounts. The Foundation can be formed by an entity we provide, it can have nominee council members or a corporation in place of nominee council members, and you could elect to not even be a beneficiary if you so desire. Now we can even have the foundation not have a bank account. Now we add in a formal contract making you the protector of the corporation, which is not, recorded publicly anywhere, most private. Then we add in a formal agreement making you the investment manager or real estate manager, etc for the corporation and foundation including terms of compensation and expense reimbursement all signed, notarized and apostilled by the nominee directors or council members. In Panama there is strong privileged communication between the attorney and the client. To learn more about these strategies go to:

http://www.panamalaw.org/panama_foundations.html

http://www.panamalaw.org/foundation_protectors.html

http://www.panamalaw.org/bullet_proof_asset_protection.html

https://www.panamalaw.org/order.php

Panama Corporation Banking

A bank anywhere in the civilized world will require a natural person beneficial owner for any bank account and will also require identity documents for that person so the bearer share Corporation may not be able to conduct banking matters completely anonymously. In Panama there is serious bank secrecy laws in place providing for criminal and civil penalties for the violating bank. You could sue a Panama bank for violating bank secrecy and they have deep pockets. The Panama Bank Secrecy Laws combined with the Bearer Share Corporation formed in Panama using a world class Panama Bank provides the most secure and private asset protection scenario currently available in the world.

Let us do a quick analysis on the privacy provided to you under this scenario. You would have the same privacy if you used a Panama Anonymous Bearer Share Corporation or a Panama Private Interest Foundation. Wires come and go from the corporate account. Today in the post 9/11 world many governments and other entities monitor wire transfers. No one can tell whom the natural persons are that own the corporation when a Panama Bearer Share Corporation is used. If you were using a corporation from another country all they would need to do is open another computer screen and look up who the owners are. This does not work in Panama because there is no recording of owners. This in essence provides the privacy of the old Swiss Numbered Bank Account in that it cannot be traced to any persons. Welcome to Panama.

Attorney Services

Your attorney may act as your agent and collect rents on an apartment building or office building your Panama Bearer Share Corporation owns to keep the ownership of the property concealed from the tenants and others. The attorney merely forwards the rent proceeds to you or wires them to your bank account anywhere in the world. This is perfectly lawful in Panama. Your attorney could handle an auction where your corporation sells its art collection. The attorney collects the auction proceeds and forwards them to your bank anywhere in the world. Your attorney can buy or sell a yacht for your bearer share Corporation, handle the yacht registration in Panama and you can go sail around the world with your corporate stock certificates locked up in a vault box in your Panama bank. Panama bearer share corporations can be completed in 2-3 business days after all the information is submitted.

Panama Corporation Unique Tax Benefits

One benefit is there is no tax imposed by Panama on any offshore-derived income and there is not even a need to file any tax returns for the corporation if all the income was offshore derived. If you maintain an office in Panama, have a phone in Panama, have a Panama Corporation, and even have a bank account for the corporation in a Panama Bank yet there is still no need to pay taxes or even file tax returns if all the income is offshore sourced, in other words your income comes from payments made to you in Panama from entities not in Panama. For example if you decide to open a hot dog stand in Panama then you would need to pay taxes on this income since it would be derived from within Panama. If you sold goods to customers who were not in Panama and they wired you money into your Panama bank account from outside of Panama this would be offshore-derived non-taxable income.

Panama Corporation Privacy

There is no registry in which to record owners of Panama Bearer Share Corporations. There is also no registry to record transfer of the corporation ownership. To transfer the ownership of the Bearer share Corporation one need only hand the new owner the stock certificate. You could transfer ownership 12 times a day if you wanted to without reporting it anywhere or to anyone in the world.

Panama Corporation and Real Estate Ownership

Anonymous Panama Corporations may own property anywhere in the world. To sell the property one merely transfers the shares of the corporation along with a bill of sale signed by the nominee directors who don’t know who you are (we can as your law firm and corporate resident agent assist with such agreements at your request). You could also have a general power of attorney and sell the real estate using this platform of control. This could reduce taxes resulting from the sale of the property, since the property is not really being sold it is the corporation that owns the property that is being sold, the property is still owned by the same corporation.

Remember there is no reportage of the sale of the corporation required in Panama. A Panama Corporation (or Foundation) can own real estate anywhere in the world and this makes the ownership anonymous. You can transfer real estate (or a car, boat, plane, art collection etc.) to the Panama Corporation or Foundation in return for an annuity and we can supply you with such an agreement signed by the nominee directors. You could also arrange for your Panama Corporation to make a loan against the real estate (or boat, plane, art collection etc.) thus removing the equity in the property sheltering it from potential financial enemies.

You could even do this with a line of credit secured by a mortgage for the line of credit, which you need not ever draw on. For more on these asset protection strategies see our section on real estate asset protection and in our price section we list some of these formal agreements we can supply to help you document the transactions formally.

Panama Company used to Trade Stocks, Bonds, Forex, etc.

A Panama Corporation can invest anywhere in the world. Panama has no capital gains taxation. A Panama Corporation can also get a CD in a Panama Bank with up to 7% interest rates for 5 years, again no taxation imposed by Panama. We can assist you in the opening of a Panama Stock Brokerage account where you can invest in 30 markets around the world and of course there is online access. We can also get you a Panama stock brokerage account, which has secrecy almost the same as Panama Bank Secrecy that would cover your stock trading account. There are many possibilities.

Be a Consultant for Your Panama Corporation

Let us say you are a highly paid sales representative, broker, consultant, software developer etc. who works for entities around the world, not just in your home country. You form an anonymous Panama Corporation and work for the corporation. Your clients would now pay the corporation directly and in turn the corporation pays you according to your wishes. There are no rules for a Panama Corporation in terms of expenses. This means the corporation can pay all of your medical expenses (self-insure) including elective health care like Plastic Surgery, Cosmetic Dentistry, etc. The corporation directly from its Panama bank account pays the health care provider by wire transfer for your elective procedures.

The offshore corporation can own your auto, boat, plane etc. used for company business. If you go to Nassau on business frequently the corporation in its overall wisdom may decide it is more advantageous to purchase a condo in Nassau rather than incur hotel expenses. The corporation may determine it is best for you to fly first class on business trips and pay for your tickets directly from its bank account by wiring funds to the travel agent directly. The corporation in its overall wisdom may decide to pay for your legal services as a bonus and pay lawyers representing you directly from its bank account by wire transfer. It is always best to have a tax lawyer in your own jurisdiction advise you on any tax questions.

Panama Corporations can serve as a Holding Company for Intellectual Property, Copyrights, Patents or Royalties. The Panama Corporation can purchase or own these rights to use or sell licenses to this property. You could transfer these rights to the Panama Corporation in return for an annuity or other property the corporation may transfer. This could have tremendous asset protection value since the assets of the corporation belong to the corporation, not you.

Additional Advantages of Company Formation in Panama:

• Yearly fees Panama Government charges for a non-resident Panamanian Corporations is priced very reasonably at $300.00
• There is no taxation in Panama on any transaction or business activity taking place outside of Panama.
• Panama requires no minimum amount of paid in capital for opening a S.A. bearer share Corporation
• There is no law requiring disclosure of the beneficial owner(s).
• No requirement to file any annual returns or financial statements.
• For a S.A. Corporation in Panama the shares may be issued in physical bearer share form with or without any par value assigned to the shares. The only documents publicly recorded are the articles of incorporation which typically will list the officers and directors (these are the nominee directors) who are not owners, plus the registered agent (the registered agent who was on record at the time the incorporation was filed). The actual owners (possessors of the bearer shares) do not appear in any public record of any sort and the government of Panama does not even know who they are.
• Annual general meetings of either shareholders or directors of the corporation are not mandated or required and can be held anywhere in the world even online.
• The corporate bookkeeping/financial records of the Panama Corporation can be stored anywhere in the world which makes legal discovery difficult to say the least especially if they are encrypted and stored on a server somewhere in the world.
• With a Panama S.A. corporation the registered agent does not have any obligation to keep or maintain any records for the corporation, this makes legal discovery difficult to say the least especially when the registered agent is a lawyer so attorney client privilege is now entered into the equation.
• Price is only (no longer offered) for the Panama SA Corporation complete including incorporation papers, nominee directors, taxes for first year, translation, nominee directors resignation letters, resolution from the board of directors authorizing the opening of the bank account, general power of attorney, etc. (no hidden fees or costs) and this fee also includes the Panama Bank Account opening without having to come to Panama. Normally the bank requires the following: a verified passport and drivers license, bank reference letter, business reference letter and other simple things the bank requires plus a minimum deposit of (no longer offered) . The fee is (no longer offered) if you prefer a bank account with secrecy in another jurisdiction (Belize, Saint Vincent, Nevis).
• Annual maintenance yearly fees are only (no longer offered) including Panama taxes, registered agent fees, directors etc.

Technical Information for Company Formation in Panama

This is detailed and historical information for those of you that like legal details.

Since the year 1927, the Republic of Panama has a special law regarding corporations. The Panamanian Company Law encompasses all the important aspects pertaining to this type of moral person, without making distinction amid the place were the company carries out its’ activities or amid the source of it’s income, this is to say, the Panamanian Law does not distinguish amongst "in-shore" and "off-shore" companies. Panama has been able to invigorate and to ameliorate the corporation Law throughout time by means of decrees and ordinances; managing to keep intact it’s simplicity. The Panamanian Company Law respects the principle of free will in private matters, and it is materialized in the Articles of Incorporation of each company.

The Panamanian fiscal system is based on the principle of territoriality, this is to say, every company, be it Panamanian or foreign, which carries out activities and/or obtains income from a Panamanian source is subject to every applicable fiscal regulation and to the payment of a fixed annual tax of US$300.00 dollars of the United States as of the date of it’s incorporation. On the other hand, those companies which do not carry out activities within the Panamanian territory and which do not obtain income from a Panamanian source, are only subject to the payment of a fixed annual tax of US$300.00 dollars of the United States as of the date of it’s incorporation.

It is important to point out that the fees and expenses arising from the incorporation of a Panamanian company and of its further continuation are economical and accessible to everyone and that the registration fees are not determined according to the amount of its stock capital.

The Panamanian Company Law is simple and practical, enabling the uncomplicated formation of a company, its administration and/or its modification. On an equal basis, the Law enables the re-domiciliation of a company to or from Panama by means of a simple procedure.

Panama defends the client-attorney privilege as long as the issues arising from each particular case are in accordance with the Law, public order and with the good moral habits, think no fishing expeditions or any frivolous penetrations of the attorney client privilege. The attorneys are obliged to know their clients and to dispose of sufficient mechanisms to identify them.

Two or more persons, from any nationality, with or without domicile in the Republic of Panama, may create a Panamanian corporation, for the accomplishment of any lawful objective, having to comply solely with the conditions required by the Law. It is important to mention that the constitution of a corporation is a commercial act, reason for which the persons who constitute it (“the subscribers of the Articles of Incorporation”) need to have full legal capacity and they shall be able to dispose liberally of their assets.

The Articles of Incorporation may be subscribed in the Republic of Panama or in any part of the world and said document may be prepared in any language. The formalities required by the Panamanian Law for the incorporation of a corporation are:

1. The name and address of the subscribers of the Articles of Incorporation.
2. The name or identification of the company, which may not be identical to that of an existing company. This name may be expressed in any language and it shall always contain a word, phrase or abbreviation that indicates that a corporation is being created, for example: Corporation, Corp., Sociedad AnÛnima, Incorporated, Inc., etc. If the company is intended to carry out banking activities, insurance activities, to function as a trust or as a trustee, a word or phrase indicating the above mentioned activities needs to be added, for example: Bank, Banco, Insurance, Risk Management, etc.
3. The objectives and purposes for which the company is created. The Law does not require an exhaustive enumeration of all the objectives and purposes pursued by the company. If the company is intended to carry out banking activities, insurance activities, to function as a trust or as a trustee, these activities have to be clearly mentioned in the Articles of Incorporation.
4. The amount of the company’s authorized capital, the way in which it is to be divided and the value of the shares of stock to be emitted. The authorized capital may be expressed in any legal currency and the shares that compose it may have or may not have a nominal value. It is important to note that there is no obligation to disburse the capital in order to initiate with the activities of the company.
5. The qualification of the shares of stock which integrate the company’s authorized capital (nominative, to the bearer or both), their different classes and categories if they exist and the special rights and obligations for each particular case.
6. The amount of shares of stock each subscriber is engaged to subscribe.
7. The domicile of the company. Normally the domicile indicated is that of the company’s Registered Agent, however, the company may celebrate its meetings and its assemblies in any part of the World.
8. The duration of the company, that may be limited or unlimited.
9. The number, name and domicile of the Directors and of the Officers. The Law requests the existence of at least three (3) Directors, which may be physical persons or legal entities, from any nationality and which need not be shareholders. The Officers shall also be at least three (3), this is to say: a President, a Secretary and a Treasurer, and one persona may hold various posts at the same time. A special signatory right (individually or joint) may exist as long as it is included in the Articles of Incorporation or in a document that needs to be registered in the Panama Public Registry.
10. The name and domicile of the Registered Agent, which shall be an attorney or a law firm from the Republic of Panama.
11. Any other lawful clause, which the shareholders or the subscribers desire

Once all of the above mentioned formalities have been accomplished, the document has to be presented to a Notary Public of the Republic of Panama, who will prepare a Public Deed based on the document, which is afterwards registered in the Panama Public Registry. The corporation will deploy its effects in relation to third parties as of the moment of its registration in the Panama Public Registry.

Offshore Legal Associates Law Firm stands ready to assist you with your company formation in Panama.

Click here to read complete Corporation Law for Panama.