Panama Corporation

Introduction to Panama Corporations – Panama is a unique jurisdiction for Corporations. The Panama Corporations are unlike those found in any other offshore jurisdiction with unique features and benefits.

Panama Corporation Types – In Panama the most popular corporation is the Anonymous Bearer Share Corporation which is also called the Sociedad Anonima in Spanish. Panama also has the LLC but it is not a very popular type of offshore corporation since the advantages with the bearer share corporation are far superior. Our law firm does less than 1% of our offshore corporations as an LLC.

Panama Corporations, Sociedad Anonima - The unique features of this offshore corporate structure is that the ownership is based on who physically has the share certificates for the corporation. The share certificates do not have to be made out in the name of any natural person. The Sociedad Anonima or Panama Corporation share certificates can be blank or made out to a judicial person such as a Panama Foundation or another corporation in Panama or a Corporation in another offshore jurisdiction. In most of the offshore jurisdictions the share certificates must be made out to a natural person and they must be kept in that offshore jurisdiction in the hands and control of the corporate agent who did the formation there. Generally these corporate agents are not lawyers. This is a serious flaw in the privacy of these corporations since there is no attorney client privilege and the records could be subpoenaed by a lawyer in that jurisdiction in a civil matter entirely. The lawyer would file an action citing reasons why he felt the court should order the records released to him and the corporate agent would need to retain a lawyer for $5000 or more to protect your privacy or just agree to turn over the records not spending any money. Do you think you are worth $5000 to some corporate agent sitting in some island jurisdiction? How many years of profit from fees would it take him to recover the legal fees from you? All Panama Corporations must be filed by an attorney so there is always attorney client privilege. It does not cost a Panama Lawyer money to defend the privacy of their client in court and if another attorney tried a frivolous civil case to get your records there is a good chance the attorney representing the client could recover costs and legal fees. Panama Corporations are real bearer share corporations in that they are fully anonymous. The ownership of the corporation does not appear in any database or public registry, share certificates can be blank and kept anywhere in the world. Changes in ownership do not have to be reported to anyone. The attorney who formed your Panama Corporation, hopefully that would be us, would not be able to reveal anything pertaining to who we formed the corporation for without a court order from a Panama Court. This is a very rare occurrence.

Panama Corporation Nominee Directors – Panama Corporations maintain their anonymity through the use of nominee directors. The nominee directors go in the public registry as the President, Secretary and Treasurer. The nominees do not know you or your affairs. Other Panama Corporations can serve in place of persons as nominee directors but there is eventually going to be three live person nominees at the end of the trail of corporations somewhere. You get signed but undated resignation letters from your nominees so you can replace them whenever you wish. The nominee directors can not add, delete or change the signatories on the Panama Corporation bank account. The bank not wishing to be sued for fraud would contact the existing signatories on the Panama Corporate bank account for permission to modify the existing signatories. If you were so contacted as the existing signatory and you told the bank the nominees were not acting with your knowledge and consent the bank would call the police and they would be arrested for attempted bank fraud.

Panama Corporation Activities – The Panama Corporation or Sociedad Anonima can engage in any sort of commercial activities anywhere in the world. It can own other corporations and the shares of the Panama Corporation can be owned by other corporations, trusts, or foundations from any country under Panama law. The Panama Corporation can have multiple bank accounts in any country, it can also have stock brokerage accounts, it can own real estate (anonymously) in any country under Panama law. A Panama Corporation can also own Planes, Boats, Vehicles, Art, Gold, Jewelry etc. The Panama Corporation can not operate as a licensed business for which it has no license. The Panama Corporation can not engage in illegal activities.

Panama Corporation Names – The Panama Corporation can have a name ending with S.A. for Sociedad Anonima, it can also have a name ending with. Inc., Incorporated, Corp or Corporation. The Panama Corporation can not use words like Insurance, Bank, Building Society, Credit Union, or Savings and Loan.

Panama Corporations and Panama Taxes – Panama does not tax offshore derived income. This means that if your money is derived from offshore there is no need to pay taxes in Panama and there is not even a need to file an income tax return. Your Panama Corporation can have an office in Panama, a bank account in Panama, a phone in Panama and if all the income is derived from outside of Panama there is no tax due and no need to file any income tax forms.

Panama Corporations and Tax Treaties – Panama has no tax treaties with any country so that is an easy subject to cover. Tax treaties are very common in the offshore jurisdictions even the so called tax havens. Tax treaties lead to fishing expeditions and information sharing. Generally a tax treaty could be applied to a bank account and also for corporate records either from the bank or sometimes directly. This is not the case with Panama.

Panama Corporations and MLAT – MLAT stands for Mutual legal Assistance Treaty. Panama has one such treaty and that is with the USA. It calls for assistance in criminal matters. The MLAT requires that there first needs to be a criminal case on file in the USA National Courts. Then through diplomatic channels the USA approaches Panama for assistance in the form of information. They must show Panama that there is a case in there criminal courts already (not a fishing expedition), that they need this information to prosecute the case successfully and that there is no other way for them to get this information which could be records for a Panama Corporation or the bank records. Then Panama takes the matter under advisement and has the right to ask questions, require more information, etc. It is a long process. Panama might even decide that there was some violation of law in their country and grab the records for their own investigation first which might take some years to complete and the statue of limitation in the USA might expire before the Panamanians are finished with their investigation. Panama is not a puppet state. There is also a principle called dual criminality. The MLAT can only be invoked if the criminal offense in question violates laws in both the USA and Panama. In Panama all the tax offenses possible are simply civil offenses including failure to file returns, income tax fraud etc. This means that the MLAT with the USA can not be used on a purely tax matter since such a crime would be no crime in Panama and thus the principle of dual criminality would not apply. The MLAT is generally used for real serious criminals engaged in activities like: narcotics, money laundering, terrorism, blackmail, kidnapping, and fiduciary fraud such as robbing people through promoting a false bank or stock promotion fraud, selling non-existent gold mines, and this sort of thing when done on a large widespread scale, generally many millions of dollars are involved. These are very rare cases and are reserved for real serious criminals. Panama is not a haven for criminal activity.

Panama Corporations and Panama Banks – The banks in Panama have the best bank secrecy in the world. They are used to having Panama Corporations as clients. The Panama banks have English speakers, online banking and offer secured Visa and Mastercards. There are banks in Panama with billions of dollars in assets, most secure.

450,000 Panama Corporations – There are about 450,000 Panama Corporations on file. There is a reason for this and that reason is Panama is the best offshore jurisdiction.

Panama Corporation Filing- It takes us 2-3 days to file a Panama Corporation and get it out of the public registry. To file a Panama Corporation and assist in the bank account opening process for the Panama Corporation with a Panama Bank requires 10-15 working days.

Panama Corporation Requirements – To form a Panama Corporation or Sociedad Anonima we need the following: A notarized copy of a valid Passport and drivers license. If a notary is not available certification by a lawyer that the copies are true copies of the original are sufficient. We also need a bank reference letter from any bank anywhere that is able to send and receive international wires. The letter should state that you have an account there for so long and that the account is current or in good standing at present. We also need a general business reference letter from an accountant, lawyer, or anyone you do business with. Just those four things are needed. You do not have to come to Panama to open a Panama Corporation and have a Panama Bank Account for it as well. You are welcome to come to Panam and in that case the notary would not be required.

Panama Corporation Cost – We charge $1495.00 for a Panama Corporation. This is for the anonymous bearer share Panama Corporation also called the Anonima. This is a complete fee there are no hidden costs. It includes a translation of the corporation documents, power of attorney, three nominee directors with three signed but undated resignation letters, general power of attorney, share certificates, resident agent and address for official notices and the fee of $300 for the first year paid to the Panama Government. This is a complete fee. Others offer a low fee but when you add it all up they are more expensive. If you would like a Panama Bank Account we charge $1795.00 for the Panama Corporation and a Panama Bank Account. Others say they include a bank account but the bank account is not in Panama, instead in some small island in the middle of an ocean somewhere.