Panama Company Incorporation: Quick Start Guide
Tuesday, April 29th, 2008In Panama most entities are governed by public notaries that are under the direction of the government. The law in Panama allows any two people who are acting as organizers and their subscribers to go before a pubic notary to organize and legalize a corporation.
If you want to incorporate a Panama company but you live outside of Panama you will need to utilize the services of a local Panama law firm, trust company or other professional services firm that has access to lawyer services. These companies will draft all of the required documents as well as collect your personal information and due diligence as required by law. In order to meet these requirements a law firm will ask you for; a name and two alternative names for your Panama corporation.
The name can be in any language, it must include a corporate ending, like Ltd. or Inc.. Next the purpose of the company has to be outlined. The purpose can be broad or specific. It can also list more than one purpose if needed. There is no minimum capital that must be paid in upon registration.
If you incorporate your Panama corporation with less than $10,000 you will need to pay a $300 per year registration fee which is due annually. You will need to use a minimum of 3 directors which can be anyone from just about anywhere. The caveat example is if you are interested in registering the corporation anonymously in bearer share format you will need to use the services of nominee directors. These can be supplied by most Panama law firms but make sure when you order your corporate package that it includes undated resignation letters from these nominees or you run the risk of someone seizing control of your company that you don’t even know.
In order to round out the requirements for registering a Panama offshore company you will need to supply at least a president, treasurer, secretary and registered agent. You can use anyone as the president, treasurer or secretary but the registered agent must be a practicing Panama lawyer or law firm. The law firm can supply you with the president, treasurer and secretary if you want your company to remain anonymous.
You can incorporate your Panama company for a short time or indefinitely with the latter being the more common option. Typically, a Panama law firm will take about a week to form your offshore company once they have received all of the correct notarized documents from the client.
If you do not want to go through the incorporation process for whatever reason you could seek out “off the shelf” corporations. These are corporations that have been previously registered and are available for purchase at a law firm because the original owner no longer wants to keep the corporation. Be careful, you never know what reasons the person who previously owned the corporation had for giving it up. It may be benign or it might not and it would be very difficult for you to tell either way.
Only use the services of a Panama law firm that will provide you with a complete list of costs before they start working for you. The incorporation process is fairly simple and should not cost an arm and leg to have completed on your behalf. The annual cost to the government to have your business in good standing is $300. If you use nominee directors you will need to pay them $100 - $150 each per year also. The total cost minus legal fees to get a company registered in Panama is approximately $750.
Be wary of packages that look “too good to be true”. There are a number of little gotcha’s where a law firm will try to make their package cost less than a competitor’s but what they don’t tell you is if you try to get a bank account with the corporation they register you will be turned down.