Set up a company in Panama can bring foreign entrepreneurs significant advantages in doing business, both domestically and internationally. The country has the best indicators in the region in terms of economic growth and foreign direct investment.
Panama is one of the most favorable countries for creating or expanding international business and entering new markets. The state not only shows interest in foreign investment but also creates comfortable conditions for business activities, while Panama offshore services ensuring reliable security and asset protection.
When set up company in Panama, it is necessary to choose a structure that will most closely correspond to a specific type of activity and meet the needs of the business.Atrium Business Solutions
Why set up offshore company in Panama
Panama provides an opportunity for foreigners, regardless of their nationality, to register structures for business and asset protection, which are regulated by the best laws in the world on protecting the rights of foreign investors and private property. One of the best tools to enter the Latin American market will be to register offshore company in Panama that can be done in less than a week, without taking into account the time for preparing documents.
If you want to carry on activities in the domestic market of Panama, you will need to obtain the appropriate permits and licenses, which will also take a few more weeks. For example, when conducting trade in goods and services, you can use the transport infrastructure of Panama with its modern freeways, a wide network of seaports, as well as rail and air transportation.
To do international business, which does not imply the receipt of income directly in Panama, you will not need any permits. You simply pay the annual deductible of $300 and update it annually. The structure of offshore company Panama can provide high confidentiality to shareholders from any country in the world, unlike other Latin American jurisdictions, where full information about shareholders and their profits is to be made public.
Ways to register company in Panama
Companies in Panama are commonly used for various purposes. During the process of Panama company registration, you can list the maximum types of activities that the company can engage in, even though in reality the company can only deal with some of them.
The main goals of such company can be:
- Assets acquiring, owning and protection.
- Tax planning and investing.
- Commercial or industrial activity.
- A planning structure for operations within large financial holdings.
The founder must enter into a contract with Panama offshore legal law firm or with a private (licensed) lawyer. The lawyer will be the company’s official legal entity authorized to represent the company in the Panamanian government. When registering a Panamanian corporation, the founder must provide at least 3 (three) names. This is due to the fact that the name selected for registration may not always meet the requirements of uniqueness. Therefore, the name of the corporation must be checked for matches with previously registered names in the public registry of Panama.
Company types you can register
When set up company in Panama, it is necessary to choose a structure that will most closely correspond to a specific type of activity and meet the needs of the business. As a result, the selected structure must be properly organized. Below are shown the legal structures that are most often used by foreign businesses and investors in Panama.
The corporation in Panama is called Sociedad Anónima, which stands for Anonymous Joint Stock Company. The Panamanian company has the status of a legal entity and is the most popular structure registered in the country by Panamanians, foreign entrepreneurs and investors.
The Panama Limited Liability Company in Spanish sounds like Sociedad de Responsabilidad Limitada (SRL). This enterprise can conduct business similarly to a corporation, but structurally is a combination of a Panamanian corporation and partnership. Such a company can engage in activities both domestically and internationally.
The Private Fund (Fundacion de Interes Privado) is one of the most attractive enterprises in Panama. This structure will be interesting for foreign investors or companies that want to have high confidentiality and wish to more reliably protect their international assets, especially in combination with a foreign company.
The Private Foundation has the status of a legal entity, while it does not have an owner, but only beneficiaries. Panama law does not allow the Fund to engage in commercial activities in its classical sense.
Requirements for companies
Panama company setup can be done by one or more shareholders, which can be individuals or legal entities. An important point of the company is that shareholders have limited legal liability. This means that they are responsible for the debts of the company and its management decisions according to the invested amount of capital. In the case of registration of a corporation with a sole shareholder when opening a bank account, the bank may require to submit several additional documents to ascertain the identity of the ultimate beneficial owner.
For Panama offshore company registration it is required to have a registered agent who must be represented by a Panamanian law firm or private lawyer with a state license. The company must have a taxpayer number in Panama. According to the latest requirements, an offshore corporation is assigned the B tax category.
If a corporation operates in the domestic market of Panama, it must file monthly financial statements and annual declarations. Offshore companies that receive income abroad are not required to file financial statements, income statements and conduct audits. An offshore company is required to keep records and keep copies of financial statements for five years in the office of a registered agent.
Benefits to open company in Panama
Panama, despite its small territorial dimensions, offers foreign business the best offshore business structures. Companies and Foundations registered in Panama reliably protect assets and enjoy tax advantages when performing international activities:
- Panama has one of the lowest (7%) VAT rates in the world.
- The territorial taxation system excludes the payment of tax on foreign income.
- The highly liquid real estate sector of Panama offers competitive prices, a high level of luxury and quality in comparison with other countries.
- Government investment programs of residency are simple and affordable migration rules aimed at attracting foreign investors and capital.
Given the above advantages of the jurisdiction and offshore banking in Panama, opening a business in this country is very profitable.
Quick and easy offshore company formation in Panama
Panama has many sectors of the economy attractive for the business that have huge potential and can provide high profits. Realizing the benefits of Panamanian jurisdiction, the main flows of foreign direct investment come to the country from investors from the United States, Britain, Switzerland, and South Africa. Therefore, if you want to diversify your assets, intend to expand your business in new Latin American markets, offshore Panama company will be the best way to implement such plans.