Registration of Foreign Company Branch (Subsidiaries) in Panama vs. Registration of Corporations in Panama vs. Re-domiciliation of Foreign Company to Panama

Navigating the intricacies of international business expansion requires a thorough understanding of local legal frameworks, especially when establishing a presence in a new country. This guide offers an in-depth examination of the procedures involved in the registration of foreign company branches, the establishment of corporations, and the re-domiciliation of foreign companies to Panama. This document serves as a crucial guide for multinational corporations seeking to leverage Panama’s strategic location and favorable business environment. Whether extending a company’s reach through a foreign branch or setting up a new independent corporation, or even relocating an entire business domicile to Panama, this guide details the necessary legal pathways and requirements. Herein, readers will find the essential information needed to facilitate successful business operations and legal compliance within the Panamanian jurisdiction.

Registration of a Foreign Company Branch

A foreign company branch is an extension of a company; that is, it is considered part of it and therefore not an individual or separate entity from the headquarters:

• It does not have its own capital but has Assigned Capital, which is capital designated for specific operations.
• It does not have its own legal personality.
• Every act performed by the branch is also binding on the headquarters.
• The branch is established under the laws of the country of residence and receives authorization for its operation.
• Note that it is not incorporated, it is not granted legal personality, and it is only recognized under the operating laws of the country of its constitution and is capable of conducting business in the country.
• The accounting of the branch is tied to that of the headquarters.

The requirements to register a branch in Panama would be the following:

• Copy of the social pact or constitutive document of the headquarters along with all its amendments. These documents must be provided authenticated by Apostille or the Panamanian consulate in the country that issued these documents.
• Certificate of Incorporation of the headquarters. This document must also be authenticated by Apostille or the Panamanian consulate in the issuing country.
• Copy of the latest financial balance accompanied by a statement of the part of the share capital that will be assigned to the branch in Panama.

Registration of a Corporation in Panama

We refer to the establishment of a new legal entity, under the laws and jurisdiction of Panama, legally and financially independent of any foreign entity, regardless of whether it acts as a holding of other foreign companies or conversely its shareholders are foreign companies.

For requirements and procedures, visit; Re-domiciliation of Foreign Company to Panama.

For this type of process, the foreign company which is to be re-domiciled in Panama must be able to exercise such faculty according to the laws of the country of constitution.

The requirements to carry out the process are similar to those for the registration of a foreign branch, but in this case, when re-domiciliation occurs, the company in question renounces adherence to the laws of the country of constitution, to adhere to the laws of corporations in Panama, i.e., the same company moves its domicile from one jurisdiction to another.

A company cannot be governed by two jurisdictions, so it is understood that by undergoing the process of re-domiciliation, the company renounces the laws and precepts of the country of constitution to adopt the new laws of the country, which in this case would be Panama.

The requirements to re-domicile a foreign company in Panama would be:

• Certificate of incorporation of the Company, duly authenticated by Apostille and translated into Spanish (if necessary)
• Certificate of existence of the company, issued by the country of constitution, duly authenticated by Apostille and translated into Spanish (if necessary)
• Minutes of the board of directors of the Company, whereby it approves moving the legal headquarters from its current location to Panama (Panama City, Republic of Panama), duly authenticated by Apostille and translated into Spanish (if necessary).
• Minutes of the shareholders’ meeting, whereby it approves moving the legal headquarters from where it is currently located to Panama (Panama City, Republic of Panama), and adopts the social pact of the company.”

As you consider the important steps towards expanding or relocating your business in Panama, expert legal advice is indispensable. Delvalle & Delvalle Law Firm is here to assist you every step of the way. From understanding detailed registration processes to handling complex legal documentation, our team ensures a smooth and compliant transition into Panama’s dynamic market. Don’t hesitate to reach out for tailored solutions that align with your business goals. Visit our contact page now to schedule a consultation and take the first step towards securing your business’s future in Panama.