• Income generated by a company that do not business in Panama or from Panama,  is exempt from taxes only if this occurs outside of the Republic of Panama’s territory. This is based on the territorial source principle. Therefore, corporations can manage operations from an office located in Panama. Still, income from those activities is not taxable under our law as long as it stays outside the national territory.
• Privacy of shareholders’ identity is not registered in any public office, only in the corporation’s Stocks’ Register Book.
• In Panama, two types of corporation shares can be issued: bearer or nominative shares.
• No paid-in capital is required, and neither it’s registered in any bank. Assets don’t need to be located in Panama.
• The directors and shareholders may be of any nationality and resident of any country. It’s only required to have a minimum of three (3) directors for the corporation to operate.
• Articles of Incorporation, the document to constitute a corporation, may be created in English and any other language.
• The Law allows holding meetings of directors and shareholders in any country, in person, over the phone, or electronically.
• To maintain confidentiality, if the corporation has nominee directors, activities may be handled through a general power of attorney that must be registered at the Panama Public Registry.
• The corporation does not need any commercial license to operate outside or within the national territory.
• A Panama Company may own any goods or assets.
• Companies constituted under other jurisdictions may change their domicile to Panama to take advantage offered here. Any Panamanian offshore corporation may also perform re-domiciliation to another jurisdiction.

Panama Companies: Advantages for International Entrepreneurs

Panama is widely recognized as one of the most business-friendly jurisdictions in the world. Due to its strategic location, robust legal framework, and attractive benefits for international entrepreneurs, forming a Panama company has become a popular choice for businesses seeking privacy, flexibility, and tax efficiency.

At Delvalle & Delvalle, we specialize in guiding businesses and individuals through establishing Panama International Business Companies (IBCs). Our expertise ensures that you can fully take advantage of the opportunities available in this thriving financial hub.

Understanding the Panama Company

A Panama International Business Company (IBC) is a corporate entity designed to facilitate international business activities while offering significant taxation, privacy, and operational flexibility advantages.

Key Features of Panama Companies:

• Tax-Free Operations: Income generated outside of Panama is exempt from local taxes under the territorial source principle.
• Privacy Protection: Shareholders’ identities are not recorded in any public registry.
• Flexible Ownership: Directors and shareholders can be of any nationality and reside anywhere in the world.
• Ease of Formation: The Articles of Incorporation can be drafted in multiple languages, streamlining the process for international stakeholders.

Panama IBCs are versatile and can be tailored to suit various business needs, making them an ideal choice for entrepreneurs, investors, and multinational corporations.

Tax Benefits of Panama Companies

One of the most compelling reasons for forming a Panamanian company is the country’s favorable tax regime based on the territorial source principle.

• Territorial Tax Principle: Income earned outside Panama’s territorial boundaries is entirely exempt from local taxes. This makes Panama companies highly attractive to international entrepreneurs who manage operations globally.
• Tax-Free Operations from Panama: Any income generated from activities outside the country remains untaxed even if the company is physically located in Panama. This unique benefit provides significant cost savings for businesses with an international reach.

Businesses can maximize profitability by leveraging these tax advantages while ensuring compliance with Panama’s straightforward legal framework.

Privacy and Confidentiality

Panama is renowned for its strong emphasis on privacy and confidentiality, making it a prime choice for businesses and individuals seeking to protect sensitive information.

• Shareholders’ Privacy: The identities of shareholders are not registered in any public office. Instead, this information is kept privately in the corporation’s Stock Register Book, ensuring confidentiality.
• Bearer and Nominative Shares: Panama companies can issue two types of shares—bearer and nominative. Bearer shares, in particular, provide an additional layer of privacy, as ownership is tied to the physical possession of the shares.
• Nominee Directors: To enhance confidentiality, companies can appoint nominee directors, allowing business activities to be conducted via a registered general power of attorney.

These robust privacy measures make Panama companies a secure option for entrepreneurs looking to protect their identities and business dealings.

Flexibility in Operations

Panama companies are designed with operational flexibility in mind, making them highly adaptable to the needs of global entrepreneurs and businesses.

• No Paid-In Capital Requirement: Unlike many other jurisdictions, Panama companies do not require paid-in capital to be deposited in a bank or declared at the time of incorporation.
• Global Directors and Shareholders: Directors and shareholders can be of any nationality and reside in any country, offering businesses the freedom to choose management without geographical restrictions.
• Convenient Meeting Options: Directors’ and shareholders’ meetings can be held anywhere worldwide. They may occur in person, over the phone, or electronically, ensuring seamless decision-making regardless of location.

This level of flexibility enables Panama companies to operate efficiently while catering to the diverse needs of international businesses.

Ownership and Asset Management

Panama companies offer remarkable advantages in owning and managing assets, making them ideal for individuals and businesses with global interests.

• Worldwide Asset Ownership: A Panama company can own real estate, intellectual property, shares in other companies, bank accounts, and other assets anywhere in the world. These assets do not need to be located within Panama.
• Re-domiciliation Flexibility: Companies formed in other jurisdictions can easily re-domicile in Panama for favorable legal and tax benefits. Similarly, Panamanian companies can relocate to different jurisdictions if business needs change.

This flexibility and global asset management capability make Panama companies an excellent tool for wealth protection and international business expansion.

Legal and Administrative Advantages

Panama companies offer a range of legal and administrative benefits that simplify operations and reduce regulatory burdens for business owners.

• Simplified Articles of Incorporation: The foundational document required to establish a Panama company can be drafted in multiple languages, making the process accessible for international entrepreneurs.
• No Commercial License Requirement: Companies operating outside Panama or engaging in non-commercial activities within the country do not require a commercial license. This reduces both administrative hurdles and operational costs.
• Nominee Directors for Confidentiality: Nominee directors can be appointed to protect stakeholders’ privacy. Business activities can then be conducted through a registered general power of attorney, ensuring seamless operations while maintaining confidentiality.

These legal and administrative features make Panama companies a practical and efficient solution for businesses seeking simplicity and privacy.

Forming a Panama company offers many benefits, from tax efficiency and privacy to unparalleled operational flexibility and global asset management capabilities. Panama’s business-friendly legal framework and robust confidentiality measures make it a premier jurisdiction for international entrepreneurs and investors.

At Delvalle & Delvalle, we are committed to helping you unlock the full potential of Panama’s corporate advantages. Our expertise ensures a seamless incorporation process and tailored solutions that align with your business goals. Whether you want to expand globally, protect your assets, or optimize tax obligations, a Panama company could be the ideal vehicle to achieve your objectives.