Information Guides

What Are the Business Benefits of Forming a Panama Corporation ?

Entrepreneurs looking to save money and operate their companies without unnecessary government oversight will get significant benefits by forming Panama corporations. Panama has a history of supporting international businesses. Since the Corporations Law of Panama protects these privileges, organizations, and individuals can start their own corporations without worry.

Financial Benefits of Forming a Panama Corporation

Offshore corporations forming within Panama’s jurisdiction do not have to pay any taxes, regardless of how much money they make. Instead, these companies pay a flat annual fee of $300.00 plus a resident agent fee of US$200.00 and nominee director fees 300.000 (just in case this applies). This attracts many businesses to Panama. As long as they only do business outside of the jurisdiction, they never have to pay any taxes. That’s an excellent incentive that helps companies invest in them instead of the government.

Panama corporations also have the benefit of avoiding registered capital. That lets businesses of all sizes start work immediately.

A Panama corporation can use any type of currency it pleases. Residents of Panama use the US, but your company isn’t restricted to those options.

Procedural Benefits of Forming a Panama Corporation

Panama has procedural requirements for its offshore corporations, but they are quite loose compared to those of most countries.

A Panama corporation can keep its accounting books, minutes, and articles of incorporation anywhere in the world. There’s no need to worry about keeping them in Panama or a country that might want to interfere with your business practices.

In fact, you can keep your records online. You don’t even need physical copies. Putting records on a password-protected site with up-to-date encryption security gives you and your business partners an easy way to maintain and share documents without anyone invading your privacy.

While Panama requires annual meetings, it does not require offshore companies to file annual reports. That gives you the freedom to conduct business as you see fit instead of worrying about Panamanian regulations. You will still need to consider the regulations of countries where you do business, but Panama leaves you free to perform international business without restrictions.

Shareholder Benefits of Forming a Panama Corporation

Panama’s legal system takes privacy seriously. This attitude has affected laws regulating businesses. As a Panama corporation, you can issue shares in your company that do not include anyone’s name (bearer shares), as long as the original certificate remains in the custody of the resident agent (this is according to the new law). The owner’s name doesn’t need to appear on the share certificate. Neither do the names of directors and officers.

This allows shareholders to remain anonymous. That’s a huge advantage to investors who don’t want anyone to know that they hold a stake in your company, either because they want to protect their assets or they worry that someone will claim that their investment creates a conflict of interests.

Recommended reading:

General Information about a Panama Corporation

Documents of a Panama Corporation

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