Guide to Offshore Company Formation in Panama

If you are looking for a flexible corporate plan, unparalleled investor confidentiality and the ability to conduct legal business in the International community, forming an offshore company in Panama may be the right opportunity for you.

You should have at least two people that are authorized to act as organizers for the purpose if incorporation. You should also have at least three directors whose names and addresses will be maintained as part of the public record as directors of your Panama corporation.

If you are concerned with privacy and prefer not to have your name appear in the registered documentation for the company it is advisable to utilize the services of a Panama lawyer who will provide nominee directors with signed resignation letters on your behalf when forming the offshore company.

Panama corporations also require that each organization should have officers for the positions President, Treasurer and Secretary. A person can serve as both President and Treasurer, but the President and Secretary can not be the same person. A Panama lawyer will also provide these officers for your offshore company when forming it effectively eliminating your name from the public registry in Panama thus making it harder to establish a direct link between you and the offshore entity.

One of the main advantages of forming an offshore company in Panama is that you are not required to have paid-in capital. There is a standard capitalization for people who have a Panama corporation. The requirements are $10,000 for each offshore corporation formed.

Your transactions will all be conducted using the United States dollar as the standard measure of currency since Panama utilizes the US dollar. Panama will not restrict you on the free movement of your money and international bank wires can flow in and out of any offshore bank accounts set up for your company fairly easily.

Panama does not require non-residents to report foreign derived income on personal accounts or corporate accounts. This does not excuse you from your tax reporting obligations to the U.S. authorities, however. There is an annual franchise fee of $300 for each Panama corporation that will keep your corporation in good standing.

Your records for your offshore company will be filed with the Mercantile registry in Panama, but you are not required to keep any records of your accounts or any books, although it is a good idea to do so if you are a United States citizen.

You are also not required to issue financial statements, but if you do decide to prepare such a statement, you do not have to have it prepared in Panama.

In spite of the lax paperwork requirements, Panama does require that each offshore company domiciled there maintains a list of shareholders that lists the country of residence of each shareholder and the date of purchase of each share. You are also required to keep a Book of Minutes for each offshore company that you own in Panama.

Shares can be made out anonymously in bearer share format essentially meaning that the person who possesses the physical share certificates owns the offshore company. Ownership can then easily be passed to another individual with no public record of the sale necessary.

It can take from four all the way up to six days to form a non-resident Panama offshore corporation. In some cases, 24 hour service is available for a surcharge but not all Panama firms offer this capability.

Two people that act as organizers should appear in front of a Notary Public to form the corporation. If you have contracted the services of a Panamanian lawyer, he or she will provide these services for you.



Action Steps
The best contacts and resources to help you get it done

Tips & Tactics
Helpful advice for making the most of this Guide

• If you require a bank account for your offshore company you will need to provide notarized and apostilled personal documents. These documents include; passport, 2nd picture ID, banking reference letter and a business reference. ATM cards and transactions will list the company name, not your name.