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Panama |
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Panama Key Corporate Features
The population of Panama is approximately 2,4 million, about 52% of which are in urban areas. Panama was a Spanish colony until 1821. In 1903, Panama broke an alliance with Colombia and became an independent republic. The executive branch of the Government is at present composed of a President and two vice-presidents, elected for a five-year term by direct election. The Colon Free Zone is located on the Caribbean side of the Isthmus of Panama near the Atlantic entrance to the Panama Canal. This Free Trade Zone is the second largest in the world after Hong Kong. Operations and transactions taking place in the Free Trade Zone are subject to a special tax treatment whereby imports from other parts of the world and re-exports to other countries are exempted from any import or export taxes imposed by Panama. Income earned from re-exports is taxed at specially reduced rates. Spanish is the official and spoken language. English is also spoken widely in urban areas and is used daily in commerce and international trade. The official currency is the US$. There are no exchange controls. The type of law is Common Law based on English system. Although the country is under political influence of the USA the offshore industry has kept its liberal position and discretion.The principal corporate legalisation is the Corporation Law No. 32 of the 1927 Commercial Code, Decree Law 5 of 1997 and Executive Decree 296 of 1997. Company Information Generally, corporations are incorporated under the Corporation Statute Law 32 of the 1927 Commercial Code. Limited Liability Companies and Limited Partnerships are used also. The procedure to incorporate is the following: by presentation of the proposed corporation's signed Articles of Incorporation before a Notary Public who creates a public deed for registration at the Public Registry. The following restrictions on trading apply: you can’t undertake the business of banking, trusteeship and trust administration, insurance, assurance, reinsurance, fund management, investment funds, collective investment schemes or any other activity that would suggest an association with the banking, finance, fiduciary or insurance businesses. The language of legislation and corporate documents is Spanish and certified English translations. A registered office is required and must be maintained in Panama at the address of the registered agent. A name approval is required.Shelf companies are available. The time to incorporate is about one day, subject to name approval. The following name restrictions apply: a name that is similar to or identical to an existing company is forbidden as are names of well known companies incorporated elsewhere or a name that implies government patronage. Names may be expressed in any language using the Latin alphabet. The Registrar may request a Spanish or English translation. The following names require consent or a licence: bank, building society, savings, insurance, assurance, reinsurance, fund management, investment fund, trust or their foreign language equivalents. All Panamanian corporations must end with the suffix Corporation, Incorporated, Sociedad Anónima or the abbreviations Corp., Inc. or SA. They may not utilise the suffix Limited or Ltd. There is no disclosure of beneficial ownership to authorities. The standard authorised share capital is US$ 10.000 divided in to 100 common voting shares of US$ 100 each or 500 common voting shares of no par value; the capital may be expressed in any convertible currency. The minimum issued capital is either one share of no par value or one share of par value. The following classes of shares are permitted: non-voting shares, preferred shares, bearer shares and registered shares. No corporation tax is levied on non-Panamanian sourced income. There is no double taxation agreement. Instead of licence fees an annual franchise tax of US$ 250 is payable. Financial statements are not required if income is of non-Panamanian sources. Both corporations and natural persons may act as directors and the minimum number of directors is three. They may be of any nationality and need not be residents of Panama. Panamanian companies are also required to appoint a minimum of three officers (president, secretary and treasurer) who may also be the directors. A company secretary must be appointed, who may be a natural or corporate person. The company secretary may be of any nationality and need not be a resident of Panama. The minimum number of shareholders is one. Contact: info@personaloffice-bv.com
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