Benefits of doing business in Panama:
- Transparency and availability of information about the business, which is a requirement in many countries at present;
- Panamanian companies can be used to conduct business in Panama and abroad as well;
- The principle of territoriality in taxation is strictly observed, that is, the company's revenues from sources outside of Panama are not taxed in the country;
- The official currency is Balboa, but the US dollar has free circulation in Panama.
Benefits of registering companies in Panama:
- Companies are allowed to operate in Panama and in any other jurisdiction;
- There is no set minimum/maximum size of the share capital, as well as no requirements for the currency in which it should be paid;
- There are no restrictions on the maximum number of partners/shareholders;
- Meetings of shareholders may be held outside the territory of Panama, as well as by electronic communication;
- It is allowed to redomicile companies from another or into another jurisdiction where it is allowed;
- The most popular are two types of companies - LLC (limited liability company) and International Business Companies (IBC), the so-called corporations.
Requirements for the registration of international business companies - corporations (IBC):
- The name must contain abbreviations SA, Inc. or Corp.;
- Minimum availability of 2 applicants (subscribers) for registration;
- There are no requirements for mandatory payment of capital or any specific amount of money to start the company, but the size of the share capital is indicated in the articles of association;
- There is no set minimum number of shareholders for companies in the form of corporations, but it is mandatory to have at least 3 directors - individuals without residence requirements, which do not have to be shareholders;
- There are at least three officials for an IBC: the president, the treasurer and the secretary;
- The articles of association of a corporation must be drawn up by a notary, and then registered in the State Register of Panama.
Requirements for the registration of limited liability companies (LLC) in Panama:
- Available company name, which must contain Sociedad de Responsabilidad Limitada or abbreviation S. de RL;
- Minimum availability of 2 applicants (subscribers) who are not necessarily partners of the company;
- The minimum number of partners - 2, which are already owners of the company, information about partners is available in the public register of companies;
- Subscribers and / or partners may be individuals and legal entities, no residence requirements;
- The need to appoint at least one manager of such a company, who does not have to be a partner, data is also available in the Register;
- There are obligatory requirements to indicate the objectives of the formation of companies, the main directions of its activities, as well as a limited or unlimited lifetime.
Tax system in Panama:
If a company does not generate profits in Panama or from its sources, it is not subject to taxation in Panama. In the opposite case, income tax is paid at a rate of 25% of net profit (or an alternative rate of 1.168% is used if the company's taxable annual income is above US $ 1.5 million).
A limited liability company can choose the optimal taxation method for itself: as a partnership or as a corporation (pass-through tax treatment - the ability to pay tax at the company level or personally with each partner).
