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Panama Offshore Company Formation

The Republic of Panama has registered offshore corporations from 1927. Other offshore entities which can be formed in the offshore tax haven are offshore foundations and Panama offshore trusts. The offshore tax haven of the Republic of Panama also offers offshore banking and the registration of ships and vessels. The offshore tax haven of Panama for many years has been a choice offshore jurisdiction for clients from the United States, Europe and Canada.

A Panama offshore company is a very important tool to use for asset protection. The Panama offshore company can be used for business anywhere in the world. Panama offshore company formation can be completed in one working day. Once incorporated a Panama offshore corporation is a legal entity. Offshore company formation in panama is a straightforward process. To incorporate an offshore company a registered agent must be employed. This is according to company formation laws of the tax haven. The registered agent must prepare on behalf of the offshore clients a Memorandum of Association and an Articles of Association which will be presented to the Registrar of Companies who will issue the offshore corporation with a Certificate of Incorporation. The details to be included in the formation documents are:

  • The name of the corporation
  • The registered address of the corporation
  • The name and address of the registered agent
  • The names, nationality and addresses of the directors which must be three or more
  • The objectives for which the company is formed
  • The authorized share capital for the offshore corporation
  • The number and classes of shares to be issued
  • The rights, powers and restriction attached to each class of share
  • The names and addresses of the subscribers for the corporation
  • The by- laws of the company

Offshore formation of a Panama company can be carried out using one (1) shareholder. Directors for offshore company formation in Panama must be no less than three (3). The documents for offshore company registration in Panama can be written in any language but must be accompanied with an accurate certified copy in Spanish. Persons of any nationality above eighteen (1) can incorporate an offshore company in the tax haven of Panama. The name of an offshore corporation in Panama must not be one that has already been used for incorporation.

Such companies with names which have already been used will not be incorporated. The name of an offshore corporation in Panama must not imply an affiliation with any government authority or department. Offshore companies formed in the offshore jurisdiction must have one of the following words or the appropriate abbreviation added to its name; Incorporated, Corporation or Sociedad Anonima.

An offshore company formed in Panama will pay no taxes on income made abroad. The Panama offshore company is obligated to pay a yearly license fees to the government authorities. Panama offshore corporation

The Panama offshore Foundation is another asset protection tool which is very popular among offshore clients in the tax haven. Panama began incorporating offshore foundations when the legislation for its registration was passed over a decade ago in 1995. The Panama foundation legislation was modeled after that of Liechtenstein. The Panama offshore foundation can be used for several purposes other then asset protection. A Panama Foundation can be used to control a panama corporation or other type of corporation. Offshore foundations are very instrumental in estate planning in ensuring that assets will be available for future generations.

The assets placed in a Panama offshore foundation are not legally attached to any individual but are under the care and protection of the foundation. In essence the foundation will now own the assets. Panama offshore foundations are not allowed to engage in business activities in a habit forming manner but from time to time can carry out commercial business al long this benefit the beneficiaries of the foundation.

Offshore incorporation of a Panama Foundations must be completed by a registered agent in the offshore jurisdiction. The service of registered agent is offered by many experienced law firms and offshore service providers. An offshore foundation can be formed by a corporation or individuals. A Panama offshore foundation is governed by a Foundation Charter. This document serves as the formation documents for the foundation. This document can be registered with the Registrar of Companies in the jurisdiction. Included in the foundation charter must be:

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- The name of the foundation - The name and address of the registered agent - The registered address of the foundation - The purpose for forming the foundation - The names and addresses of the foundation council - The number of years the foundation will exist for - The startup capital of the foundation- US$10,000 or its equivalent in another currency - Appoint beneficiaries - How the assets are to be distributed - The by- laws of the foundation

Panama is a tax haven and for this offshore foundations formed in the jurisdiction will pay no taxes. A panama foundation pays no income tax, corporate tax, gift tax, inheritance, tax, estate tax and no succession tax. A Panama foundation is exempted from Stamp Duty for transaction such as property transfer. A foundation incorporated in Panama must pay an annual tax to the government of Panama.

For offshore formation a Panama offshore foundation must have a foundation council, beneficiaries, a founder and protector. The founder is the person who establishes the foundation. The foundation council acts as the board of directors for the offshore foundation. The responsibilities of the foundation charter can be laid out in the foundation charter upon formation. A foundation council according to the offshore foundation charter legislation must have no less than three (3) members. An offshore foundation can be incorporated with nominee council members.

The beneficiaries of an offshore foundation in Panama are those people who will eventually inherit the assets of the Panama Foundation. The beneficiaries are appointed or named by the protector of the foundation. The appointment of foundation beneficiaries can be done through a letter of wishes or simply appointed according to the foundation’s by –laws. The protector of a Panama foundation may also be the beneficiary of the same.

The foundation protector has the responsibilities of managing the assets in the offshore foundation. The foundation council has the responsibility to appoint the protector. In general the protector for Panama foundations are usually the person or family who choose to set up the offshore entity.

The offshore jurisdiction of Panama also incorporates offshore trusts. Like the offshore corporation and offshore foundation a Panama offshore trust also has tax benefits. An offshore trust r in Panama will pay no taxes on foreign gained income. Offshore trust formation in Panama can be done by individuals and corporations. For offshore trust formation a document called a trust deed must be completed. A trust deed is regarded as a private document and its registration with the Registrar of Company is not obligatory. The information which can be included in the trust deed is as follows:

  • A descriptions of the assets in the trust
  • The appointment of beneficiaries
  • A document/letter stating permitting that the trust be formed
  • The duration of the trust
  • The manner in which trust assets are to be distributed
  • The name and address of the registered agent
  • The responsibilities of the trustee

A Panama offshore trust must have the following components: a trustee, settler and beneficiaries. The trustees act as the director of the trust managing the assets of the trust. The Beneficiaries are the person who inherits the assets of the trust. The Settlor is the individual who sets up the trust.

Offshore company formation in the Republic of Panama has many benefits. The offshore tacx haven of Panama provides privacy for offshore trusts, offshore foundations and offshore corporations. A jurisdiction of choice for many offshore corporations and individuals Panama provides excellent services. Offshore trusts, foundations and corporations incorporated in the tax haven of Panama can own bank accounts in the jurisdiction or any other country. Offshore entities formed in the offshore jurisdiction of Panama are protected by very strict Panama legislation.