History of Panama
The Republic of Panama is located in the centre of the American continent, where North and South America meet. Formerly part of Colombia, the country declared its independence in 1903. Today Panama wishes to protect its environment (at the expense of national defense) and for good reason: the country has, proportionally, the most national parks in the world.
Panama as an Offshore Centre
Panama is an excellent offshore destination for import/export, petroleum and mining activities, but is not ideal for trade with Europe. The country has the largest free trade zone in America (the Colon Free Trade Zone) which gives total tax exemption.
The various offshore entities available in Panama are :
- Panama Corporation : does not require a minimum capital and requires the appointment of three directors and at least one shareholder. Its creation must be approved by a notary and the Public Registry Office.
- Panama Limited Partnership : requires a capital of between USD 2 000 and 2 500 000, and the names of all members must be recorded in the Trade Register.
- Private Company : liability of shareholders is limited to the amount allocated.
- Panama Trusts : to settle a Panamanian Trust, investors must be of foreign nationality, but they must have a Panamanian lawyer.
- Panama Foundation: allows property to be held but does not allow the exercise of a commercial activity. The minimum capital is USD 10,000.
Panama entities may be used to invoice the United States or South America and Asia but are not suitable for use in Europe (especially France, Germany and Italy). Since Panama has a relatively poor international reputation and is strongly associated with tax avoidance and evasion invoices are likely to be rejected by tax authorities and be subject to punitive tax measures.
Types of Panama Companies
Creating a company in Panama takes around nine days and involves six steps. There are only two types of company in Panama.
|Types of companies
||Number of Partners, Shareholders or Members
||At least one shareholder, maximum of 25. Limited liability.
||At least one shareholder, limited liability.
Panama Trade Register
Doing Business (entrepreneurship)
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