Panama holding company formation
Incorporation in Panama
Due to its structure, geographical position, political stability and characteristics of its economy, Panama has become one of the most important tax havens of the Western Hemisphere. It has excellent international transportation and communication systems; the United States Dollar has been a currency of legal tender for more than ninety years.
Panama has taken several steps to modernise its economy and promote foreign investment. Most Panamanian and foreign investors choose to form Corporations. There are no exchange controls, currency restrictions or reporting requirements, and Panama imposes no limits on monetary transfers to and from the country.
No reporting requirements.
It is possible to keep a business under direct control while maintaining complete confidentiality. Names of beneficial owners are not publicly available.
It is not required to file any changes to ownership schedule, after the registration is complete.
It is not required to maintain a legal address.
No citizenship or residency requirements or restrictions with respect to Owners, Directors and Officers as with most other tax havens.
Stockholders’ and Directors’ meetings may be held anywhere in the world.
Capital Shares may be issued in a nominative form, or to “Bearer” – the ideal protection of the Corporation owner’s identity and total privacy.
Funds and accumulated offshore profits can be deposited or invested in any country in the world without becoming subject to taxation in Panama.
One person might hold all three positions of a President, Corporate Secretary and Treasurer.
Other advantages of Panamanian corporations
Ultimate financial privacy
Income tax reduction or elimination
No inheritance, succession or gift taxes
Protection from inflation
Reduction in legal liabilities
Reduction in operating expenses
Freedom from currency exchange control
Local Government concessions, subsidies and support
Data on Owners and Directors is not publicly available and remain confidential
Easy access to North American and European Capital Markets
No international trade tariffs
No annual tax return requirements
No import/export quantity limitations
No costly bureaucracy
Panama holding company
The offshore holding can be sub divided in 2 levels parent company & independent subsidiary. The parent company which is commonly referred to as the holding company while the independent subsidiary is one which is connected with the offshore holding company.
Whether on or offshore, the subsidiary provides the actual economic performance in this model. The offshore parent company has only shares in the company & receives profits through dividends.
Advantages of Panama holding company
Profits collected from Panama Offshore Holding are free from any tax liability in Panama. Thus, it can be said that it’s a tool for procurement of tax benefits, to circumvent shareholding limits and realization of benefits as part of investment.
Special taxation conditions are applicable only if the holding company maintains its headquarters in Panama, thus resulting in beneficial taxation conditions. The profits being transferred from the subsidiary to the offshore holding company will not be considered as taxable income.
Since Cartel regulations often prohibit companies from holding larger capital investments in other companies so in many cases when the investment exceeds the minimum threshold value then it is associated with legal obligations. In order to avoid legal issues, one can establish a Panama Offshore Holding company.
The Panama holding company enables the transformation of direct equity investments into indirect equity investments. The offshore holding company existence makes it harder for legislators & regulators to uncover & prohibit indirect equity investment.
Panama company information
Type of company for international trade and investment
Generally, corporations are incorporated under the Corporation Statute Law 32 of the 1927 Commercial Code. Limited Liability Companies and Limited Partnerships are used also.
Procedure to incorporate
Restrictions on trading
Cannot 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.
Language of legislation and corporate documents
Registered office required
Name approval required
Time to incorporate
Language of name
Names requiring consent or license
Bank, building society, savings, insurance, assurance, reinsurance, fund management, investment fund, trust or their foreign language equivalents.
Suffixes to denote Limited Liability
Disclosure of beneficial owner to authorities
Authorized and issued share capital
Classes of shares permitted
Financial statement requirements
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