Corporations and Foundations
Advantages of Panamanian Corporations
Panamanian corporations are easy to create and modify, being able to be constituted from abroad. From the fiscal point of view, Panamanian corporations which generate their income outside our territory do not pay income taxes in Panama and the only tax they pay is a symbolic tax called “Annual Franchise Duties of Corporations” for the amount of US$250.00 Dollars of the United States of America. In many countries, foreign companies do not pay taxes, therefore, having a Panamanian company you will not pay taxes in the country where the activity is being developed or in Panama.REQUIREMENTS:To constitute a Panamanian corporation you need:
- The name of the corporation;
- Two subscribers of the articles of incorporation who can be either Panamanians or foreigners.
- Establish the Directors of the company who can not be less than three (3) people or more than seven, including their domicile.
- Establish the position of the Dignitaries of the corporation, who could be from three (3) to six (6) (President, Vice-President, Secretary, Assistant Secretary, Treasurer, Assistant Treasurer, Member or Prosecutor). One person can hold more than one position.
- The main object of the corporation.
- The type of Nominal Stocks or in the Bearer’s Name.
- One Panamanian Attorney’s Firm as Resident Agent.
- As optional clauses, you can include the Regulations or special dissolution mechanisms.
- PRIVATE INTEREST FOUNDATIONS.
The purpose of the Foundations is to replace the Non-Profit Associations and, at the same time, is very similar to the Trusts. They have the same fiscal advantages than corporations and also could be constituted by One natural or legal personal (national or foreign). It can not carry out commercial activities permanently, but it can exercise commerce temporarily, for activities related to its properties.
There are two mechanisms for the creation of these Foundations:
- By a private document created by the founder or founders, whose signatures must be authenticated before a Notary;
- By a private document before a Notary Public.
In both cases the Notary can be from the place or country of incorporation.
The Minutes of the Foundation must include:
- The Name which must include the word FOUNDATION;
- The Patrimony which can not be less than US$100,000.00;
- The members of the Foundation’s Council and their addresses;
- The domicile of the Foundation;
- The name and domicile of the Resident Agent, who must be an attorney’s firm from Panamá;
- Purpose of the Foundation;
- The way to designate the beneficiaries. (This in this case could be all the Associations, which could include the founder or founders).
- The reserve of the right to modify the Minutes of the Foundation;
- The duration of the Foundation;
- The purpose of the properties and the way to liquidate them;
- Any other legal clause, in which the regulations of the Foundation could be included, any reference to the revocability of the transfer of properties, the accountability by the Members of the Foundation’s Council, the way to notify the meetings, etc.
- The Foundation must pay the registration rights, an Annual Franchise Duty of Corporations (“TASA UNICA” in Spanish) (for the amount of US$250.00) and also, must pay the same annual to the attorneys who are the Resident Agents.
The transfer of the properties to the company will constitute the patrimony, and must be done once the Foundation acquires its judicial entity, that is, once it is inscribed in the Public Register.