Political Situation

Panama is a well-located and well-endowed country which has been held back by ineffective leadership. If the Government manages to continue with business-friendly and liberal policies, the country will be successful.


The law in Panama is based on civil law with influences from Spanish legal tradition and Roman Law. Several features of Common law have also been accepted in Panama.


Spanish is the official language, but English is widely spoken.


Anonymity of company ownership and trust beneficiary relations. Privacy is assured. There are no tax treaties. Banking and shipping are Panama’s two main ‘offshore’ industries.


Panama is reached by plane both from Europe and the USA. Telephone, fax, mail and courier services are good. Courier connections to Europe do not take longer than three days.

Local Currency

The currency is the Balboa (PAB), which is pegged at parity to US dollar. There is no Panamanian paper currency and US dollar is de facto official currency for all but minor transactions.

Foreign Exchange

No restrictions; no Central Bank.


Incorporation and annual costs are low in view of the advantages of Panama companies.


There are no tax treaties All foreign source income is tax fee. Locally-sourced profits are taxed at up to 25%; Interest earned on bank accounts maintained in Panama by a Panama company is exempt from tax in Panama There is no capital gains tax but gains on real estate count as income; small withholding tax; There is VAT and import duties (reduced substantially)


- The standard authorized share capital of a Panamanian company is $10,000 divided into 100 voting shares of $100 each
− The minimum issued capital is either one share of no par value or one share of par value
− No paying-up rules, except that no-par-value and bearer shares must be fully-paid when issued
− Standard share capital currency is USD or other currency


− Bearer or registered shares with or without par value, several classes; later changes are all permitted
− The registered agent must keep the bearer share certificate in safe custody and must notify the Registrar about such shares
− A share register must be maintained at the corporate offices (no formal requirements) and a copy thereof at the registered office


− Minimum two subscribers but following incorporation only one shareholder is necessary;
− Nominee Shareholders permitted
− Shareholders’ records are not available to public

Shareholder’s Meetings, Assemblies Board

− Anywhere in the world
− Minimum three Directors, their names must be in the Articles
− Legal entities as Directors permitted
− No Local director requirement
− Changes to the Board must be filed
− Meetings of the Board of Directors may take place anywhere


− A President, a Secretary and Treasurer must be appointed
− Directors of the company can also serve as officers

Panama Public Register

The following documents have to be filed with the Panama Public Register:
− Memorandum of Association − Articles of Association − Subscribers to the Memorandum
− Registered Agent’s name
− Directors’ names
− No other filing requirements unless the Articles are changed or the corporation is merged or dissolved


− Use of Corporate Seal is optional;


− No requirement to file annual accounts
− No requirement to file annual company return


− Panama operates on a territorial tax system. Income earned from outside of Panama is not taxable in Panama.
− The annual license fee is $300


− Redomiciliation of a company from / to Panama is allowed, provided the laws of the foreign country permit companies’ migration


− Companies may be dissolved and liquidated either voluntarily or by means of judicial proceedings


− There is no formal procedure in Panama to strike a company off for non-payment of its annual tax, the company will simply incur surcharges