Panama Corporation

Panamanian corporations may be organized by two or more persons of legal age (who may be Panamanians or foreigners), as well as juridical entities, for any lawful purpose(s) for which the incorporators subscribe at least one share each, of the authorized capital stock of the corporation being formed.

Panama is recognized worldwide not only for its tax benefits but also for its legal stability. Law 32, which governs Panamanian Corporations, is a clear example of this, having been enacted in 1927 and remaining in force until today.

Foreign corporations may have offices and undertake commercial and economic activities in Panama after having filed with the Commercial Registry the deed of incorporation, the copy of the last balance sheet together with the statement of the capital stock to be used in the country and the certificate of incorporation of the corporation issued and authenticated by the Panamanian Consul in that country.

The meeting of the Shareholders’ Meeting shall be called in writing and in the name of the Chairman, Vice-Chairman or the person authorized by the Articles of Incorporation. A record shall be made of the reason for the meeting and the time and place of the meeting.

Two or more companies may merge to form a new company by signing an agreement stating the terms of the merger. This agreement must be submitted to the shareholders of each of the constituent companies to vote their approval and then be registered in the Mercantile Registry.


It is the document through which the corporation is constituted. It must be elevated to Public Deed and registered in the Public Registry of Panama. The corporate charter can be issued in any language.

In order to register a corporation, a corporate charter must be subscribed in which the names and addresses of each of the subscribers of the charter, the name and domicile of the corporation, the purpose, the capital stock, the par value of the shares, its duration, the name and domicile of its agent in Panama, the name and address of the directors must be mentioned.

The deed giving notice of this memorandum of association must be filed with the Mercantile Registry. This memorandum of association may be amended in any of its clauses.

The activities that a corporation can have are very broad, it can engage in any type of lawful activity.

The authorized capital of a Panamanian corporation does not have to be fully subscribed or paid in. It must only appear in the articles of incorporation and will be represented in shares.

The incorporating attorney or his law firm generally acts as the Resident Agent of the corporation, which is a legal requirement in Panama.

The Resident Agent does not have to file any kind of report to the Panamanian government. Its function is to serve as a liaison between the corporation and the Panamanian government, informing the company’s directors of the legal and tax obligations on a monthly and annual basis.

A corporation may be formed by two or more persons of legal age and of any nationality and sex.

The corporation will be formed by a President, a Secretary and a Treasurer who will be elected by the Board of Directors and the same person may hold two or more offices if so recorded in the Articles of Incorporation.

The Board of Directors must be formed by at least three members of legal age who will have control of the business of the corporation. A majority of the members of the Board of Directors must be present to make decisions regarding these businesses.

Unless otherwise stated in the Articles of Incorporation, all shareholders shall have the right to vote during the meetings of the Shareholders’ Meetings and may even be represented by a proxy appointed by public or private document.

Panamanian corporations must have a minimum of three (3) directors who must be natural persons. They may be of any nationality and need not necessarily be shareholders of the corporation. The names and addresses of the directors are public and must appear in the articles of incorporation. In case the client does not wish to appear in the board of directors, our firm can provide the service of three (3) nominee directors required by law.

Shares may be issued in the following forms:

  • Nominative Shares: These are issued specifying the name of the owner. They are not registered in any public document.
  • Bearer Shares: These are issued without indicating the name of the owner of the share. The owner would therefore be the holder of the share. They can only be issued when they are fully paid and released. They are not registered in any public document. In compliance with Law 48 of August 6, 2013, measures are adopted regarding the immobilization of bearer shares of corporations incorporated in Panama in which the resident agent or any institution accredited for such purposes, must act as custodian of the original certificates.
  • Shares with Nominal Value: These are those that have a predetermined value before being sold. The value of such shares is indicated by the interested parties in the articles of incorporation.
  • Shares without par value: The amount of the contribution is not indicated and they may be issued provided that the articles of incorporation state the number of shares without par value.
  • Common Shares: These are the shares that give the right to vote at the shareholders’ meeting.
  • Preferred Shares: They do not give voting rights.

The corporation may create and issue one or more classes of shares, with or without par value. Bearer shares may only be issued when they have been fully paid and paid up.

The company must have a Share Register with the names of the persons who are shareholders of the company and their corresponding personal data. If bearer shares were issued, the number of shares, the date of issue and whether they have been fully paid up and released must be indicated.

Panamanian law allows corporations to be incorporated in perpetuity, that is, for an indefinite period of time. However, if the corporation is found in default of the payment of the single tax for three consecutive years, the Public Registry of Panama will file a marginal, where subsequently if two more years pass without the payment of this debt, the corporation will be automatically closed.

The corporation must have an office in Panama or in any other place determined by the articles of incorporation.

Panamanian corporations are subject to the payment of a tax called “Tasa Unica”. The first Tax must be paid when the corporation is incorporated and the payment is US$300.00, such amount is included in our fees.

In subsequent years a fee of US$300.00 will be paid to keep the corporation in good standing with the Panamanian State.

In case the company has no income in Panama, any income that the company obtained outside of Panama will be exempt from Income Tax in Panama.

Traditionally an annual fee of US$150.00 to $250.00 is charged for the Resident Agent. The Resident Agent does not have to file any type of report to the Panamanian government. Its function is to serve as a liaison between the corporation and the Panamanian government.

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