Panama, Republic in Central America, located on the narrow strip of land that connects North and South America. Its position between two continents and separating two oceans has played a defining role in Panama’s history. Panama, meaning “abundance of fishes”, occupies an area of 77,082 square kilometers. Its capital, Panama City, is on the Pacific coast at the entrance of the Panama Canal. The country has a population of approximately 2.6 million people of which half live in Panama City. The official language of Panama is Spanish. Documents in a foreign language, which are filed at the Companies Registry, must be accompanied by a Spanish translation. Spanish and English are used equally in business circles. Panama is a center of international business and finance with hundreds of international firms operating from Panama City.
Name: The name of the corporation must include a word, phrase, or abbreviation distinguishing it from a sole proprietorship or partnership and can be expressed in any language. The most common endings include: “S.A.”, “Corporation”, “Corp.”, “Incorporated”, and “Inc.”. Availability of a corporate name can be confirmed within a few hours. It normally takes one working day to incorporate a company. Corporation’s names may be reserved at the Public Registry for a maximum of 30 calendar days, subject to payment of a small fee.
TAXATION & FEES
Panama offers complete tax exemption on foreign source income and on transactions carried on outside the Republic of Panama, even though managed from Panama. The company is not required to file annual accounts. Only an annual fee of $ 250 must be paid to the government the first year. For consecutive years the annual fee would be $ 300. A $300 penalty will be levied on those companies that have not paid the required annual government fee for two consecutive periods.
Depending on the date of incorporation, Corporations and Foundations will pay their Annual Franchise Tax as follows:
|Date of Incorporation||Due Date|
|From January to June||July 15th|
|From July to December||January 15th|
Panama’s broad professional, commercial, and banking facilities, its freedom from tax on profits and its geographic location make it ideal as the documentary site for negotiations and execution of international agreements, transfer of titles, collections, and other legal and technical requirements in international operations. The absence of exchange controls, the free and unencumbered circulation of the US dollar, the tax exempt status of offshore transactions, the stability of corporate laws, the sophistication of the financial and service industry, and the confidentiality of bank accounts have attracted and contributed to the growth of the international financial and trading centers.