Certainly
at one point or another, investors come to the decision that they would
like to find a way to reduce their tax burden,
protect their assets from ridiculous lawsuits
and protect their confidentiality. Whether one is looking for these
things, or simply
to pre-plan for a way to save on estate
taxation, the Panamanian Corporation and Foundation offers the most secure
and least
expensive way to accomplish these goals.
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The
corporation law of the Republic of Panama provides that any two natural
persons acting as the organizers and the
subscribers may appear before a Notary
Public to organize and constitute a corporation (In Panama Public Notaries
govern
most entities under the direction of a
government institution). It is the usual practice for natural or
juridical persons outside of
Panama to accomplish the formation of
a Panama corporation through a local Panamanian law office, a trust company,
or a
professional management services firm.
For the purpose of drafting necessary documents, the following simple information
and particulars are supplied by the client
to the incorporation agent:
Company Name
- A preferred name, with two or three
alternatives in the event that the desired name may conflict with a
name already in use, expressed in any
language, The name must also include a corporate ending such as (Anonymous
Society),
Corporation, or Corp, Incorporated, or
Inc., Limited, or Ltd. to clearly denote that it is an incorporated company.
Articles of Incorporation
– One must specify the purpose of the
company and certainly that can be as broad or specific,
as you would wish. It is certainly
possible to indicate a number of activities, if that is desired.
The capital of
a Panama corporation -
is expressed as Authorized Capital,
and there is no minimum capital that must be paid in.
I suggest that the indicated capital be
no more than US$ 10,000.00 as the initial registration tax or fee is a
function of the
authorized capital. The minimum, initial
capital registration fee is US$70.00 (based upon $ 10,000 authorized share
capital).
The annual minimum tax thereafter, assuming
there are no profits derived from any business activity in Panama, is $
150.00.
You will need the services of a notary
and accountant to make this declaration for you, but this is not a problem
and usually costs
about $ 150.00
Shares -
may be issued in Bearer form or in Nominative form. Preferred, Class
A, Class B, voting, non-voting, and other
shares structures are also permitted.
Keep in mind that the “Articles of Incorporation” are public record.
Directors
- A minimum (with no maximum) of three
directors is required. These may be of any nationality, residence or
occupation. Nominee directors are permitted
and many offshore formation firms will try and convince you to use their
nominees for this purpose. The decision
to use nominee directors is yours to make and really comes down to trust.
Do you trust the person whose
name appears on your documents as having control over your company? In
reality, you
can certainly choose anyone that you wish,
but I advise you that there are some other strategies you can employ if
you
wish to remain anonymous. Juridical persons
(other corporations or entities) can also act as a director. We can also
suggest some ways to use nominees for
some things, while keeping yourself in complete control.
Officers
- A President, a Treasurer, and a Secretary
are required. These may be natural or juridical persons, and there
are no requirements as to nationality,
residence or occupation. While one person may hold more than one
office, it is
customary that the President should not
also be the Secretary. One of the officers is usually named Vice-president.
There
may be as many Vice-presidents as required.
Managers or other positions may also be named if desired. Normally the
directors and the officers are one and
the same, but they certainly do not have to be.
Domicile
- The company can be domiciled anywhere
in the world, but I advise that you stay with Panama or another tax haven
as the domicile of the Panamanian Company.
The Panamanian Company must have a Registered Agent domiciled in Panama.
It is required that the agent is a practicing
lawyer or law firm. Domicile of registry is not necessary domicile
of Business.
A very important point to understand when
planning tax strategies.
Duration - The Corporation may have a limited or unlimited life, however, it is customary and practical for the duration to be perpetual.
Time To Establish
The Company - A
competent attorney in Panama can get the incorporation process done in
about 1 week
to ten days. If the paperwork is
being accomplished by mail, and your check needs to clear, then of course
the process can take a
month. But anyone in a rush can
incorporate in person in about 7 to 10 working days.
As a word of advice, stay away from “shelf
corporations” that some of these offshore firms will try and sell you.
You do not know
if the offshore formation company or attorney
has actually made any material changes when you buy a shelf company and
you also
do not know if the company was engaged
in something that will come back to bite you later on. The incorporation
process is
convenient and quick, so why not get a
new corporation from the start?
Corporate Minutes,
Seals, Etc. - Corporate
Seals or Minutes Books are not required, especially if the corporation
does not
operate in Panama. With your certified
copy of the “Articles of Incorporation”, you should not have an problem
opening a bank
account or conducting other business.
Expenses
- Our experience is that some firms
have charged up to $ 3,000 for one single corporation. We usually
work with
our clients on a flat fee basis.
We prefer the flat fee basis, because we can then shop for the lowest price
for our client and truly
work as an independent advocate in this
way. Regardless of what type of arrangement desired, the entire cost
should not
exceed $ 2000.00 (with federal express
fees, legal fees, etc. included in this amount)
Renewal and registration costs should
run no more than $ 500 total. There are a number of offshore formation
firms and lawyers
that charge outrageous amounts of money
to set up and maintain both Foundation and Corporation structures. Some
of these
prices are way out of line, but most people
do not know any better and end up paying quite a bit.
For
Additional Information Regarding the Use of Trusts and other vehicles for
asset protection, please send us an Email.