Atrium and Associates Corporate and Legal Services

Why choose Panama

When starting a business

Panama companies are established according to the regulations outlined in the General Corporation Law, specifically Law 32 dated February 26, 1927. This legislation has not only served as a template for numerous other legal systems but also provides a robust base for carrying out lawful commercial operations on a global scale.

Panama's strategic location, home to the Panama Canal, facilitates substantial international interactions, fostering connections between various governments and organizations across the globe.

Furthermore, Panama has become a popular destination for individuals seeking to protect their wealth through estate planning and asset protection. Moreover, Panama offers several advantages, namely, a favorable tax system, strong privacy laws and a stable economy.

Advantages of establishing a company in Panama

Panama company formation - Key Benefits

Favorable Legal Framework:

Setting up a company in Panama offers a business-friendly environment through its well-established legal system, particularly under the General Corporation Law (Law 32 of February 26, 1927), which is recognized internationally as a model for various jurisdictions. This framework ensures a solid foundation for conducting legitimate business activities.

Political Stability:

Panama stands out for its political stability, making it an attractive choice for businesses. Its governance model, which incorporates three branches of government similar to the US system, provides checks and balances that contribute to a consistent and reliable operating environment.

Geographic Advantage:

The Panama Canal, a vital global trade route, situates Panama as a strategic hub connecting nations and organizations worldwide. This geographical advantage enhances accessibility and fosters international collaboration.

Tax Benefits:

Panama offers favorable tax policies, including territorial taxation, which means that income generated outside the country is not subject to local taxes. This can result in substantial tax savings for international businesses.

Banking and Financial Services:

Panama boasts a well-developed banking and financial sector, attracting investors and businesses looking for secure and efficient financial services. Its confidentiality laws uphold client privacy while complying with international standards.

Currency Advantages:

The country uses the US dollar as its official currency, eliminating currency exchange risks and simplifying financial transactions for businesses with international operations.

Infrastructure Development:

Continuous investments in infrastructure, such as transportation and telecommunications, enhance connectivity within Panama and strengthen its role as a trading and business hub.

Free Trade Zones:

Panama has established free trade zones that offer incentives like tax exemptions and simplified customs procedures, facilitating international trade and commerce.

In conclusion, Panama's advantageous legal, political, geographic, and economic features make it an appealing destination for businesses seeking stability, favorable taxation, international connectivity, and growth opportunities.

Business Company in Panama

Main uses

Companies incorporated in Panama are often used for a variety of legitimate business purposes. Some of the main uses of Panama companies include:

International Trading:

Panama companies are commonly utilized for international trade activities due to the country's strategic location and the Panama Canal's connectivity, making it an ideal hub for import and export operations.

Asset Protection:

Panama's strong confidentiality laws and asset protection mechanisms make Panama companies appealing for safeguarding assets and wealth from potential legal disputes, creditors, and other risks.

Tax Optimization:

Panama's territorial tax system allows businesses to structure their operations in a way that minimizes taxes on income generated outside of Panama, resulting in potential tax savings.

Holding Companies:

Panama companies can be used as holding entities for investments, real estate, intellectual property, and other assets, providing a secure and tax-efficient way to manage diverse holdings.

Intellectual Property:

Entrepreneurs often establish Panama companies to manage and protect intellectual property rights, copyrights, patents, and trademarks.

Consulting and Services:

Panama companies can be established to offer consulting, financial, legal, and other professional services globally, taking advantage of the jurisdiction's international reputation.

E-Commerce:

E-commerce businesses can benefit from Panama's favorable tax environment and logistical connectivity, making it an attractive location for online retail and distribution.

Investment Vehicles:

Panama companies can serve as investment vehicles for various ventures, including real estate development, energy projects, and infrastructure investments.

International Expansion:

Multinational corporations often use Panama companies as part of their global expansion strategies, capitalizing on the jurisdiction's business-friendly environment and access to international markets.

Confidentiality and Privacy:

Panama's strict confidentiality laws enable companies to maintain a level of privacy regarding ownership and operations, appealing to individuals and businesses seeking discretion.

Banking and Finance:

Panama companies can engage in financial activities such as investment management, lending, and other financial services.

Shipping and Maritime Services:

Given its maritime significance, Panama companies are used in the shipping and maritime industry, including ship registration and related services.

Consultancy and Holding Structures:

Panama companies can serve as consulting entities or holding structures for multinational corporations, facilitating management and coordination across international operations.

Estate Planning:

Panama companies can be part of estate planning strategies, helping individuals manage and distribute their assets efficiently and securely.

Global Market Access:

Panama's strong international relations and trade agreements provide companies with opportunities to access a diverse range of markets and regions.

In summary, Panama business companies offer a multitude of uses for individuals and entities seeking to leverage the jurisdiction's advantageous legal, tax, and business environment for their specific commercial goals.

Company Registration in Panama

Procedures to incorporate

Panama companies offer a range of corporate features that contribute to their popularity for various business and financial activities:

Limited Liability:

Like most corporate entities, Panama companies offer limited liability to their shareholders, meaning that shareholders' personal assets are generally protected from the company's liabilities and debts.

Separate Legal Entity:

A Panama company is considered a separate legal entity from its owners, which allows it to enter into contracts, hold assets, and engage in business activities in its own name.

Perpetual Existence:

Panama companies have perpetual existence, meaning that changes in ownership or management do not affect the company's continuity. The company can continue to operate even if shareholders or directors change.

Ease of Transferability:

Ownership of shares in a Panama company can be easily transferred, especially when using bearer shares, which can be passed to a new owner without formal registration changes.

Minimal Capital Requirements:

There are no strict minimum capital requirements for incorporating a Panama company, allowing flexibility in determining the initial capitalization based on business needs.

Bearer Shares:

Panama companies can issue bearer shares, which are not registered in the company's name. This feature enhances privacy and simplifies the transfer of ownership.

Board of Directors:

Panama companies must have a minimum of three directors, and they can be of any nationality and reside outside of Panama. This flexibility facilitates international management.

Shareholders' Meetings:

Annual general meetings of shareholders are not mandatory for Panama companies, reducing administrative requirements. Meetings can be held anywhere in the world.

No Foreign Exchange Restrictions:

Panama companies can conduct business and hold assets in various currencies without facing foreign exchange restrictions or currency control.

Registered Agent and Office:

Panama companies must appoint a registered agent and maintain a registered office in Panama. The registered agent acts as a liaison between the company and local authorities.

Nominee Services:

Nominee directors and shareholders can be appointed to enhance privacy and confidentiality, although the ultimate beneficial owners remain confidential.

Flexibility in Activities:

Panama companies can engage in a wide range of activities, from trading to investment holding, consultancy, real estate, and more, offering versatility for different business goals.

Confidentiality:

Panama's legal framework ensures a high level of confidentiality for company owners, as the names of shareholders and directors are not publicly disclosed.

Exemption from Local Taxes:

Panama companies that conduct business outside of Panama are exempt from local taxes, contributing to potential tax savings for international operations.

Strategic Location:

Panama's strategic location in the heart of the Americas and its connection to global trade routes make it an attractive base for companies with international ambitions.

Access to Double Tax Treaties:

Panama has signed multiple double tax treaties with other countries, providing benefits such as reduced withholding tax rates on cross-border income.

Panama Corporate Taxation

Panama's corporate taxation system is characterized by its territorial tax regime, which offers certain tax advantages to companies conducting business primarily outside of Panama. Here are the key aspects of Panama's corporate taxation:

Territorial Tax System:

One of the most significant features of Panama's corporate taxation is its territorial tax system. This means that Panama companies are generally subject to taxation only on income generated within Panama's borders. Income earned from foreign sources is exempt from Panamanian taxes.

Income Tax Rates:

Panama companies are subject to a flat income tax rate of 25% on their taxable income derived from activities within Panama. However, it's important to note that the majority of Panama companies engage in international business and hold assets outside of Panama, which allows them to benefit from the territorial tax regime.

Exemptions for Foreign-Derived Income:

Income earned from foreign sources, including international trade, offshore investments, and services provided to non-residents, is exempt from Panamanian income tax. This exemption applies regardless of whether the income is remitted to Panama.

Dividends and Capital Gains:

Dividends received by Panama companies from other Panamanian companies are generally tax-exempt. Similarly, capital gains realized from the sale of shares or securities are not subject to Panamanian taxes.

Withholding Taxes:

Panama does not impose withholding taxes on dividends, interest, or royalties paid to non-residents, further contributing to the tax efficiency of Panama companies.

Annual Franchise Tax:

Panama companies are required to pay an annual franchise tax, which is a fixed fee based on the company's authorized capital. This tax is relatively modest and contributes to the cost-effectiveness of maintaining a Panama company.

Transfer Pricing Rules:

Panama has implemented transfer pricing regulations to ensure that transactions between related parties are conducted at arm's length. Documentation may be required to substantiate the pricing of these transactions.

Value Added Tax (VAT):

Panama has a Value Added Tax (VAT) system known as the ITBMS (Impuesto de Transferencia de Bienes Muebles y Servicios). The standard rate is 7%, and it applies to the sale of goods and services within Panama.

Double Tax Treaties:

Panama has entered into a limited number of double tax treaties with other countries. These treaties can provide benefits such as reduced withholding tax rates on certain types of income.

Atrium Services

Atrium & Associates specializes in Panama company formation services ranging from simple company registrations to complex tax planning and asset protection structures.

Moreover. Atrium provides a very comprehensive assortment of administrative services to Panamanian companies, including the provision of Nominee Directors, Nominee Shareholders, Mail Forwarding and Bank Account opening services.

We are also able to offer a ‘transfer in’ service whereby we can take over the management of your existing Marshall Islands Offshore Company, often for no cost at all.

How we can Help You!

Should you have any question or matter you would like to discuss or clarify with us, or

Should you like to receive further Information about our services and fees,…

Our multilingual team of business advisors is happy to assist you with all upcoming questions and issues in relation to your application.

You may call or email us, and we will be happy to assist you in a fast and efficient manner.

Contact us today for an initial complimentary consultation and find out how we can help you achieve your investment goals!

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