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| Additional information |
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| Midland Counselors at Law |
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Overview:
The law 32 from February 26, 1927 governs everything related to Panamanian companies. It is a liberal style law that has been characterised throughout the years because of its clearness and simplicity. The following advantages stand out among the various advantages that the Republic of Panama offers to constitute companies through shares: a tax regime that is ruled by the principle of territoriality, an international financial centre, a currency with the same value of the American dollar and a privileged geographic position.
A Panamanian Company can be formed by 2 or more people who can sign in the presence of a public notary the constitutive articles of the social agreement, (The subscribers don’t need to be Panamanian citizens or residents). Then the public deed needs to be presented to the offices of the Panamanian Public Registry for its respective registration. Once this is done, the company would be able to start its operations.
Assuming the necessary information can be provided via telephone or e-mail, an Company can be formed in forty eight hours and be sent via courier to any part of the world in less than a week. The information that needs to be provided is the following:
The name of the company, which can be in any language, cannot be the same as any other existing company. The abbreviations INC., CORPORATION or S.A. are normally used.
The general purposes of the company.
The amount of the authorised capital stock and the kind of shares, with or without nominal value.
The full names and addresses of the first directors and principals.
Advantages of an Panamanian Company
In our legislation for Companies there is no kind of restriction on the shareholders. They can be foreign citizens or administrative people, and it is also possible that only one person owns the shares of the company.
All the shares of the company can be to the bearer or nominal. The authorised capital should be established within the articles of the social agreement and it could be expressed in the current legal currency of any country. It is not an obligation to pay the capital of the company at the time of its registration. Because of the principle there is no need to register the shares in a public office; the company’s unique obligation is to register them in the book of shares registration which can be in Panama or in any other part of the world. In the event that the shares are to the bearer the only thing that would be necessary to write in the book of shares registration would be the certificate number, issuing date, paid amount and value.
There is no Panamanian Government branch office that requires information about the activities of an Panamanian Company, which carries out its operations outside the territory of the Republic of Panama.
Also the Ministry of Economy and Finance of our country does not require an income tax report for this kind of company. It is not legally required that the company’s assets equal the authorised capital stipulated in the articles of the registration.
Therefore a Company with a declared authorised capital of ten thousand dollars (USD $ 10,000.00) can have a bank account of millionaire amounts or own real estate valued in hundreds of thousands of dollars. It is very important to establish that the reported authorised capital can simply be fictitious as long as it is not paid nor credited to be existent, because the law does not require the previous or retrospective payment of the capital stock. In an Panamanian Company there should be no less than three people of any nationality as directors. As far as the principals are concerned, the law stipulates that the company should have at least one president, one treasurer and one secretary.
Because a person can occupy 2 positions, a minimum of two people can act as the principals. The principals can be directors and vice versa. The directors or principals of the company don’t need to be shareholders of the same. The meeting of the board of directors can be held in any part of the world and the directors can personally attend it or do it through a power or attorney.
The Company can be dissolved through a resolution of most of the shareholders and in the event that there is a disposition or a decisive date established in the articles of the social agreement, it will be dissolved in full right.
The dissolution of resolution should be made official through any Public Notary and registered in the commercial section of the Public Registry and once it is registered the dissolution certificate should be published in any of the local newspapers.
If no shares have been issued, the resolutions of the company can be approved by the share’s subscribers.
Minimum Requirements that a Social Agreement Should Contain:
The names and domiciles of the ones subscribing to the social agreement;
The company name, which will not be equal or similar to the one of any other registered company. The name should include a word, phrase or abbreviation which indicates that this is an company and distinguishes it from a natural or juridical person of another nationality. The name of the company could be expressed in any language.
The general object or objects of the company;
The amount of the capital stock, the number and the nominal value of the shares in which it is divided; and if the company is to issue shares without a nominal value, the amount of the capital stock and the nominal value of the shares could be expressed in the current currency of the Republic of Panama or in a golden legal currency of any country, or both of them;
The domicile of the company, which could be in the Republic of Panama or any part of the world;
The company’s duration.
The number of directors which should not be less than three ,specifying their names and addresses.
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