Panama Company Formation

Panama company formation is cost-effective and fast. Panama company formation has no minimum capital requirements.

If structured properly, a non-resident Panamanian company is legally tax-exempt on income derived outside of Panama. However, an annual franchise tax of US$250 is payable in lieu of corporation tax.

Following Panama company formation, it is not necessary to file financial reports or tax returns, provided the company's activities occur outside Panama.

A preferential property tax rate of 1% is offered to property owners who willingly update the value of their property (versus the usual 2%).

Panama is a member of the Free Trade Area of the Americas (FTAA) which makes it an optimal country to enter the American market.

Panama was rated 4th by Foreign Direct Investment Magazine as a place that has the best foreign investment opportunities in the world.

Government plans include implementing a free WIFI system across the island, which will significantly reduce the cost of international communications and facilitate expatriates and tourists communicating with their home countries.

It is easy to open global corporate bank accounts to support Panama company formation. Healy Consultants works with internationally recognised banks such as HSBC, Standard Chartered and Citibank to provide corporate bank account services.

The Republic of Panama has signed double taxation agreements with countries including Singapore, Ireland, Barbados, Belgium, France, Italy, Korea and Luxembourg.

A minimum of two shareholders and three directors are required for Panama company formation. Corporate directors are permitted. The shareholders and directors can be of any nationality. In addition, a President, Treasurer and Company Secretary is required for Panama company formation. Following Panama company formation, shareholders and directors details are available for public viewing at the Mercantile Registry.

Panama is not perceived as a highly reputable jurisdiction in international business. On top of being labelled a tax-haven, Panama is rank 86th in the 2011 Corruption Perceptions Index by Transparency International, a global measure of corruption amongst public officials and politicians. Although this ranks Panama as moderately corrupt globally, it ranks moderate to well for the Americas region.

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Panama ranks 59th, as a 'moderately free' economy, in the Heritage Foundation's 2011 Index of Economic Freedom, a measure of freedom enjoyed in business, trade, monetary, financial, investment and labour markets.

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Due to the high level of bureaucracy in the country, doing business in Panama is a time consuming and tedious process. According to the World Bank's Doing Business 2011 Survey, Panama is the world's 72nd easiest place to do business. The survey measures factors including business start up procedures, time, cost and minimum capital required to start a business.