The Republic of Panama is on the isthmus that connects North America to South America and is the southernmost country in Central America. The Panama Canal, completed by the United States Army Corps of Engineers in 1914, is a waterway connecting The Atlantic Ocean and the Caribbean Sea to the Pacific Ocean. Tolls from the Canal make up a large portion of the country’s gross domestic product, or the value of all goods and services produced within the country. Panama’s economy is quickly growing, making it a popular choice for offshore business formation.
Panamanian Corporations, the name given to offshore businesses in Panama, are created under Law 32 of the General Corporation Law. This law provides for a flexible corporate structure while protecting privacy. It is an excellent statute for offshore businesses to develop and interact in the international business world. In fact, it is so well-designed that other jurisdictions have mimicked its framework.
This jurisdiction offers a completely tax-free haven for all offshore business activities outside of Panama. Two local citizens act as the organizers and subscribers for the incorporation, and it is customary to have a local registered agent in Panama as well. At least three directors are required; however, nominee directors are typically appointed, as their information is part of public record. The jurisdiction also requires at least three officers to fill the roles of president, treasurer, and secretary. The officers can be individuals, corporations, or some other entity. While an officer may hold more than one position, he may not be both president and secretary. Those named as directors can also be officers.
Shareholder and director meetings are not required, but can be held in any country or by way of virtual meetings. Panamanian Corporations have no reporting requirements nor are there any exchange controls or restrictions.