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Panama: Types of Company

Corporation (Sociedad Anonima)

The corporation limited by shares is the most frequently used corporate form in Panama, and is the usual choice for an offshore operation.

Corporations are formed under the Law No. 32 of 1927 and the Commercial Code (Decree-Law No. 5 of 1997, Article 5). A corporation is formed by two subscribers (or nominees in the case of absent foreign subscribers) who execute the Articles of Incorporation (Statutes) before a notary and then record them at the Public Registry Office, paying a capital tax (minimum US$60.20 on the usual capital of US$10,000). There is an annual registration fee of US$300. All commercial and industrial businesses must have a Notice of Operations in order to engage in business unless they are specifically exempt. The cost of a Notice of Operations is 2% of a company's net worth up to a maximum of US$60,000. Companies operating in any of the Free Zones are subject to an annual license tax of 1% of net worth up to a maximum of US$50,000.

Following incorporation, only one shareholder is necessary. Shares can be of various classes, can have par value or not, may be registered or bearer. There is no minimum capital, and no paying-up rules, except that no-par-value and bearer shares must be fully-paid when issued. Strict regulations now apply to bearer shares: the registered agent must keep the bearer share certificate in safe custody and must notify the Registrar about such shares.

There must be at least three directors, and their names must be in the Articles as filed; changes to directors must also be filed. Each corporation must have a resident Panamian agent (a lawyer), named in the Articles; there are no other filing requirements unless the Articles are changed or the corporation is merged or dissolved.



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