Panama is a country located in Central America but it is considered a paradise for offshore companies. Businessmen and foreign investors are interested in securing tax-free payments and capital. Panama is among the tax-free havens in the world. A great number of offshore companies are operating in Panama.
Why do foreigners get attracted to Panama when talking about the formation of an Offshore Company? Panama appeals the investors in several ways due to the benefits it offers to the offshore companies. Let us discuss some of its appealing facts:
As an owner of the offshore company, you need not pay any income tax, if the income earned is sourced out of Panama. So, overseas corporations are free of income tax payments.
Corporations working in Panama have to execute their operations under the territorial tax system. According to the Panamanian tax law, the business activities performed outside Panama are considered tax free. On the other hand, on the execution of any business operating within the Panama, company has to pay territory tax.
Corporates have to pay an annual corporate tax that is only USD 300. In case of late payment of the taxes, the corporations have to pay a fine of USD 50. In short, at the time of setting up an offshore company, you have to pay USD 550 only to compensate for the maintenance costs, annual corporate taxes, and cost of resident agents.
The offshore company set up in Panama
Panama authorities encourage overseas corporations and individuals to run business operations smoothly.
- Stakeholders of the company may be Panamanian or any foreigner.
- The banking system of Panama supports and encourages Offshore Corporations.
- There is no need to register the director, corporate, employees to set up a physical office and to register the offshore company. Only one corporate is enough to get the hold of the company overall.
- Companies in Panama usually hire agents that are residents of the area and handle all business activities within and outside the state. Most of the companies continue their operations online or via telephone; so there is no need to have any physical office.
- Meeting of the shareholders, directors, or agents can be held anywhere in the world.
- Corporates are allowed to keep the assets of the offshore company outside the Panama state.
How to incorporate a Panamanian Offshore corporation?
For this purpose, an agreement is required between two adults at least as per Law 32 of 1927. Both persons subscribe at least one corporate stock irrespective of the domicile or nationality of the two persons. This agreement refers to the Article of incorporation. This agreement is completed in front of Notary Public so that it could be transcribed into a deed and later on, this deed will get registered in the Public registry. It is a simple and easy process that requires only a few hours.
The public registry does not demand the announcement of the directors or other information regarding the offshore company.
Panama secures the assets and wealth of the foreigners as per Law 32 of 1927. Panamanian offshore companies offer versatility, security, and, coverage to its clients’ capital and assets earned. Corporations working in the state are free to buy real estate without paying any tax. In short, legislation of Panama company formation allows the businessmen, foreign investors, and corporations to do business in and outside Panama without paying any tax. The purchasing and selling of the property in and outside Panama is also tax-free for these overseas enterprises or individuals. If you are interested in establishing an offshore company, you will find Panama the best option. Foreign investors consider Panamanian offshore company as a security tool for their assets and wealth. The legal procedures are very simple and quick for setting up the company. The relevant authorities support and respond immediately and welcome the investors.