Offshore Management Alliance
Back to the Home Page
Contact Us


55 Street, El Cangrejo, Building Renaissance 15th Floor
Panama City, Republic of Panama
Tel: +011 (507) 263-0649
Fax: +011 (507) 265-8534
800 Line: 1-866-588-1728


Panamanian Offshore Corporations

Go HERE for a list of "ready to go" shelf companies


Panamanian corporation law offers a wide variety of incentives for resident or non-resident businessmen and investors due to the flexibility of the fiscal law.

In Panama the formation and operation of corporations are regulated by Law N° 32 of 1927. The existing legislation provides, among others, the following incentives:

  1. Taxation in the Republic of Panama is based on the principle of the source of the income. Income obtained from operations performed abroad is excluded from income obtained from sources within Panama and therefore is not taxable under Panamanian law.
  2. There are no currency restrictions in Panama. The U.S. dollar is the circulating medium.
  3. There are no requirements to file any reports with the Panamanian government regarding any offshore activities, except for payment of the annual government franchise tax of US$ 250 to remain in good standing.
  4. It is not necessary to subscribe all or any percentage of the share capital.
  5. Two or more persons of legal age, even though not citizens or residents of Panama, may establish a corporation for any lawful purpose or purposes, in accordance with the formalities prescribed by this law.
  6. It is not necessary for the interested parties to be present in Panama for the purpose of organizing a corporation. In this case, corporations are formed through members of our law firm in Panama, who execute the basic instrument for incorporation called the Articles of Incorporation.
  7. The Articles of Incorporation are signed and protocolize before a Notary Public and recorded at the Public Registry. After this the corporation is in existence for practical purposes. Later, when the corporation becomes legally established, the justifys which may be derived from being a subscriber are assigned by a private document to their real owners.
  8. If the interested parties (owners of the corporation) wish to carry out any transaction in connection with the corporation without appearing as directors or shareholders, the Board of Directors may grant them a general power of attorney to act in the name of and on behalf of the corporation.
  9. The Articles of Incorporation may be executed anywhere within or outside the Republic of Panama, in any language, and shall be in the form of a public document or any other form, provided that the signatures appearing thereon are certified by a Notary Public or before any other public officer authorized for that purpose in the place of the execution thereof.


  1. The name and domicile of each subscriber to the Articles of Incorporation.
  2. The name of the corporation, which must not be same as, nor deceptively similar to the name of a pre-existing corporation.
    The name must include a word, phrase or abbreviation indicating that it is a corporation, to distinguish it from any individual or company of another nature.
    The name of the corporation may be expressed in any language.
  3. The general purpose or purposes for which the corporation is formed.
  4. The amount of the share capital stock and the number and par value of the shares into which it is divided.
    The amount of the share capital and the par value of the shares may be expressed in terms of the legal currency of Panama or the legal gold currency of any other country, or both.
    If there are to be shares of more than one class, the number of shares in each class and the designations, preferences, privileges and voting justifys and the restrictions or requirements of each class may be determined by a resolution adopted by a majority of the directors.
  5. The number of shares that each of the subscribers to the Articles of Incorporation agrees to take.
  6. The domicile of the corporation, which may be in the Republic of Panama or any other place, as well as the name and domicile of its resident agent in Panama, who must be an attorney or a law firm in Panama.
  7. The duration of the corporation, which may be perpetual.
  8. The full names and addresses of at least three directors.
  9. Any other lawful clauses to which the subscribers may have agreed.


Every corporation organized in accordance with this Law shall have, in addition to the other powers herein bestowed, the following:

  1. To sue and be sued in any court.
  2. To adopt and use a corporate seal and alter it at its convenience.
  3. To acquire, purchase, hold, use and transfer property and chattels of any kind and to make and accept pledges, mortgages, leases, liens and encumbrances of all kinds.
  4. To appoint officers and agents.
  5. To execute contracts of all kinds.
  6. To enact by-laws ("estatutos") not incongruent with any existing law or its Articles of Incorporation, for the management, regulation and administration of its affairs and properties, for the transfer of its shares of stock, for the calling of shareholders' or directors' meetings or for any other lawful purpose.
  7. To conduct its business and to exercise its powers in foreign countries.
  8. To dissolve itself in accordance with the law, whether voluntarily or for any other reason.
  9. To borrow money and incur debts in relation to or connection with its business or for any lawful purpose, to issue bonds, promissory notes, bills of exchange and other documents of obligation (which may or may not be converted into stock of the corporation) payable on a specified date or dates or upon the happening of a certain event, whether secured by mortgage, pledge or otherwise, or unsecured, for money borrowed or in payment for property purchased or acquired or for any other lawful purpose.
  10. To guarantee, acquire, purchase, hold, sell, assign, convey, mortgage, pledge or otherwise deal in or dispose of shares, bonds, or other obligations issued by other corporations or by any municipality, province, state or government.
  11. To do and perform anything and everything that may be necessary in carrying out the purposes enumerated in the Articles of Incorporation or any amendment thereto, or whatever becomes necessary or desirable for the protection and benefit of the corporation, and in general to carry on any other lawful business whether or not said business is set forth its Articles of Incorporation or in any amendment thereto.


Generally, the management of the affairs of a corporation is vested in a Board of Directors and few administrative functions are assigned to the shareholders; however, the shareholders constitute the supreme power of the corporation.

The main functions of the shareholders' meetings are as follows:

  1. To appoint the directors.
  2. To make amendments to the Articles of Incorporation.
  3. The sale, lease, exchange or disposal of capital assets.

The holding of shareholders' meetings on certain dates or at fixed times is not required by law; this is to be provided by the Articles of Incorporation. If not so provided therein, the shareholders' meetings may be held at any time and place, within or outside the Republic of Panama.


The management, administration and business of the corporation is vested in a Board of Directors, composed of at least three individuals of legal age, and subject to the provisions of the law and of the Articles of Incorporation, the Board of Directors has absolute control over the management of corporate affairs, including the adoption, amendment and repeal of by-laws.

In the absence of a provision to the contrary in the Articles of Incorporation, it is not necessary that the members of the Board of Directors be shareholders. Additionally, if expressly authorized by the Articles of Incorporation, directors may be represented at meetings of the Board of Directors' through proxies, who need not be directors and who must be appointed by public or private instrument, with or without the power to substitute.


Corporations shall have the power to create and issue one or more classes of shares of stock, with designations, preferences, privileges, voting powers, restrictions, qualifications and other justifys thereof as may be provided by the Articles of Incorporation.


Corporations must have a President, a Secretary and a Treasurer, who are elected by the Board of Directors.

In the absence of a provision to the contrary in the Articles of Incorporation or the By-laws, such officers may be replaced at any time by a resolution adopted by the majority of the members of the Board of Directors or stockholders.


Panamanian corporations must have a registered agent in the Republic of Panama.

In accordance with Panamanian law, the registered agent must be an attorney or a firm of attorneys.

The registered agent may be replaced by means of an amendment to the Articles of Incorporation.


When the corporation's operations are not performed in Panama, only a Minutes Register and a Stock Register are required, which may be kept in any part of the world.


Income tax in Panama is levied upon net income derived from operations within the territory of the Republic of Panama.

Profits and dividends arising from activities outside of Panama are not subject to taxation under Panamanian law.


A foreign corporation may have offices or agents and engage in business within Panama after having presented the following documents for inscription at the Public Registry :

1. Notarized deed protocolizing the Articles of Incorporation.

2. Copy of the last balance sheet, together with a statement as to the amount of capital to be engaged in business in Panama

3. A certificate stating that the corporation is incorporated and organized in accordance with the laws of its respective country. This certificate must be issued by the Panamanian Consul in said country, or, if there be no such representative, by the Consul of a friendly nation.

© Copyjustify 2009, OMALTD, S.A. Todos los Derechos Reservados