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La Firma Áreas de Prácticas Nuestro Personal Panamá Contáctenos
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Panama corporation law was enacted by Law 32 of 26 February 1927 on Corporations, complemented by Decree Law No.5 of 2 July 1997. This law is a version of the corporation law of the state of Delaware, United States.  Since, its enactment has been widely used by the international and financial community due to the multiple advantages and benefits that these corporations can offer in the offshore operations. However a Panamanian corporation is used mainly to operate and carry out commercial and industrial activities, business structure, business transactions, acquire property and protect assets.  Due to the non-existence taxes on overseas operations.

Panama Offshore Corporation Advantages

  • Taxation in the Republic of Panama is based in the Territorial source principle. Therefore, the income obtained from operations abroad the Panama Territory are not taxable under our law.

  • Offshore companies are not required to file any report with the Panamanian government regarding to any offshore activity.

  • The only tax applicable to offshore corporations is the annual franchise tax.

  • Panama is a thriving and growing international financial center with no currency restrictions or exchange control. The legal currency is the U.S. Dollar

  • Corporation conducting business abroad does not require a Commercial License for offshore activities.

  • No paid capital is required.

  • It is not necessary for the interested parties to be present for the purpose of organizing the corporation. For this purpose, corporations are formed through nominee incorporators in Panama, who will execute the basic instrument for the incorporation which is the articles of incorporation.

  • The directors / Officers and shareholders may be from any nationality and residents of any country.

  • The meeting of directors and shareholders of the corporation can be held in Panama or any other country, by phone or by electronic means.

  • The Directors / Officers of the corporation do not need to the shareholders.

  • shares certificates may be issue to the bearer or nominative and may be issue with or without par value.

  •  The accounting books of the corporation can be kept within Panama or any other country.

  •  Corporations can own any type of assets.

  •  Incorporation time frame is approximately 48hrs.

Panama Offshore Corporation Characteristics


There is no minimum capital to be paid or a time frame within the authorized capital of the corporation has to be paid.

In practice the minimum authorized is US$10,000.00 divided in common shares issued to the bearer / or nominative registered capital with par value; another option is to register a capital of 500 hundred common share, issue to the bearer without par value. In both of these cases the corporation will pay the minimum registration tax.


The shares are always issue in private documents and the identity of the shareholder is not registered.

The corporation has the power to issue one or more classes of shares with preferences and voting powers.  According to our corporation law, the shares can be issue to the bearer or nominative.


The shareholders have the power to make all the decisions of all the activities that the corporation is / will be involved. Therefore, the shareholders approval is needed for amendments of the articles of the corporations, sales, lease, mergers and acquisitions, disposal of assets, dissolution of the corporation.

In other words, the shareholders constitute the supreme power of the corporation.

Board of Directors

According to our law, Panama corporations require a minimum of three (3) officers / directors. This directors / officers may be from any nationality and residents of any country.

The board of directors can also held meetings and they can be represented in the meeting through proxy holders that do not need to be part of the board of directors and must be appointed by private or public instruments with or without powers to substitute.


The meetings of shareholders or board of directors can be held within the Republic of Panama or any other jurisdiction. These meeting can also be held by telephone, fax or any other electronic means.

Registered Agent: According to our corporation law, every corporation must have a registered agent, which is normally an attorney from Panama or a law firm.

Books: When the company operates abroad or does not operate within Panama. Our law requires that the corporation must hold a Shares Register Book and a Minutes Book

Re-domiciliation: Re-domiciliation to Panama of foreign corporations is allowed, regardless of provisions in this respect in the country of origin.

Re-domiciliation of Panamanian corporations to other jurisdictions accepting such re-domiciliation is also allowed, if it is so stipulated in the articles of incorporation.

Dissolution: A formal voluntary dissolution of the company is allowed at any time. It requires the approval of the shareholders at a meeting duly convened for such purpose.

Limited Liability Partnerhsip  -  LLC  PANAMA

There is a business entity under Panama law which could be referred to in English as a Limited Liability Partnership (“Sociedad de Responsabilidad Limitada”).  This entity is governed by Law No. 24 of 1966 (the “Limited Liability Partnership Law”).


Limited liability partnerships are required to have at least 2 partnenrs and can have not more than 20. All the partners or their attorneys-in-fact, as the case may be are required to  execute the partnership agreement.

Regarding the manner of execution of the partnership agreement, the law requires that this be done before a Notary Public.  In essence, this means either a Notary Public in Panama or a Panama Consul abroad, who has notarial functions.  I would assume that it would be preferred that the partners would prefer not to come to Panama for that purpose.  Also, given the technicalities, we would not recommend doing this before a Consul.  It would therefore seem to us more practical if the partners could grant powers of attorney in favour of persons from this office, whereupon we would proceed with the execution of the partnership agreement and the necessary filings.

Legal status

Limited liability partnerships are juridical persons different from its partners, which come into existence upon the recordation of their Partnership Agreement in the Panama Public Registryu and a publication of a notice in a local newspaper.

The Limited Liability Partnership Law is rather detailed and somewhat complex, but for purposes of the present discussion, perhaps the most salient characteristics of a Limited Liability Partnership would be as follows:



(a) Partners
The Limited Liability Partnership Law provides that the maximum number of partners shall be twenty, and seems to suggest, although this is not altogether clear, that the partners must be natural persons.  This requirement was changed by Decree Law No. 5 of 1997 and therefore all or some of the partners may be corporate bodies.

In our opinion, the use of special purpose corporations to act as partners would protect the assets of the parent company from creditors of the partnership.

The names of the partners and their partnership interest (quotas) should be stated in the Partnership Agreement as registered at the Public Registry, and any transfer of interest should also be registered at the Public Registry.  The identity of the partners is therefore a matter of public knowledge.

(b) Capital

The Limited Liability Partnership Law provides that the capital of the partnership shall be expressed in Balboas, the Panama currency, (its value mirrors that of the US$) and shall not be less than the equivalent of US$2,000 nor greater than the equivalent of US$500,000, represented in a number of quotas of the value of the equivalent of US$100 or multiples thereof.  At the time of the constitution of the Limited Liability Partnership, at least 50% should be paid in.

Which may be stated in the Partenrship Agreement, or to the total net assets of the entity.  The position which we have taken in the past is the former, that is to say, that this provision refers to the maximum stated capital in the Partenrship Agreement, regardless of whether the net assets are greater, and that therefore there may be a capital surplus in excess of US$500,000.

The law further provides that when it is deemed convenient that the number of partners be greater than twenty (20) or that the capital be greater that US$500,000, the sociedad de responsabilidad limitada  should be converted into a corporation.

(c) Administration

Partners Meetings
Where the number of partners is greater than five, the partnership should hold partners meetings at least once a year.  Otherwise, partners may be consulted by cable or registered letter or may adopt their decisions in writing in lieu of a meeting.

The powers of the partners are as follows:

(i) To amend the Partenrship Agreement.
(ii) To approve the accounts, the report of the administrators and the distribution of profits as proposed by the administrators.
(iii) To resolve on actions against the administrators and other partners for damages caused to the partnership.
(iv) The appointment and removal of administrators.
(v) The appointment of advisors and special attorneys-in-fact.
(vi) To decide on the dissolution, merger and transformation of the partnership.


The partnership shall be managed and represented by one or more administrators, who may but need not be partners, who may be natural or juridical persons.

Where more than one, the administrators have the power to act severally.  However, where the Partenrship Agreement requires that they should act jointly, they should so act, except where a delay could prejudice the partnership.

The administrators require special authorization from the partners to carry out acts beyond the normal course of business, to transfer assets, and to encumber assets to secure debts of the partnership.

(d) Time

A Limited Liability Partnership could be registered in about fifteen days from the time that the terms of the Partenrship Agreement are agreed upon and and the appropirate Notarial Instrument  has been executed

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