Panama Corporations

Two or more persons (called “subscribers”) of any nationality and with residence in any country may form a Panama Corporation by executing an Incorporation Charter (or Memorandum of Association).

Traveling to Panama or going before a Panamanian Consul abroad is not necessary to form a Panama corporation. Two individuals domiciled in Panama may act as the subscribers of the company on your behalf and they can afterwards assign their stock subscription rights to you as the first shareholder.

You can execute the Incorporation Charter in any language of Latin Characters.

If drafted in a language other than Spanish, a Spanish translation must be part of the Incorporation Charter.

Although other information may be included in the Incorporation Charter, the following information must be part of the Charter:

  1. The name of the corporation. It must be different from any other Panama Corporation and it must include the following abbreviations or words: “Inc.” or “Incorporated” or “Corp.” or “Corporation” or “S.A.” or “Sociedad Anonima”.
  2. The general or principal purpose or activities. A description of a general purpose does not preclude the corporation from pursuing other legal activities, unless expressly prohibited the Incorporation Charter.
  3. The authorized capital. The law does not provide for a minimum or maximum capital. The authorized capital and the par value of the shares can be in the currency of any country. The law also allows the use of non-par value shares.
  4. The law authorizes the use of different classes of shares. You must state in the Incorporation Charter the number and classes of shares and their priorities, privileges, voting rights, restrictions and other characteristics, or the Incorporation Charter must indicate that the characteristics of the shares will be set forth in a resolution of the stockholders or of the Board of Directors.
  5. The Incorporation Charter must provide whether the shares will consist of registered (the owner´s name appears on the stock certificate) or bearer stock. The Incorporation Charter may provide for the issuance of both types of shares. Also, once issued they may be converted from one class to the other. An authorized agent must hold in custody shares that are issued to bearer.
  6. Some jurisdictions require that a part of authorized capital be fully subscribed and paid, but this is not so in Panama. It is sufficient to state that the subscribers may subscribe at least one share each.  A Panama corporation may have a single shareholder.
  7. The corporations domicile. It is sufficient to indicate any city in the world as the place where the corporation will have its domicile and its domicile does not have to be the place where the corporation carries out its business activities.
  8. All corporations must have a Registered Agent in Panama, whose name and address must appear in the Incorporation Charter. This Registered Agent must be a licensed attorney or law firm in Panama.
  9. The names and physical addresses of the first Directors of the corporation must be included. The corporation must have at least three Directors that do not need to be Panamanian or residents. Directors must all be at least 18 years old.
  10. A Panamanian corporation must have a President, a Treasurer and a Secretary. Other officers such as Vice-Presidents, Chief Executive Officers, Chief Financial Officers, and the like may also be appointed.  An Officer may also hold a position as Director of the corporation and one person may hold more than one position as officer. All officers must be at least 18 years old.
  11. The duration of the corporation. The corporation can be of definite or indefinite duration. Most commonly, Panama corporations are of indefinite or perpetual duration since the shareholders can dissolve it with anticipation.

The Incorporation Charter may provide for other provisions, such as share transfer restrictions, preemptive rights in the event of the issuance of new shares, powers of the officers to bind the corporation, powers of attorney and others

Unless the Incorporation Charter provides otherwise, neither the Directors nor the Officers of a corporation need to be stockholders. The shareholders, directors and officers may be of any nationality and do not need to be residents of Panama.

The law allows for meetings of Shareholders and Directors to take place in any country.

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